Page menu

Friday, December 30, 2016

Market update - Last trading day of the year

Last trading day of the year

Without getting into the politics surrounding the fear we've seen in the market this week - we saw the $VIX find it's legs and break above resistance (the previous high) @ 13.42. That now becomes support, but I'm expecting the $VIX to break down, below that level, maybe no sooner than the opening bell. 

The $SPX found support as per my 5 min chart tweeted out, around noon, yesterday, 12/29/16, but there are several possibilities, in this sideways range.
With out getting into advanced Elliott Wave Theory, I think I've narrowed down the possibilities to 2. 

  1. Market trades back to the top of the range - around the 2275 level on the S&P (in wave D). 
  2. We back-test failed support @ 2258, pull back and rally into a bearish wave ii of C (a suckers rally). The Fibonacci target on that trade looks like 2260ish. 
Either way I'm expecting this sideways consolidation to continue, and considering that Money Managers (MM's) should be forced to put money to work at the beginning of the year, I like option 1 the best. This outlook is also bolstered by the tight range the Dow is trading in. 
The 5 min $SPX chart:   

We saw a monster 7.5% rally in gold miners yesterday. That's a 22% move on the 3X leveraged ETF's, and I don't think it's quite over yet.  
This confirms the panic trade into gold, but as powerful, as this move was, I believe this is only a snap-back rally - on the $GDX - in wave iv of 3. Resistance is 22.44 on the chart below. 
The opening bell just range 10 minutes ago, so 
let's refresh the charts, and post them again. 
Little changed on the $SPX 

 $GDX up another 1.22% - with mild resistance at 22.18 

That's about all the time I have for today. 
Happy Happy New Year, Traders. 

Thursday, December 22, 2016

About Holiday Trading

Holiday Trading 

Bah humbug! 

Trading into, and over a long holiday:

Whether it's Christmas, Hanukkah, or the 4th of July, holiday trading typically sucks, especially for the bears. Although there may be exceptions to the rule, this is the case 90% of the time! The Pro's know better than to go short into a long holiday, and the retail bear should follow their lead.

You've probably heard the term, "never sell a dull market"? That means you, retail short seller.

You've probably also heard the term, "thinly traded markets"?  With so many traders on vacation, volume, and volatility typically remain low. Low volatility = no fear.  No fear = no panic *selling. *The exception to the rule would be if the $VIX were to find it's legs. Crazy things can happen in thinly traded markets, but seldom do. 

Holiday trading is notoriously difficult to predict, and I know some traders close down shop early, just to avoid it all together.

What you typically see is short covering going into a holiday. You can think of it as the, "risk off trade", for bears.  You typically don't put on a bunch of bearish bets, before heading to the slopes, unless you're hedging your long positions. If the smart money has already covered their short bets, this leaves the retail short left holding the bag.

This holiday season we saw short covering ahead of Thanksgiving, and more short covering into Christmas, and today thinly traded markets continue to hold up (at or above resistance which for now is *support).
For instance: Brent crude continues to hold above key support. It's not that there is any reason to be bullish on crude oil, it's just that the bears are vastly outnumbered in this market environment. Some of this may also have to do with Crude Oil contract expiration dates, a topic for another time. $USD is also seen holding up above *support.    

The NASDAQ sitting on what looks like *support

[Edit 12/2316: Support on Brent crude - as it turns out - is just above 53.73, looking at yesterday's candlestick chart]

There are a couple additional factors holding markets up into the end of the quarter/year.

  1. December is a big window dressing month, and a lot of money has been reallocated into financial stocks (aka financials), and building a top after a strong rally, is much like building a base after a sharp decline. Both take time - usually several weeks.   
  2. Fund managers don't want to have to pay taxes on massive 2016 gains, so they're waiting for 2017.
When traders return from holiday, the bulls should be forced to continue chasing performance, but if instead we see profit taking, and the $VIX get it's legs, that would be the time to sell. Watch the week of Friday the 13th.
Part of market timing is knowing when and when not to trade. If you've found yourself fighting this entire rally, you know exactly what I mean.

*For advanced traders this is no place to become complacent, because this level becomes your stop hunt. Definition of Stop Hunting   

If I've helped you, please help support the cause, by making a generous donation using the PayPal button linked in the left hand menu of this page. A $29.95 donation grants you access to our private twitter feed @3Xtrades. See the "Join @3Xtrades" page tab near the top of this page for more info.

