S&P update

The S&P 500 (ETF Proxy – AMEX:SPY) bounced right at daily 50 SMA as forecast.   The radical spike you see is the result of a “fat fingers” buy for some 200 million which fired right at the close and caused chaos.  I’m happy to be neutral for this market until there is more clarity in the price action.SPY 12-19

 

 

 

 

 

 

 

My entry on the short side in Home Depot  (NYSE:HD) was caught up in the overall market whipsaws, and quickly reached up to stop me out for a loss as price broke to a new high.

HD 12-19

Chevron  (NYSE:CVX) stopped out the remainders as it took out the $107.50 trail stop.  This outsized gain nicely offsets any losses from the HD stop-out, and reminds us that no one trade can make our break us…instead they are all just tiny pieces of a much bigger puzzle.

 

 

CVX 12-19

 

My “hedge trade” in Cisco Systems (NASDAQ:CSCO)  performed in a text book manner this week, and closed out near the highs.  I would take some profits into the $28 area, and will be looking for a place to trail stops to protect the open profits that remain.

 

CSCO 12-19

So as we move into the last days of the holiday season, I’m quite happy by the trades taken in this challenging month, and wish everybody happy Hanukkah and a very happy Christmas!

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The FTSE 100 is so deeply oversold the only viable trade would be to the upside

With the FTSE 100 trading below the 6,250 points at the end of the previous week it seems that we are in a whole new territory now. The decline was steep and fast and the UK index lost almost 500 points over a week so at this time all predictions are hard to come by.

The technical side of things definitely suggests that with the FTSE being so heavily oversold a correction is due. And indeed this morning the UK market opened significantly higher climbing to the 6,350 level. However is this enough a hint to built our whole analysis on it? Not really, we need to take a look towards the fundamental factors that would give us an idea of what’s to come.

So this week, the focus is mainly on the UK inflation levels due tomorrow and the release of the minutes from the Bank of England’s last meeting on monetary policy a couple of weeks ago. I think it would be inappropriate to speculate how these two events will play out but if I had to guess I would say that I would like to see a hefty correction higher for the FTSE 100.

Again, with the London benchmark index being so extensively oversold I wouldn’t advise any moves towards lower levels at this time. This is not to mean that another swing lower is impossible, I merely suggest that the risk factor in such a move outweighs any potential reward. So we will only focus on a potentially bullish scenario.

For this to take place I would like to see a break above today’s high, I would like to see the FTSE 100 moving higher than the 6,350 points. Should this development take place then my analysis suggests that the next targets for this reversal are the 6,430 points and the 6,570 points’ area in extension.

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alpesh

 

 

 

 

 

 

 

Alpesh Patel uses Sharescope Pro for his investment analysis

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The S&P 500 has pulled in rather dramatically

The S&P 500 (ETF Proxy – AMEX:SPY) has pulled in rather dramatically last week, and closed out right near the support offered by the daily 50 SMA.   I would expect to see a bounce now and a double top or perhaps a lower high form…

SPY 12-13

As I said last week, I am stalking an entry to the short side in Home Depot (NYSE:HD) as any breakout given the weak power is highly likely to be false and unsustainable.

On Friday, we got the reversal candlestick that I had been waiting for.  If price can take out the lows of that bar, I would be interested in opening a short trade with a profit objective in that same $94.50 area as I took profits into last time.

 

 

HD 12-13

Chevron  (NYSE:CVX) has followed through as nicely as you could ever wish for as the weakness in the price of oil spill over into this energy stock.

CVX is breaking to new lows with plenty of power, so I am inclined to let it run and just move to protect open profits by trailing stops down a bit to above the $107.50 level.

 

 

 

CVX 12-13

With so much short exposure, (and open profits) I would like to hedge my portfolio a bit by adding some long exposure to try and reduce drawdowns during next weeks market bounce. Cisco Systems (NASDAQ:CSCO)  has been showing great relative strength in recent weeks, and is pulling in to a zone of support as indicated by the grey box on the chart.

I would be stalking this on the daily chart for a valid candlestick reversal pattern, and would set stops below that bar’s low after it forms.

CSCO 12-13

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The S&P 500 remains in this weird holding pattern

The S&P 500 (ETF Proxy – AMEX:SPY) remains in this weird holding pattern that has become the norm recently after a big POMO rally.  I would expect to see price drift down to the 20sma (blue line), then whipsaw back to the highs before price can truly correct.  It remains a market without much interest until we break free from this tight range.

SPY 12-6

 

 

 

 

 

 

Home Depot  (NYSE:HD) is about to break out to the upside without much power or trend sponsorship.

As I stated last week, I am stalking an entry to the short side as any breakout given the weak power is highly likely to be false and unsustainable.  I will be watching the daily chart for a candlestick reversal bar, and will put my stop loss orders above that price pattern for a “double dip” short trade with a profit objective in that same $94.50 area.

HD 12-6

 

 

 

 

 

 

This week, Chevron  (NYSE:CVX) filled its breakaway gap, tested the resistance offered by its 10sma (yellow line) and turned lower.  I would remain cautiously optimistic and expect to see price break down to a new low, but would trail stops down a bit to just above the recent $114.95 highs.

cvx 12-6

 

 

 

 

 

 

 

For more information about Bo Yoder visit The Market Doctor

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The FTSE 100 demands a careful approach during the next couple of weeks

The FTSE 100 has settled in a broad sideways formation for the past few weeks, trading between the 6,650 and the 6,750 points levels. This was the aftermath of the previous uptrend that has led the UK index to such highs but this uptrend is long gone now and the question that needs to be answered is whether the exit from this formation will be towards higher or lower levels.

