Aug 11, 2015: 2:54 PM CST
The market continues to trade within a well-defined trading range and the last two sessions saw volatility but no real progressive movement.
What levels are we focusing on now? Let’s see!
First, be sure to view Monday’s “Thrilling, Non-Stop, Exciting Trading Range of 2015” for context.
The main idea was price had a strong chance to bounce strongly up off the 2,070 pivot as it did.
The target – fully achieved – was the 2,100 midpoint which set the stage for today’s planning.
The initial gap-down set in motion ANOTHER trend day and movement down toward the 2,075 level again.
It’s from this spot – highlighted -that we’re seeing another intraday reversal off support.
Follow along with members for more precise daily planning, analysis, and education.
Aug 11, 2015: 8:53 AM CST
Sugar’s slide continues in one of the most persistent and stable trend structures.
Let’s take a look at the persistent trend as sugar prices sour to sticky new lows, trapping bulls along the way.
Here’s a “Pure Trend Structure” Viewpoint of Sugar Prices (@SB):
First and foremost, the entirety of Technical Analysis (visual charting price) is built on the concept that trends, once established, have greater odds of continuing than of reversing.
Like an apt pupil, sugar prices exemplify this concept with perfection as a daily downtrend persists.
Study the “Trend Continuity” process and how to trade it with the “Perfect Pullback” Lesson Bundle.
Trends continue with interruptions – corrections – which allows to enter into the trend with low risk.
Note the small blue “flags” or retracements against the yellow persistent trend in price.
Each opportunity – especially as rice touched the upper falling trendline – allowed a low-risk trade set-up to join into the persistent trend.
What about reversal trades or trying to pinpoint a trend reversal?
That’s a wonderful and exciting way to lose a lot of money quickly!
Why make trading harder than it needs to be? Look for trends and then shift your perspective to expect the trend to continue until clear reversal signals – like a break beyond a key falling trendline – develop.
Until then you’re only hurting yourself if you try to trade against trends like these. Continue Reading…
Aug 10, 2015: 10:53 AM CST
How are you doing within the Great Trading Range of 2015?
One of the first steps in the trading process is to analyze the current market condition and then assess the odds of that condition continuing… or changing into something different (ending).
Let’s start the week with an update of the current Range and why it’s leading to successful trading this morning:
First, it’s a core market principle of price behavior that markets alternate (change) between periods of Range Contraction (like this) and Range Expansion (big trend movement in either direction).
It’s an undeniable fact that 2015 – especially from March to present – is a period of “Range Contraction” or consolidation in what I like to call “The Great Trading Range of 2015… So Far.”
While most traders prefer the trending environments, we must adapt to the current condition of price action whether we like it or not.
The reality is that a key support level – a Buy Zone – developed into 2,070 (with small exceptions) just as a key resistance ceiling – a Sell-Short Level – exists near 2,130.
Buyers and sellers are balanced – price is at equilibrium – between these levels.
In fact, we can reference the spot just under 2,100 as the Midpoint or “Magnet” of the Range.
Note how price has been pulled back toward – then beyond – 2,100 throughout the entire range. Continue Reading…
Aug 6, 2015: 12:49 PM CST
Not all is well with the Dow Jones Industrial Average.
While some stocks are getting attention as they continue bullishly to new all-time highs, other stocks are quietly breaking to new 52-week lows during new downtrends.
Let’s note six of these stocks and what opportunities may be available in these downtrenders.
First, take a moment to read “What Two Breadth Charts are Saying about the Strength of the Current S&P 500.”
We can see that Breadth – the number of stocks at new highs minus those at new lows – is deteriorating.
The Dow Jones itself (30 stocks) is showing relative weakness to the broader S&P 500 Index.
Just take a look at these six names – scanned from FinViz.com – with stocks breaking to new lows.
Two oil stocks – Chevron (CVX) and Exxon-Mobil (XOM) make sense logically, given the ongoing breakdown and downtrend extending in oil.
However, the other names span diverse sectors beyond energy.
Other downtrending and weak stocks include American Express (AXP, Caterpillar (CAT), Dupont (DD), and Proctor and Gamble (PG).
Here’s a different – slightly longer trend – view of these same names: Continue Reading…
Aug 6, 2015: 12:11 PM CST
The 2015 Trading Range continues for the market as prices fell once again to challenge key support.
Let’s update our “Range Forecast” Chart of the S&P 500 key levels and plan accordingly.
January 2015 started with a wide range (1,990 to 2,060) ahead of a rally straight up to the 2,120 level.
From there, buyers and sellers have aggressively battled each other with neither side gaining ground.
With the exception of January, the S&P 500 has traded within a sideways range (Rectangle) for 2015.
With the exception of two “spikes” out of the Rectangle (March and June), and three small “Bull Traps” above 2,120, price has bounced between the 2,075 and 2,120 levels.
The 2,100 Level is the “Magnet” or Midpoint of the pattern which should be seen as a Balance Price.
In other words, each time price rallies above or beneath this level, it is “snapped back” quickly.
For short-term traders, we should continue focusing our attention on these three levels: Continue Reading…