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Tuesday, January 31, 2017

Investors' Panic - Market update 1/31/2017 Technical Tuesday

Surveying the damage on this technical Tuesday. I got my hands full; I'm still updating charts, and I've already revised my outlook more than once. In short, After yesterday's sharp sell-off, I'd expect this snap-back rally to continue for a day or 2.

Short term support (Dow 19,999, SPX 2282) broke, and the 5 min charts were destroyed, but not seeing any damage to the 60 min charts. Damage means key support is breaking, and so far we haven't seen that. Energy may have took the brunt of it, but Oil isn't broken.

The S&P isn't broken, and until it is I wouldn't be a seller here. In fact, now that we got our pullback, I'm cautiously bullish again. If the 2277 level were to break, and take out support at my blue line, I'd get short term bearish again.

The financial networks managed to create a lot of panic on Monday, calling yesterday's 120 point sell-off the,"worst sell-off since Sept. of last year", or the "worst day of 2017". The blond on CNBC's World Wide Exchange even went as far as to call it a "correction". A 1 day event isn't a correction. Turn off the Fake News, or it will negatively impact your trade.

Airlines were sold. We don't trade Airlines, but I could have told you to sell $AAL. Holding support in what looks like consolidation in a bull market.

The Russell pulled back further than expected, but the 1347 level remains the level to watch. Looks like it could be the start of a correction, but it's too soon to tell. The pattern has changed slightly, but as long as the lower triangle line in purple doesn't break down, I can't get too bearish.

I can tell you the selling was way over-done with the $VIX up 20%. Let the $VIX be your guide, not the emotional crybabies trolling my twitter feed.

Take Care, AA

Monday, January 30, 2017

Market update 1/30/2017

Markets are starting to look toppy, but so far we haven't seen much weakness. That means we probably haven't seen the reversal, and that's part of the reason I've raised our wave D target on the Dow. Futures are only down slightly this morning, and that doesn't confirm a reversal into a panic wave.

So we're looking for a slightly higher high, after consolidating into a tight down turned range (or wedge), on Friday, which would be a (tiny) sub-minuette wave 4. See the annotation added to the chart for a full explanation... Financials to lead as per the chart tweeted late Friday afternoon.

Once we see a reversal, look for a 500 point correction - in a panic wave E - near the bottom of the larger pattern. Risk is to the downside.

Looking at some longer term charts:
Semiconductors re-tested the top trend line (in blue). I'd be adding to shorts (called "scaling in..."), not covering here. $SOX is also a market leader, so it may lead the way down... $SOXS is more volatile than most indices, and one of the more difficult charts.... Know your risk tolerance, before you trade into 3X $SOX (bear) $SOXS. 15% moves are commonplace in a reversal, and we could see much bigger moves shortly.  

If you're trading the Russell; See the short term pullback target from last weeks update. From there I'm looking for a retest of the upper blue triangle line on this broadening top in blue.

On the next chart you'll see I've raised the upper pattern line, and there's even a good possibility that upper blue line is taken out in a throw-over, as the bottom line was in what I have marked wave "4". If you're asking for predictions, and timelines, you're not trusting the charts, and If you're afraid to sell into strength, I guarantee you're going to miss the sell target. Keep your emotions in check, and in the mean time support is the SMA50 around 1355.
The 3X Russell bear is more volatile than the SPX bear, and a good choice for those who want a little more bang for their buck. The $RUT is also where risk off starts, as many small-caps are buried in debt.

Speaking of debt: Investors seem to have forgotten about risk in the Euro-zone, Portugal, Italy, Greece, and Spain (PIGS), to mention just a few.... don't forget Cyprus, and Iceland (both bankrupt)!
As I pointed out last week, emerging markets aren't trading at new highs, regardless of what the dishonest financial networks are reporting, and none of it's Trump's fault, by the way.
3X emerging markets bear is another option, for traders who are looking for more bank for their buck, but for now I'm going to keep that chart close to my chest.

Good luck this week Traders, AA

Friday, January 27, 2017

CNBC tries to make global markets look stronger than they are

CNBC World Wide Exchange reported on Wednesday: that "all 3 US indices hit new highs", and then added that "global markets are also trading at new highs", which is just not true. I'm going to call that, "fake news", in a rigged economy. It's easy for the powers to be to rig US markets higher, and then report how great things are, but global markets are in bad shape. Spain, Italy, Greece, Portugal; all the usual suspects. And if you think markets aren't rigged; I'd point to the 400+ point flash surge we saw on the $NYSE, in Dec., on light holiday trading

Yes the Dow hit 20k, but the majority of global markets - including the global Dow are not trading at new highs. Anyone with access to charts can check me out on that. The $FTSE is off it's highs, and the all time high on the $DAX was 12,390, made back in 2015.