Wednesday, December 21, 2016

Website Maintenance, and Equipment upgrade

Website Maintenance, and Equipment update get's a face lift  

When you click on this website, you'll notice I updated the background (header) to blue, with (chart) candlesticks. Also changed the text (& links), to red, to match the 3X logo. Looks pretty snazzy, right?

And an Equipment upgrade: 

Computer is running stable, so maybe I don't have to replace the motherboard, after all, but I have one on hand just in case. Picked this up Sunday evening, as planned in the previous blog.

I also picked up a bunch of new high performance case fans. Completed installing these on Monday. Lot's of dust, and managed to cut my finger pretty good. "It's a dirty job, but someone has to do it". Spent most of Tuesday afternoon gaming. Computer is running cool and quite.

7 fans in this 70 lb. Super Tower: 

5 fans blow cool filtered in the front, and sides, and 3 exhaust the heat out the top, and the back. 

The Beast

I've also been running some diagnostics: 

I found my on board LAN chip was working yesterday, so I removed the PCI LAN card, and everything thing was working fine.

 This morning wed. I noticed my router acting funny, and when I powered up I found I had no internet. Well, now I know the LAN chip on this board is dead, and what was causing the router resets for what seemed like a year or longer.

Once I reinstall the PCI card, and got everything back together again, I found I had no power, because I had inadvertently unplugged the power switch relay. Doh!    

Of course there's no way to get your fingers underneath the PCI card, even if you could see what you're doing, so that card had to come out again. I also needed the manual to determine which pin was for the power switch. Luckily I didn't have to search vary far for it. 

All that was left to do now was disable the on-board LAN in BIOS, and then put the case all back together for a second time.

Finished up at 7:35 AM, with plenty of time to get settled before the opening bell. 

Case closed - for now anyhow. 

Monday, December 19, 2016

An Important Announcement from the Head of our IT Department - Christmas Hell

As CEO of I where many hats, including being the head of our IT dept, Anthony Allyn 

If you follow me on twitter, you know I've had a lot of computer problems lately, and that causes me a lot of stress, knowing folks are relying on me for accurate charting... so here I am working another weekend, and bitching about it. Think about that the next time you donate to my PayPal (located in the left side menu). Also note that I've updated the menu text on this page to match our logo (red)? Looks much better I think.

According to Murphy's Law, "Anything that can go wrong, will go wrong" (at the worst possible time). These technical issues may at some point, become detrimental to our trade, and I want to avoid this as all costs. 

This weekend the computer seems stable, but last week windows started hanging on the boot screen, on startup, and on shut down. I had a similar problem a couple months ago, and replaced, what I thought was a defective SSD (solid state drive). Turns out the drive wasn't the issue, so I tried plugging into a different SATA port. That solved the problem for a couple weeks. Now I'm thinking bad SATA cable, or bad motherboard. Could be a bad PSU (power supply unit), but I doubt that. Those who are familiar with troubleshooting computer problems understand how frustrating, and time consuming, it can be....  After doing some trouble-shooting after the closing bell, on Friday, I found something called "superfetch", was turned off, but unsure that has anything to do with the problem,  probably not.

Meanwhile, we're still looking for a major market top, up here, somewhere, and believe me, you won't want to miss it! Quoting myself, "The big money is made on major reversals, not while trading confusing (sideways) consolidation patterns". The point is: I don't want to be sitting on a dead computer the next time the market crashes, and miss the entire move!

Considering that the motherboard is probably dying: 

Friday night I was up until 1:30 AM researching (worrying about) whether it would be better to perform a major system upgrade, or just try to maintain the current platform (AMD/AM3 running an Phenom II 955 processor), which isn't half bad, but is about to become obsolete, as AMD launches their new AM4 platform along with the long awaited ZEN (Ryzen) chip.

Some of you may remember me Tweeting about how, "AMD is going to kick Intel's ass"? 

That was back towards the end of 2015. 

$AMD was one of my favorite picks for 2016. 

Phenomenal 900% upside!

While I'm tooting my own horn: 

During Friday's trade, after just re-initiating my buy recommendation, on Evok Pharma, $EVOK was up an astounding 65%! What you do here is take profits, and leave 10% of your position on indefinitely. It's called, "playing with the houses money"! In other words, the shares you're left holding are paid for by your winnings.

