New 47 Page eBook Download on Spotting Trading Opportunities

Sep 9, 2009: 4:59 PM CST

The folks at Club Elliott Wave International (Robert Prechter’s site) released what I think is a very generous limited time free download of a 47-page e-book simply entitled “How to Spot Trading Opportunities” that I wanted to share with you – it’s not just for those interested in Elliott Wave but for much broader traders.

This is from a larger volume written by long-time analyst Jeffrey Kennedy.  In introducing the e-book, Jeffrey writes:

“What if you could look at a chart and instead of seeing what happened, you could see the potential trading opportunities that could happen.

Elliott Wave International (EWI), the world’s largest market forecasting firm, has just released a free eBook to teach you exactly that.

The How to Spot Trading Opportunities eBook features 47-pages of easy-to-understand trading techniques that help you identify high-confidence trade setups. Senior EWI Analyst Jeffrey Kennedy will show you how some of the simplest rules and guidelines have some of the most powerful applications for trading.

Created from the $129 two-volume set of the same name, this valuable eBook is offered free until September 23, 2009.”

My special thanks to Jeffrey and the Team at Club EWI for making this available to us and allowing me as an affiliate to share this with you.

Corey Rosenbloom, CMT

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Weekly View of Apple AAPL Shows Volume Disconfirm

Sep 9, 2009: 2:19 PM CST

A reader asked me to take a look at Apple (AAPL), and I had to highlight the weekly timeframe volume divergence that has been developing off the price lows all through the current strong rally.  Let’s take a quick look at Apple’s (AAPL) weekly and daily stock charts.

The main thing that leaps off the chart at me is the major volume non-confirmation or divergence that has formed since the October 2008 lows (volume spike).  Technically, the volume non-confirmation did not begin until April, though look closely through July and August as price rose sharply… volume trailed off slightly each successive week.

Volume divergences (when price rises on lower volume) are non-confirmations, but they don’t cause us to run for the exits or jump in short – it’s just like a yellow light that signals caution instead of imminent danger… but it’s something Apple (AAPL) bulls should at least be aware.

Otherwise, there is no major level of resistance above save for the prior price highs at the $180 and $190 level – price is above the 61.8% Fibonacci zone which often serves as some sort of resistance.

Otherwise, look to weekly EMAs at $150 and $140 for any potential test of a support zone.

Apple (AAPL) Daily:

The daily chart steps us into the recent price action, which shows that a negative momentum divergence has formed along with the negative volume divergence as described.

What’s concerning me (from the bullish camp) on this chart is the volume spike that’s formed on the current bar (with one hour to go in today’s trading – that bar isn’t yet complete).  Price is down 1.33% on volume not seen since mid-July – that’s not bullish.

For short-term scalps, I’d look to see if the 20 day EMA held support at $166, and if not, then look to scalp for a possible play to test $160.

A failure beneath $160 could set-up a challenge of the $150 level as mentioned on the weekly chart.

Barring any downside momentum/movement here, we would expect the 20 EMA to hold (support) price as it has done in the past… but be on alert that the strength of the 20 to hold price could be weakening.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

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Midday Check of Market Internals Sep 9

Sep 9, 2009: 10:58 AM CST

As we head into the lunch hour on September 9th with a strong market rally underway, let’s take a look at the major market internals as viewed from custom screens in TradeStation:

Let me decode the chart for you -

In the upper panel, we have the TRIN (Trader’s Index) which reflects whether volume is ‘flowing’ into advancing or declining issues.   A TRIN beneath 1.0 is ‘bullish’ and a TRIN above 1.0 is ‘bearish.’

Beneath that, we have the actual Advance/Decline chart, in which Green reflects the $ADV or number of advancing stocks on the NYSE, and the Red line reflects the $DECL or declining stocks on the NYSE.

The $ADD chart is simply the “Advance minus Decline Differential” or the subtracted value of these two… which in this case shows roughly 1,450 more stocks are positive on the day than negative (2,200 stocks are up vs 750 that are down as of noon, EST).