Here's the DOW taking out our wave D target yesterday. Took a little longer than expected, and I'd expect it to hold up in the top of this range, going into the end of the month, which is only 3 trading days away. Bullish superstition holds that if Jan finishes strong, that sets the tone for the whole year.
There's a good chance the Dow retests the highs after we consolidate back to the bottom of the range - in what I believe is a panic wave E - but I'm expecting volatility to return in 2017, and my New Years resolution is to sell every rally....    

 The $RUT did not trade to new highs, but once we see another little pullback, I would expect it to...
Support looks like 1360.

I like Biotech now that it's pulled back, and there's talk of not taking immediate action on ObamaCare. Key support on the NBI is 2872 (that was the high set back in 2014, and now becomes support). Short term resistance is 2880. The pullback looks like this on a 60 min chart.

Gold (and Silver) are now trading down with copper. 114 becomes resistance on the $GLD. looks like it overshot to the upside, after over-shooting to the downside.  Support on Gold is 1180, so maybe it builds a base here. Gold and gold miners are volatile, and not for the faint of heart.

Here's why you look at different time lines. Gold is holding support on the daily candlestick chart.

Miners fell out of a parallel channel in blue, but I'd expect a back-test in a snap-back rally. Target is 23.35. Can't seem to post that chart, so I'll tweet it, and that wraps up today's update.

Wednesday, January 25, 2017

Market movers and Fibonacci targets - advanced charting techniques

Market movers and Fibonacci targets

 GE leads the way to Dow 20k

The market continues to melt up as expected - as we trade into earnings season - and that means certain stocks are going to lead the way, and by looking at the earnings calendar, and the charts, we can try to determine which stocks are likely to lead the market. We call these "market leaders". These are the stocks which move entire sectors, and even the broader market, and by determining which stocks are being used to drive markets, and charting them, it gives me an edge on timing the entire market. This is part of my, "chart everything", philosophy.

This brings me to Dow component $GE: The same GE that owns (financial network) CNBC, MSNBC, and NBC. Part of the "dishonest", leftist, national media, as singled out by President Trump, and others.

MSNBC Commentators Protect Their Corporate Bosses at GE


The same GE that was brought under the (TARP) umbrella (protection) of the Fed, during the bank bailout, but there's even more to this story...  

Loophole Helps GE Benefit From Bank Rescue Program

 The same GE that benefited from sales of technology to Iran, well before it was legal.

Doing Business With The Enemy

 All proof - in my mind - that General Electric is part of the corrupt swamp, and every bit as crooked as any of the big banks, and a big part of the military industrial complex, which President Eisenhower warned us about. It's a "swamp stock", and it wants to be drained, but as long as investors are bullish fundamentals mean little. This is the same GE which quietly diluted it's shareholders in it's latest earnings statement. Who cares?

This is the same GE I identified earlier in the week, as "one (of the stocks) to watch".  

It's one of the few Dow components that's experienced a pull back, as the Dow pulled consolidated lower, and that's a tell. As long as GE is being shored up, the powers that be aren't in risk off mode.

The very morning I tweeted out the fact that GE had found support at the 200 day moving average, is the day that GE broke that support broke. This is normally a very bearish indicator, but GE did find support at a secondary bullish target.

Most traders are familiar with Fibonacci (Fib) ratios, and if you aren't you should do your home work...  

GE bounces off a key Fib retracement of 61.8% (aka "The Golden Mean")

Will GE actually make a new high? I'm not certain, but the above chart proves that GE is no longer leading the way down, and that is still one to watch, and it's proof that Fibonacci targets are worth watching.  

There's is nothing coincidental about that target, any more than the 38.2% Fib pullback targets on this LT Dow chart are coincidental.

Any more that the 61.8% retrace (of the previous decline) on the $USD is coincidental.  

If you missed my twitter update on Monday, I remain bullish into Dow 20K and probably into the Brexit news next week.
Most markets are trading sideways; either forming a top, or consolidating sideways.
You can follow me on Twitter @3Xtraders
Take care, AA

Friday, January 20, 2017

Market update Friday OPEX Inauguration Day

One word: Bullish

Dow could rally 400 points today in a powerful wave "c" (of D) in a broadening triangle.