We see the market losing momentum, and we also saw a big reversal in the US dollar. That was a good trade, in an otherwise dull market. There's always a trade somewhere, and I recommend selling the $USD, and better yet the USD/Yuan, into any further strength. Gold is also starting to look interesting at these levels.

Getting back to the issue at hand: what I finally decided was to not invest too much money in an obsolete AM3 system. Better to wait for prices to come down - on the latest technology - and then perform a major upgrade in a year or 2. I may even switch to Intel next time.

As of this Monday morning (edited):  

The Computer booted up with no problem, and the market seems to be holding up as expected.  I did end up driving to the city for a new motherboard Sunday evening. This is a good solid board, for $90.00 (on sale). I also need to replace all the cooling fans (7 in total)... so make that $160.00 in total. Not bad for peace of mind.
ASUS M5A97 R2.0 Product Overview 

I expect stocks to hold up into the end of the year on thin holiday trading; 

I figure that gives me 2 weeks to resolve this issue, and that probably means installing the new motherboard, and the best time to jump into that project is probably over the Christmas holiday.
"Sorry kids, no Christmas this year! Don't bother daddy while he's working." lol

I know it must seem - to Twitter followers - like I'm always complaining about computer problems, but most get solved pretty quickly. Just wanted to set the record strait. 2. Give Traders a heads up. 3. Explain to you, that a lot more goes into providing you up-to-date technical charts, than you might think.  

Here's a short list of computer problems that were solved over the past year:  

Connectivity issues solved! At one point I was sure my connection was being hacked... this issue was ongoing for quite a long time. 3 years...?

a. Rebooting of the modem, would bring the connection back, but only for a short period of time an hour/day/week.

b. Bypassing the on board LAN chip, with a PCIe LAN card seemed to solve the problem, but only for a while.

c. Replaced the old cable modem, with the latest equipment upgrade. This turned out to be a waste of time.

After ruling everything else out, the problem was narrowed down to the wiring. This led me to an already installed signal amplifier, which I had inadvertently bypassed, when I ran the cable. Doh!
Once I figured out how to remove the locked connection caps; I re-routed the cable... and problem solved! Took me all of 15 min.!  

Over the summer a nasty ransom-ware virus called Cryptolocker caused me to lose (though encryption) all my files. At that time, I couldn't find a decent program to decrypt the affected files. Finally after 2 days of headaches, I spent a another entire day reformatting the computer, rather than pay the ransom to get my files back. I don't negotiate with terrorists.

Final note: 

After being trolled 3 times in one week, we're going to a pay service. If the hedge funds want to troll us, they should have to pay like everyone else. I even went so far as to start building a new membership website, but quickly realized that's not the route I want to go. Instead this website will continue to operate on your generous donations. See the updated, "Join @3Xtraders FAQ" - (page tab) linked at the top of this page.
Happy Holidays and Happy Trading in 2017, AA

Wednesday, December 7, 2016

Video Update - Dec. 7, 2016 - Searching for the market top

Starting to work with video (format) again, and planning to revise the YouTube channel.

Here's what I got so far: This is an update to last weeks block where I talk about candle stick analysis, and calling market tops. Sorry, this is all I got time for this morning. Good luck, Traders.

Monday, December 5, 2016

US v China - Currency War?

Not only did the $USD recently take out my target at the top of the broadening triangle pattern seen below...

But I'm talking about the BIG reversal of the USD/YUAN!

For disclosure I have NO position in any currency trades, and don't expect to... for the foreseeable future.  

Are the Chinese going to trash the $USD?

We know China holds a considerable amount of US debt, and we see Trump standing up to China, but to me, it's not so much that Trump took a call from the leader of Taiwan, but the media circus surrounding this whole event. It looks planned. Here's the stock photo of her talking into her speaker phone, courtesy of the dishonest Main Stream Media.

I even saw one of the talking heads on one of the major news networks explaining that we must not offend China, because they hold a large amount of our debt. I call this, "national media hype", and a signal of whatever the globalists are planning. I believe they plan to trash everything Trump says, and does, and use it as an excuse to sabotage the US election, and the global economy. This includes US markets, which I expect will get trashed next year, and beyond, as the powers that be, make a scapegoat out of the Trump presidency, and there's still the possibility that the election is stolen, in a revolt of the Electoral College...