Normally I would think that with the UK economy doing moderately well in recent times and with the Bank of England supporting the economy’s potential to handle a higher interest rate policy sometime in the next year the way to go would be lower. You see a move towards a higher interest rate policy always leads to losses in the stock market as money isn’t that cheap any more.

However what we must take into account here is the timing of this prediction. It’s the second week of December and everyone’s mind is set on the holidays’ season and how to best spend this time with family, friends, away from work and so on. So in times like these the money markets are usually quieter, less active and trading volume drops significantly.

And that’s a perfect place for increased volatility and unpredictable developments to occur. So even though the fundamental views point towards a reversal to the downside I would be more careful as we approach the final weeks of the year. This is not to say that I think a break higher should be expected, this is me saying that in periods of reduced volume all bets are off.

Looking ahead in the present week, I believe that the sentiment is bearish and again my key pivot point for the FTSE 100 remains at the 6,650 points. A technical level that I have mentioned many times in my notes to you as it appears to be the most important support area for the short term.

Any breaks below that should lead to considerably lower levels but as I mentioned above, caution is advised. Personally I wouldn’t be surprised if we saw the FTSE breaking below this level, staying there for a couple of days and then reversing its course and trading above the 6,700 points again! It wouldn’t have been the first time the market rallied in the final weeks of the year.

So to sum it up, the FTSE 100 is trading sideways with the sentiment pointing towards a considerable correction to the downside but due to the uncertainty these last weeks of the year always bring along you should be very careful in your trades and focused only on short-term opportunities.

To receive my free daily newsletter or to subscribe to my premium NewsletterPro service please visit www.investingbetter.com .The

alpesh

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Bo Yoder 3D Apex Trading US Update

The S&P 500 (ETF Proxy – AMEX:SPY) is just hovering near its highs after the energy from the last central bank intervention burned itself out.  I see no real trading opportunities in the index itself, and am in a holding pattern as I wait for the holiday doldrums to begin as we head into the month of December.

SPY 11-29

I wanted to use Home Depot  (NYSE:HD) from last week as a “teachable moment”. This trade as you know started out as a double top pattern, which set up and then hit my profit target zone near $94.50 (orange line with arrow).

Since then, the stock has rallied back up to retest the highs and looks ready to break out to the upside.  This experience illustrates clearly how an active trader can extract value from a market without being “stuck” holding on to positions for a long time.

A trade like this is worth 2-4% in profits based on your initial risk, more profits on one trade then most traditional investors would expect in 3-6 months!  I find that many of my students think that they need to chase “the big move” in order to out perform, and the first task is to show them how many small’ repeatable and reliable profits they miss out on while their capital is tied up in a longer term position.

Now, this stock is poised to offer a re-entry to the short side as any breakout is highly likely to be a false one due to the bearish power that I am measuring.  I will be watching the daily chart for a candlestick reversal bar, and will put my stop loss orders above that price pattern for a “double dip” short trade with a profit objective in that same $94.50 area.

HD 11-29

Chevron  (NYSE:CVX) drifted sideways until Friday’s session, when it finally followed through to the downside in a “breakaway gap”.  It tested the $110 area which was my target for partial profits, and is now looking like it will retest the lows.  I would trail my stop to protect open profits to the $116 level, and will see if the bearish power I am seeing on the weekly chart will take this stock down to new lows in the week to comeCVX 11-29

 

To find out more about Bo Yoder watch his short video here

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The FTSE 100 turns lower and tries to balance above the 6,650 pivot point

In my last note to you last week I explained why I thought the FTSE 100 was due for a correction and what my target price for the end of the week was. Today as I take a look at my charts I am happy to see that my analysis was correct and that indeed the FTSE 100 after battling between investors’ hesitation and the Thanksgiving holiday midweek found its way down to the 6,650 points area.

Now if anyone takes a look at the technical outlook of the FTSE 100 this morning they will understand why I thought that the 6,650 points has to be considered a short-term pivot point. Moreover, the FTSE’s trading action the week that passed confirmed my assessment and highlights that area as an important level of focus for the London benchmark.

The 6,650 points area was the lowest point for the last upswing that drove the FTSE 100 above the 6,700 points, it was the point where the market got its last push higher before it lost all momentum and stalled its previous uptrend. This exact fact indicates why I believe that a successful break below that area will signal a complete reversal in the UK index.

I can’t be sure whether the stock market will go straight ahead and break beneath this area of resistance this week or whether we should expect a consolidation between the 6,650 and the 6,700 barriers. A number of important reports are expected to be released over the next 5 trading days so it will ultimately come down to how bullish these will prove to be.

As I mentioned last time investors are thinking that as we get near the end of the year maybe it’s high time to rebalance their portfolios against a less accommodative interest rate policy and that could mean more losses for the FTSE 100.

So my advice to you this week is tread carefully, the index is trying to balance on a very fragile technical level as the momentum is slowly but surely turning to the downside. It might not find the necessary push this week but you should be prepared if any new developments occur and tip it over.

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alpesh

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