The Russell also looks bullish after trading into a declining contracting triangle. That would call for a wave 5 rally to a higher recent high.

The 5 min SPX chart has me stumped, and I'm already out of time, but support looks like 2250, and resistance at 2265. Stocks could be pinned on this OPEX, but I think a rally is more likely. If not today, then next week, and into the end of the month.

Good luck Traders, AA

Tuesday, January 17, 2017

Market update Tuesday 1/17/2017 S&P Gold NASDAQ

Market update Tuesday 1/17/2017

This morning the market is no easier to predict, than it was on Friday, as we continue to trade into a tiny, yet complicated, consolidation pattern - seen on the 5 min chart below. Still, we have some support levels to watch, and as always let the $VIX be your guide to the risk on/off trade. Low $VIX = no fear. I think we're going to some short term volatility, but $VIX resistance looks like 16. 

Looking at the $SPX chart, and Monday morning quarterbacking, you can see where the S&P was manipulated higher (above the top of the top purple line at the top of what looks like a down-turned megaphone pattern), that was Friday morning, and the resulted in a little short squeeze. This is the whole reason high frequency traders placed their opening bid there in the first place. Nevertheless Fridays move looks like the first leg up (an impulse wave). I have an arrow pointing to 2242 - if we see another leg down wed, but maybe the 2263 level holds. This chart remains a work in progress. 

Another possibility is that the market whipsaws into a wave "b" triangle as seen below, but I'd bet we're going to see higher recent market highs, headed into OPEX (inauguration day) Friday. 

So, support looks like 2263 - 2265, and from there we either get another head fake rally, or a sharper pullback, or even one more shake-out, ahead of a bullish OPEX, and Dow 20k+ - at the top of the range. And let me add, anyone who is watching this sideways range or pattern, and asking me about time lines, for a 10% correction is wasting their time. I'm long term bearish, but we're stuck in this range for the foreseeable future. 

The NASDAQ and the $SOX on the other hand is a sell, but I wouldn't expect much until after the inauguration. 

Gold continues to hold up, and this morning is being bought at the 50 day moving average, but it's coming up against a short term bearish Fibonacci target of 2020 and the top of a bearish channel. Looks like it's going to be held up into OPEX, so the miner bulls get paid on their calls... typical manipulation. 

Gold miners have traded into what looks like a wave 2 suckers rally. Maybe we see a false breakout above the channel going into OPEX. For now it's just holding up. 

Someone recently asked me if gold, and miners, can sell off with the market, and although we haven't seen this happen for a while, it used to be the norm. Anything is possible. 

Take Care, AA 

Friday, January 13, 2017

Market update for Friday The 13th

Market update for Friday The 13th

What started as a simple update has turned into an extensive market update, so bear with me and excuse the typos.

My call to sell into Wednesday's close worked out pretty well, but I'm still left micromanaging the trade using 5 min charts. This is what most traders resort to, when they lose sight of the big picture, so I'm recommending caution here. Yesterday's sell-off was nothing to sneeze at, but I'm already focused on next big move. 

 Trading these very short term charts is often "a fools errand", and these are relatively tiny moves, even on the Russell 2000 ($RUT), but I suppose they add up if you know how to trade a broadening triangle pattern - the pattern I predicted weeks ago. Of course if you don't know what a "broadening triangle pattern" is you were probably lost from the start... Regardless, the Russell has been good for 5 trades in a row; (A)-(B)-(C)-(D)- and yesterday's continuation of wave (E), total well over 100 points.  

Short term: The big question becomes: "is the market finished consolidating in wave 4", and did we miss the bottom? This is what most traders, and investors are afraid of, and most traders are usually wrong. 

On the next chart, you can see the #SPX was bought at yesterday's lows - at the bottom of the bullish channel - watching a more reliable 2 hour time line. Short term resistance in red.

Now let me show you an alternate EW count (on the chart below), which is another wave b (head-fake) in an extended correction - marked "Alt: 4". Doesn't even look like a broadening pattern, right? This points to the little triangle we've been watching - on the 5 min view, actually being a bearish wave a in a larger correction. This is why you need to chart everything, using every timeline you can. It ads up to a lot of charting, but like anything, you get out of it what you put into it. I see 100's of traders on twitter spewing opinions, without any charts to back it up, and 99% of the charts I do see are absolute crap. Even most the so called pro's can't chart intelligently. On the other hand, the hedge funds, have 100's of skilled technicians, and quant trading programs on their side. It's the unseen hand that moves this market, and staying on step ahead, is a handful.  