The next chart shows the Up-Volume (green) as compared to the Down-Volume (red).

Finally, we’re seeing the top Sector Performance (AMEX Sector SPDRs) to see which sectors are outperforming or under-performing the others.

The picture across the board is bullish.

The picture of bullishness is what we see above:

A Falling TRIN;
many more advancers relative to decliners;
a differential above 1,000;
almost a 4 to 1 relationship of greater “up” volume as compared to “down” volume;
and sector strength coming from the Financials, Industrials, Consumer Discretionary (retail), and Energy.

For reference, I overlay the TICK on my price charts, so I’m comparing relative TICK values both to each other and prior/current price swing highs and lows.

Looking under the hood can sometimes give us clues that help us determine the strength (or weakness) of the pure price movement we’re seeing before us.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

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Fresh 2009 Highs for India NIFTY into Resistance

Sep 8, 2009: 6:14 PM CST

India’s “Nifty 50″ Stock Market Index (symbol $CNXN in StockCharts.com) broke to a new 2009 high today, but before we get too bullish, let’s take a look at what bulls need to overcome to keep the rally going – hint… Fibonacci and a Rising Wedge.

Nifty Weekly Chart:

The weekly chart shows a very powerful uptrend, taking us from the 2,250 lows to the recent 4,800 index highs – an impressive doubling in price in just under a year’s time.

To keep the bullish party going, buyers in the index need to overcome potential overhead resistance in the form of the 61.8% Fibonacci level as drawn from the 2008 highs to the lows – the rally up has been a retracement of that steep price drop.

There’s also the potential break (up from here to dis-confirm the pattern or down beneath 4,400 to confirm it) of the Bearish Rising Wedge as seen best from the Daily chart… along with the negative momentum divergence which is showing up on both the weekly and daily frames.

Nifty Daily Chart:

The daily chart gives us a better perspective of the ‘bumpy’ ride investors have endured since the June 2009 highs… which almost resembles a “Three Push” negative momentum divergence (or price pattern).

The wedge formation and negative divergences into resistance are clearer from this frame.

If bulls can clear 4,800 and then 5,000, it would be a major victory against the backdrop of a Fibonacci resistance level, bearish rising wedge, and triple-swing negative momentum divergence pattern all as labeled above.

If history is any guide, it will teach that 2009 has been the year when bulls have trampled over any bearish resistance or divergences on technical (price) charts.  Will it happen again?  Just a few more days (or next week) and we’ll know for sure!

Corey Rosenbloom, CMT
Afraid to Trade.com

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Hewison Video Update and Projection in Gold

Sep 8, 2009: 3:26 PM CST

Adam Hewison released an update video last week on Gold as prices broke out of the triangle as I have mentioned here on the blog on the same day.  Sometimes it helps to have a video overview and a different perspective on the patterns, and I always enjoy Adam’s perspective.

His new video is entitled, “Is THIS the Move We’ve Been Waiting for?” and he takes a long-term, intermediate term, and short-term update on Gold prices, including a price projection using a possible inverse head and shoulders pattern (similar in target to the larger triangle projection mentioned here).

Adam takes a look at “Energy Fields” in gold:

Adam’s price projection and tracing of the Inverted Head and Shoulders Pattern:

I took both screencaptures from the video, and both images open up the video page for you to see.

In introducing the video, Hewison writes, “In my new video, I show you what I think is going to happen to this market in the near term and the long term. I also discuss energy fields as they pertain to gold, and where our Trade Triangles are positioned in the yellow metal.”

As Corey’s caveat, I’m waiting for a clean break above $1,000 or even $1,030 to get really excited and am watching for any ‘fake-outs’ or price weakness at these levels.  Sometimes it pays to be cautious, but certainly some strong buying pushed gold’s levels higher, which has continued until today, though I must say the September 8th gap up and fill candle (at least on GLD) gives me temporary pause.

Let’s keep our eyes on this market as closely as we can for signs of continued strength… or any sort of weakness (like today) creeping up on us.

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