Jun 19, 2015: 2:05 PM CST
After two solid up-sessions, price pulled back in a retracement from resistance today.
What’s going on now and what levels are important now? Let’s see:
Price “Short-Squeezed” its way up to the 2,125 target yesterday and is now retracing down away from this level on negative divergences.
At the moment, we’re focusing our attention on the 2,110 pivot where the market trades currently.
This will be our intraday support-bounce (inflection) target.
Look to play a possible bullish rally up off this level… or alternate bearish continuation of the retracement.
Jun 18, 2015: 1:57 PM CST
Post-Fed Day! Buyers were happy with the Federal Reserve’s statement and thus boosted the market straight up, achieving targets along the way.
The uptrend continues and bullish money flow is once again the driver of the market (in a short-squeeze).
What levels are important now above 2,100? Let’s see them!
Logically speaking, 2,100 is our simple “Key Pivot” reference level and we’ll use it in our short-term planning.
Today – like Tuesday – is developing a strong Trend Day (see our new “Trend Trader’s Perfect Pullback” Lesson Bundle) as price is strongly moving “up away from” 2,100 as expected.
We’re seeing a strong impulsive breakout from the smaller triangle pattern mentioned yesterday.
With price breaking above the 2,115 target and stretching toward 2,125, the pathway is open to trade through to all-time highs (which is exactly what the NASDAQ index did this morning).
Jun 18, 2015: 12:16 PM CST
We’re seeing a number of stocks build similar patterns but I wanted to highlight Harley Davidson as a great example of a stock building a base ahead of a rally on positive divergences.
Let’s note the example and then plan possible targets now that buyers have revved up this stock from support.
Here’s the Weekly Chart which sets the stage for this week’s bullish reversal:
One of my favorite “Two-Step” Trade Setups is the
“Higher Timeframe Support with Lower Timeframe Divergence”
Mainly, we’re focusing attention on a higher timeframe key pivot point – in this case the $53.00 per share level which was a weekly pivot as highlighted and the rising 200 week Simple Moving Average.
HOG formed a couple small reversal-style candles into this level which added to the inflection point.
Shares have traded in an “Arc Trendline” distribution pattern since 2013 – we’re now trading up into the target of the falling ‘arc’ trendline and weekly moving averages into the $60.00 per share level.
For now, focus your attention (for this example) on the support pivot at $53.00 per share.
Now, let’s turn to the Daily Chart and see what momentum suggested about this pivot support line: Continue Reading…
Jun 18, 2015: 11:45 AM CST
You certainly don’t see patterns like this every day!
Lesser-known stock DS Health Care (DSKX) just jumped to the top of one of my stock scan lists and I wanted to highlight the sweeping “Parabolic Arc” which is one of my favorite broader price patterns.
Here’s the “Pure Arc” – we’ll delve into specifics on the second chart:
For more background on the “Parabolic Arc” Pattern, see the reference post list at the bottom of this post.
An “Arc Trendline” or “Parabolic Arc” pattern is fascinating in that it highlights an exponential price growth in a stock which allows traders to reap instant profits at the heightened risk of a reversal (which is also tradable when price breaks through the vertical trendline).
This low-priced stock formed an arc down from $2.50 in 2014 to reverse up with an “arc reversal” into early 2015.
From there, buyers catapulted the stock higher in an ever-steepening arc pattern that takes us straight up toward the current $5.00 level.
Bulls enjoy the pattern because they can play retracement or breakout trades aggressively into the rapidly moving uptrend.
However, don’t assume price will continue moving vertical forever – that’s where bears come in.
Bears also like this pattern because once price breaks through the rising vertical (lower) trendline, a steep reversal often occurs where price falls rapidly after such a parabolic rise.
Either way, the pattern captures our attention. Continue Reading…
Jun 18, 2015: 10:58 AM CST
Yesterday’s Fed Announcement that interest rates will likely remain unchanged through most – if not all – of 2015 sent markets moving in expected directions.
A “Risk On” environment altered the intermarket landscape as was logical from the news.
Let’s chart the quad-market grid and note these knee-jerk reactions:
With the Fed remaining on hold, extremely accommodate (in terms of monetary policy), and NOT raising interest rates any time soon, markets enjoyed a wave of rapid “Risk-On” Money Flow.
Stocks burst higher as did Gold and Oil.
The US Dollar was the sacrificial market that boosted these bullish commodity and stock plays.
- The @ES Futures so far boosted 30 points higher from 2,080 to 2,115;
- Gold Futures reversed up off support at $1,175 to shatter resistance into the current $1,200 target
- Oil – after a volatile session – spiked up away from $59.00 toward the current $61.00
- The Dollar finally broke support at $95.00 to collapse under $94 within a few hours.
Speaking of hours, here’s a slightly broader perspective of the trend and recent reaction: Continue Reading…