 This is a tough call to make, because as I explained in an update last week, "wave B's are hard to predict", and now the RE count on the 5 min chart is called into question. There's a good chance we've already seen the bottom in wave B (on the S&P), and wave E on the $RUT, but I believe there are more reasons to expect another washout, ahead of OPEX, next Friday. From there, I would expect a little relief rally going into inauguration day, but that could be short lived.  
  1. Wave E is a panic wave, yet traders were quick to buy the dip. A little too quick I think. I'd like to see more fear in the market, ahead of OPEX. The $VIX has hardly even budged...  
  2. Wave c of E should divide into 5 waves, and so far we've only seen "iv" (looking at the 5 min chart).
  3. There's a good chance, the inauguration next Friday is going to be a sell the news event. 
  4. The longer term charts point to a bigger correction. 

So in short, I'd be a seller of this bounce of yesterday's lows. If we can build a proper base I'd expect to rally next week, and possibly trade into a bearish wave b.

The opening bell rings in 2 min, so I'm out of time. 
Take care, until the next update, AA 

Tuesday, January 10, 2017

Market update 1/10/2017 Oil & China in focus

Oil & China in focus

We could be watching the NASDAQ, since it's rallying to new highs, but that's what everybody is watching. Is the NASDAQ going to lead the rest of the market higher? No. And running with the herd is seldom the best trading strategy, so let's skip the NASDAQ chart.
Tech is a bloated pig waiting to be slaughtered, and I'd start by selling short the $SOX semiconductor index still trading near the top of the channel. Support is the bottom of that range around 844, or 811 in the unlikely event of a flash crash.

Still watching Oil because energy lead this rally at the start of 2016 - where I was extremely bullish by the way - and China, because China has lagged, and also because China has been having a nice run since I got bullish last week. See the Tweet below. 

 Today we're looking at the $FXI daily candlestick chart, and there are some important things to note. 

What should be immediately obvious is support can now be found at the 50 day moving average. This well established average is something every trader should be watching, because it's something the bots watch. I'm talking about the algorithms which are responsible for 85% of the trades in this, and every other market. If it's trading above the 50 day, it's considered bullish. When I see well respected traders on CNBC talking about the "150 day....", or some other average nobody pays attention to, I just have to shake my head.... you gotta be smarter than those fast money (cable television) traders, if you want to be a successful trader. More on that later, in a future video vlog.

There are also some advanced charting techniques that should be noted, on this chart.

  1. The support level for our lower trend line (in blue) is the previous low back in Jan 2016, rather than the Feb low, where most traders would draw it. 
  2. The shakeout below that blue support line, ended at a test of the purple channel line.
  3. The shakeout was followed by a volume spike, and a crawl-back above the blue channel line. That's bullish. 
  4. Your stop becomes the 50 day. Simple. 

Oil is more complicated, with is typically the case with commodities

Brent pulled back to support yesterday - Monday 1/9/16 - and that support becomes your stop hunt in oil - seen in the chart annotations.  Oil's getting a bounce this morning, but seems to be trapped here for the time being.


A Quick look at Gold: We see the $GLD testing the top of a bearish channel in blue, with plenty of resistance above it. 

SILVER $SLV went a little higher yesterday, but remains in a bear market

This update has already ran way past today's opening bell. If my charts help keep you informed, and more importantly, help keep you on the right side of the trade, please donate to using the PayPal butting linked in the left side menu of this page.  
Take Care, AA 

Monday, January 9, 2017

Technical Update on Silver and the Broader Market 1/9/2017

Technical Update on Silver and the Broader Market

Had a little technical trouble with my default browser crashing this morning, but I did manage to get some charting done. 

The trend on precious metals remains down, and the trend is your friend. 
The $SLV Silver chart is basically what the $GLD is to Gold. Extended wave 5's are common in gold and silver, and that's my forecast (wave iii of 5). If gold and silver continue to break out; I'll have to revise the EW count to a larger counter trend rally, in wave A of 2, and if you're unfamiliar with Elliott Wave Theory, you should review my free tutorial, linked in the left hand menu.  

    The broader market continues to whipsaw in a broadening triangle pattern, which was best seen on the $RUT last week. Nailed it! 

 Here's what the Russell 2000 looks like this morning, trading in the predicted range. Damn I'm good!

