Aug 13, 2014: 12:52 PM CST
I’m seeing increased chatter about Coal stocks and ETF KOL regarding a potential breakout and larger reversal.
Let’s take a quick look at the Weekly and Daily Chart to highlight the key levels to watch, potential targets, and try to answer the question “Is this THE breakout?”
First, I’m showing a longer-term weekly chart of the coal ETF symbol KOL.
We can see a persistent and relentless DOWNTREND beginning in 2011 at the $50.00 per share high and potentially ending with a larger Double Bottom price pattern at the $17.00 per share level (2013 and early 2014).
Aggressive traders enjoy calling market bottoms while more conservative traders need a little more ‘proof’ or evidence of a potential reversal.
Notice what’s happening now – a breakout above the falling 50 week EMA which is something that has not happened throughout the entire downtrend. Continue Reading…
Aug 13, 2014: 12:21 PM CST
We started the day with an up-gap and have seen a Trend Day ever since.
Let’s update our S&P 500 intraday chart, highlight sector breadth, and note the strong trending stocks of the day.
We’ll start with the intraday update of the S&P 500:
We’re monitoring if we’re seeing a slight repeat of August 11th where another upside gap resulted in a trend day higher.
However, that tren dday failed into a “Rounded Reversal” and we’ll focus our attention on the 1,945 level and the higher frame resistance into 1,948 as I mentioned in this morning’s update.
Do note the divergences which you can see clearer on the 5-min chart above.
Aug 13, 2014: 11:13 AM CST
Let’s take a quick look at our ongoing intraday Fibonacci Grid along with key Market Internals to plan potential price pathways going forward.
Here’s our intraday grid at the moment (note the key level):
We’ll focus like a hawk on the 1,950 index level.
Note the very slight Market Internal divergence into the 50% Fibonacci Retracement level officially into 1,948.
We’ll be cautious under this level and otherwise pro-trend reversal (bullish) above 1,950 to target 1,960 then beyond that.
A trigger-break under the 1,939/1,940 level could open an ‘alternate’ sell pathway toward 1,930.
For educational purposes, do note the lengthy positive Market Internal divergence that undercut the 1,910 support level – lengthy divergences often signal likely market reversals yet to come.
Continue focusing on the 1,948/1,950 level as today’s key intraday pivot. Continue Reading…
Aug 12, 2014: 2:28 PM CST
What’s a “gappy” stock and once we figure that out, which stocks are the ten most “gappy” stocks currently in the S&P 500 index?
Let’s get to work and uncover these mysteries!
First, on with the list:
I’m defining a “gappy” stock as one with a greater tendency to gap, or more specifically, a large 21 day average opening gap.
In other words, which stocks have been gapping the most, or have the largest 21 day average opening gap?
From the chart above, it should be no surprise that the ten “gappiest” stocks are also some of the highest priced stocks (for example, Priceline currently trades near $1,300 per share).
Still, the average 21 day gap (change in yesterday’s close from today’s open) is just over $5.00 for Priceline and near $5.00 for Chipotle Mexican Grill (CMG). Continue Reading…
Aug 12, 2014: 9:32 AM CST
Let’s take a quick moment to update our “Market Structure” Color Charts for the Big Three US Equity Indexes.
We’ll start with the S&P 500:
When we view “Market Structure,” we’re simply studying the sequence of price highs and price lows as it creates or builds a trend.
Uptrends contain a “higher high/higher low” price structure while downtrends create the opposite.
We can also compare volatility in terms of sideways consolidation phases or trending phases (along with the angle of upward movement).
For now, “Structure” is bound between rising parallel (or even compressing) trendlines as price continues its upward pathway fueled by stimulus.
The key level to watch now – as has been the case since late 2012 – is the test of the lower rising trendline intersecting 1,900. Continue Reading…