Speaking of the broader market (and oil); both higher on this first Monday of the new month. It was an easy call.

You can follow me @3Xtraders or @3Xtrades (private), depending on the level of service you require.  We may or may not move to a (paid) membership site, in the future, but until then all services are funded by your generous donations.

Good Luck, AA

Friday, December 2, 2016

Top 12 Reasons The Trump Rally Isn't a Trump Rally

Top 12 Reasons The Trump Rally Isn't a Trump Rally 

  1. Stocks actually crashed the night of the election. From there what we saw is called a "short squeeze", in the bidness.   
  2. Trump isn't president yet. He's technically not even, "president elect", until the electoral college renders their decision later this month. 
  3. The market was already rallying, before election night. This is just a continuation of the rally, which started when Bush bailed out the Wall st banks, and continues as Obama, and the GOP, spend, spend, spend... Don't let republicans tell you that Obama drove the debt... 
  4. Treasury markets had been selling off long before election night. That money had to go somewhere - equities, gold, bank stocks, etc.
  5. Short-covering into the Thanksgiving holiday (typical).    
  6. Informed investors know the Dow is not representative of broader market. The New York Stock Exchange isn't trading at all time highs.
  7.  Higher Oil prices have helped lift the market, thanks to OPEC. 
  8.  Wall Street bonuses must be paid, so drive stocks into the end of the year. "Greed is good"
  9. The #1 reason stocks rallied is because uncertainty was removed on election night - regardless of who won... 
  10. Dec is a big window dressing month, so we're seeing a re allocation of funds.... 
  11. Stocks typically rally in a election year. You could call this the, "election rally", but it has nothing to do with Trump. If Hillary has won, we probably would've seen a broader  market rally. Wall Street hates Trump, believe me! 
  12. Taxes. Fund managers want to wait until 2017 to take gains. 
Wall Street does not represent Main St., and "New All-time Highs", is where major tops are usually found - not rallies. Don't trust the media hype.
I wish I could credit Donald Trump with the market performance as of late, but nobody had been a greater friend to Wall Street than Barrack Obama, and the republican congress. You already see the MSM setting setting Trump for failure; questioning every move he makes. I expect market turmoil under Trump, not that he can be blamed for the market bubble we find ourselves in. He's spoken openly about this, on more than one occasion. Trump is no more responsible for this rally, than he is for the coming crash.

Thursday, December 1, 2016

Gravestone Doji Candle Doesn't Bode Well For This Market

Gravestone Candlestick Spotted on the Dow 

I don't rely heavily on candlestick analysis, yet is is one of the things I watch, and especially when I'm calling tops. Anyone who has been followed me over the years knows this. Gravestone not only sounds ominous, but it's often a an accurate indicator. Here's decent definition of the dreaded grave stone candle from Investopedia (linked).  

There's also something called an, "Bearish Engulfing Pattern", but in this case my definition varies from the norm. There may even be a different name for this pattern..? Please allow me to explain. 

  1. Often you see the price action continue unexpectedly, after what looks like a bearish reversal candle - in this case a bearish hanging man, which we saw last week (on Wed.). Normally we call this "being early", which some consider being wrong, after calling for a reversal. In this case I chalk this anomaly up to notoriously unpredictable holiday trading, as many traders remain on vacation going into the week after Thanksgiving (this week). This goes along with the term, "don't sell a dull market", which I wholeheartedly believe in. 
  2.   The reversal candle in question was from a week ago (wed.). The market held up and went higher within 2 days. This goes along with the theory that you don't always trust a short term breakout. Often times a 1 or 2 day event is a head-fake. I personally never trust a 1 day breakout.
  3. Next we see the market break down, as the price action engulfs the top of the bearish candle. 

See the annotations on the chart for my explanation.       

We can also confirm that gravestone doji on this DOW chart.  

As far as oil we've seen Brent break out to a new recent high, and the target looks like 54.75. Like I said earlier, "never trust a one day breakout". 

That's all I got time for today. You can follow this blog, or on Twitter @3Xtraders or @3Xtrades (private) for serious traders. Please read the FAQ linked at the top for basic rules and regulations. Take Care, AA