Jan 20, 2016: 12:59 PM CST
As we focus on the US Stock Market, let’s pull the perspective back.
Let’s focus for a moment on three intraday charts – and powerfully persistent trends – that underscore how powerful the price movements of 2016 has been.
Combine these three charts together in your mind:
The @ES (S&P 500) and @CL (Crude Oil) Markets have been in literal collapse.
No meaningful bounce/rally has occurred and certainly there’s been no reversal against these powerful trends.
The S&P 500 is down over 10% in over two weeks while Crude Oil has collapsed further, falling roughly 30%.
It’s a large-scale “Risk-Off” Money Flow movement that has been relentless.
There’s one more chart that underscores the damage and money flow: Continue Reading…
Jan 20, 2016: 12:43 PM CST
Recently I’ve been drawing your attention to the Weekly Chart pivot levels and “Arc Trendline Distribution” structure and today we’re seeing “inconceivable” downside targets being hit ahead of schedule.
Let’s update our Weekly Chart perspective for the S&P 500 and Dow Jones:
Take a moment first to review our previous planning posts:
January 19: “Daily Pivot Planning Levels”
January 15: “Weekly Planning (Distribution Arc)”
January 7: “Distribution Arc Trendlines and Updated Targets”
The January 7th update particularly was correct well in advance of highlighting the reversal pattern and downside targets (achieved this week).
The S&P 500 – having broken the 1,900 and 1,870 low – has collapsed as would be expected “down toward” the 1,800 new weekly target level.
The 1,800 pivot is the confluence of the late 2014 spike reversal low and the rising 200 week SMA.
To be frank, today’s price action officially and objectively REVERSES the Weekly (Intermediate) Trend of the stock market from Sideways to Down.
The Daily Chart or Short-Term Trend is without any doubt in a prevailing and ongoing downtrend.
Let’s turn to the Weekly Chart Update of the Dow Jones: Continue Reading…
Jan 19, 2016: 11:59 AM CST
“Stocks which are weak tend to get weaker.” Twitter (TWTR) continues to demonstrate the power of this simple statement for traders.
It’s extremely tempting to find a weak stock and try to trade a reversal, but it’s more profitable to find a trend and ride it for all it is worth.
Let’s chart the Weekly and Daily path of Twitter (TWTR) and note what opportunities may exist for us now.
Here’s the bigger picture Weekly Chart:
The weekly chart serves as a reminder not just that this popular stock (note the volume) is volatile, but that it remains in a primary downtrend.
After a successful few months after the initial IPO, shares peaked above $65.00 and have never seen this level since.
Two multi-month deceptive counter-trend bullish rallies lured bulls to their doom when price broke rising trendlines to trigger new sell-short (breakdown) signals.
The last straw for the (then) rangebound stock was the breakdown in July 2015 under the $35.00 per share pivot which set the stage for the current relentless selling pressure we see today.
One more small retracement to the falling 20 week EMA (green into $30) was the most recent larger-picture sell-short signal ahead of the current swing to today’s fresh new price lows.
With this larger downtrend in mind, focus on the Daily Chart for a moment: Continue Reading…
Jan 19, 2016: 11:44 AM CST
We’re seeing at least a short-term bounce develop off key planning levels for US Stocks.
Let’s pinpoint these levels and craft a trading plan for the bounce or collapse from the new “Make or Breakdown” Pivot Points.
First, take a look at last week’s “Bigger Picture Weekly Chart Price Pivot Levels” to accompany today’s post.
We’ll just focus on the key levels and the trading plan on the departure (swing) from these pivots.
For the S&P 500, it’s the 1,870 level which is the August and September 2015 intervention lows.
At least a third bounce is expected to develop from the 1,880 level (which we may be seeing this morning).
Look to the Weekly Chart Post for downside target levels if the Alternate Thesis triggers and we do not see at least a short-term rally off support (it could forecast a market collapse). Continue Reading…
Jan 15, 2016: 3:44 PM CST