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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 

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