This morning we're seeing weakness in the broader market, and I'm expecting a pullback over the next few days. ST support on the 60 min $SPX is 2272, and below that 2252. Looking at the 5 min chart, I'm seeing the end of a bullish wave A (triangle), and anticipating a pullback into wave B. I'm not crazy about making predictions, using 5 min charts, but as long as they keep working, we'll use 'em. 


Resistance on the $VIX is 14.50, so as long as we stay below there, fear not. Wave b isn't easy to predict, or trade, but the areas of support are pretty clear. 

You can watch my twitter @3Xtraders for intra-day updates. If my charts make you money, consider donating to this website, so I can continue to bring them to you. 
Trade on, AA 

Wednesday, January 4, 2017

Stop Hunt on Natural Gas taken out - advanced trading techniques

Stop Hunt on Natural Gas taken out  

I've been bearish Natural Gas for some time,, and yesterdays 10% decline in NATGAS offers the perfect opportunity to talk more about, "stop hunting", which I briefly referenced in blog a few weeks ago. In short: stop hunting is being able to identify where everyone has their stop-loss set. Typically you see this after a higher high, in which resistance is taken out (shaking even the most bearish traders). That level now becomes what looks like support (seen in pink on the chart below), but this higher high is only used as an opportunity for the bulls to take profits. This is where the smart money sells. You could also call this a "bull trap", because it's actually a false breakout, and the retail bull is the one left holding the bag....  

DEFINITION of 'Stop Hunting'

A strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set their stop-loss orders.

Read more: Stop Hunting Definition | Investopedia
Commodities traders took out the stop hunt on NATGAS, and it plummeted 10%. I've identified this stop hunt, on the chart below, and the gap down confirms it. Today we're seeing a little shakeout below 3.35 support, but now I'd expect a dead cat bounce off that support. May even back-fill the gap in due time, but this looks like a major reversal to me. 

This is typically how commodities trade, shaking out the weak hands on both sides of the trade, and more and more - lately - we see the same thing in equities markets. This explains why searching for accurate technical targets is not nearly as important, as having the discernment to recognize false breakout's, and shakeouts, at pivotal turning points in the market, and being patient enough to allow the trade work. Building a top, is not much different than building a base; it's takes time. 

Speaking of commodities: Trading commodities offers far greater risk than trading equities, due to their inherent volatility. It's not for everyone, and trading commodities is especially NOT for the unlearned. Same goes for volatile sectors like gold miners, and biotech, and their 3X levered (ETF) counterparts. Ask the gold gold bugs of 2015, and those now trapped in their NATGAS long trades....        


Tuesday, January 3, 2017

Happy New Year Market Rally

Happy New Year Market Rally

Happy New Year Market Rally as predicted last week, when I said, "I'm afraid the market makers got it wrong", on Friday.

Turns out selling the market into a weak $VIX, heading into the first trading day of 2017, was a bad idea. I only hope the hedge funds were using me as a contrarian indicator, because that's going to happen, believe me!

Today Monday: Not long after the open (with the Dow up 160 points), it was already time to take profits, as the price action back-tested failed support.

The $SPX actually touched my red line, before reversing, but that didn't change the outcome.

The Dow also seems to be trading in a sideways pattern, with wave D target of 20k.

The $VIX has since come back to earth, and even broke below the 13.42 level for a moment this morning.
Now I'd expect the market to consolidate for a day or two, before making another run at the recent time highs. The market needs to consolidate, after last months run, so we're either going to trade the range (in purple), or pull back in a sharper correction, looking forward into next week.

A couple important announcements:

  1. I've deactivated our private twitter feed @3Xtrades. There were only 50 traders following me there, and only a few donating.... It's a lot of stress feeling like people are constantly depending on you, and I tend to try to hard, which leaves me feeling taken advantage of, and at some point I have to cut my losses. Before you know it the market will be crashing again, and I figure it's better to try to reach a wider audience, than try to micromanage trades for a bunch of deadbeats. Thanks to those who continue to support this website, and you can follow me at @3Xtraders, at this website, and on YouTube. If you're a private investor, or hedge fund, I'm looking for work. Feel free to contact me.   
  2. The Public Charts are also gone. Funny all the positive feedback I've received from those charts, and some folks even had the nerve to complain when I took them down, because they were "using them"... but again, none were willing to help support the cause. The public charts area may come in handy some time, so I'm leaving the link in the side menu, for future reference.  

Happy New Year, AA