Continuing the thought from my last post asking whether Fed Rate Cuts are Actually Good for the Market, I thought I’d compare the 2 Year Treasury Note, 30 Year Treasury Bond, and the S&P 500 and overlay the recent Fed Rate Cuts on the comparison chart. Let’s see what happened: The chart begins in June,…
Is it really as simple as “When the Federal Reserve cuts rates, it’s great for the market” or “When the Fed raises rates, it’s bad for the stock market”? Michael Panzer of Financial Armageddon recently asked this question, as well as provided an excellent graph detailing stock market returns and Federal Funds rate at his…
United Technologies (UTX), component of the Dow Jones Index, has recently ended a multi-year uptrend through some highly volatile downside price action. Let’s look at the history of this stock’s chart pattern through the last few years: Monthly Chart: While the monthly chart shows a magnificent uptrend since 1997, the recent action represents a mere…
Let’s look at how the weekly charts of the S&P 500, US Dollar Index, Commodity Index, and 30 Year Bond Index have set-up: First, the US S&P 500: The S&P 500 Index is currently trapped between the key moving averages, but is beneath the 20 and 50 period average. I have added arrows to highlight…
Friday in the stock market gave us an almost ideal example of the classic rolling momentum divergence and balanced shift in demand from sellers to buyers. Let’s view the pattern: This is the DIA 5-minute chart. Notice the higher lows that continuously form in the momentum oscillator as price makes new intraday lows. Eventually, the…
Adam Hewison of INO.com recently published an educational and informational video entitled Fibonacci Retracement Rule on trading price pullbacks with low risk through simple use of the Fibonacci Retracement tool. In the brief video, he shares his trading experiences on how he uses Fibonacci techniques and how he sets up trades in trends with reduced…
The S&P 500 and Dow Jones Indexes are forming a small triangle consolidation pattern, meaning prices are consolidating to a possible apex which may break soon. Let’s check it out (daily): Onto the NASDAQ: The red trend-lines represent the relatively symmetrical triangle on the daily chart (and momentum beneath). Most triangles break 75% of the…
Surprisingly, the market punished traders with a trend day down following yesterday’s trend day up. Usually, we expect some sort of consolidation after a major trend day, rather than a trend day in the opposite direction, which confuses swing traders to no end. Intraday traders often fare better, because many swing trading systems trigger buy…
Research in Motion (RIMM), famous for the Blackberry and volatile stock prices, has shown investors more than a roller-coaster ride, and also has shown more volatility than most investors can stomach. Let’s look at the harried daily chart: I have tried to highlight just some of the larger gaps (purple ovals) in the stock. Sometimes…
The intraday action in the major US indexes was a gift in the form of a ‘trend day up’ structure, which occurs rarely, but offers us significant opportunities for profits. Let’s peek: Notice how the market (DIA ETF – 5-minute chart) gapped up, representing an initial momentum imbalance. A gap can serve as the first…