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Friday, July 27, 2018

Market Update, July 27th, 2018 - FaceBook - Best Call Of The Year

 Best Call Of The Year

The bearish reversal in Facebook shares, going into Earnings!


I can't seem to find the tweet were I called Wednesday's retest of the recent highs in twitter "bearish", but I was able to find the beat tweet that has the bearish chart embedded... Not only was this the best call of the year, but it was easy, and timed perfectly!

Look, If you don't know what to do at the top of the channel, then you shouldn't be trading.

Same could be said for the parallel channel on the $NDX (big tech) chart below. What's also bearish is the the way Wall Street investors are shrugging their shoulders at a historic, 1 day, $100b loss. That scream complacency! I'm not calling for a tech crash today, but the longer this continues, the worse it's going to be.... Could overshoot the top of the channel, or perhaps the channel is broadening, but I can assure you, my channel lines are parallel. 

This summer has provided some tremendous trading opportunities, as I laid out in my most recent Vlogs (video updates). 

1. Called the Market direction going into the summer, which turned out to be super easy...  knowing the $VIX would be crushed on low volume, as usual. The $VIX continue to trade below key resistance @ 14, and as long as that continues the broader market can continue high.
2. Called the most recent top in Oil (again), which turned out to be relatively easy, as well.  Also called the subsequent short squeeze... that still turned out to be a monster trade. Wish I had stuck with it longer! Also caught the bearish reversal in Natural Gas, which proved to be a bit of a challenge.

3. Called the breakout in Apple, ahead of the "Buffet effect", one of my best calls this year. That trade was based on textbook Elliott Wave theory, and I should really do a followup video.... Find the original video that predicted the breakout, below.

4. Called a nice reversal in FAANG stocks, which resulted in a couple nice bearish trades in the 3X leveraged inverse fund. I also called the following swing trade, back into FAANG, calling the short trade "dead in the water".   

5. Yesterday's bearish call on FaceBook. The technicals worked perfectly, and no waiting... going into an earnings miss. As I mentioned above: This is probably my best call so far this year, because of the 1 day percentage gains, and due to the fact that calling tops is always difficult, and nearly impossible to time.

Just goes to show you don't a business degree, or even a series 7, to beat the market like a rented mule! All it takes is. 1. knowledge, most of which is  widely available free on the internet. 2. Experience. 3. Charting skills. 

RE: The Public Charts area, I've since taken the PCA down, for a couple reasons. 1. Until the YouTube channel takes off, folks aren't finding the public charts, and that results in a lack of support. I'm 100% crowd funded, by the way. 2. This is a complicated market. We've found some awesome trades in Energy, Oil, Natural Gas, as well as names like $AAPL Google, and Facebook - to name a few - but this requires some intense charting, and at least 100 chart views to pull off, and providing all those charts in one place, is only going to confuse people. 3. It's a distraction. If I had been worried about updating the PCA, I may have missed the big reversal in FaceBook. There are just too many charts views to monitor in one folder.  Maybe I'll revise the public charts area, to 1 or 2 critical charts when the timing is right, but for now just continue to follow my work on twitter.

Take Care, and enjoy the rest of the summer,
 Anthony Allyn

P.S. I ran out of time, before I could post the links to the videos... but you can find them on 3XTraders YouTube channel  


Wednesday, May 9, 2018

Market Update May 9th: Panic to Grip Market's Above $VIX 16.50

Seeing a little relief rally this morning - after yesterday's pull-out, of the Iran deal.

Not sure why we had to wait a day for it, but I suspect this rally will be short lived.

One sector I didn't have time to cover in yesterday's vlog, is the $RUT, which is breaking out to a new (lower) high this morning. That means the trend remains down. Catch the next YouTube update...

$VIX targets revealed in yesterday's - cued - update.

Monday, May 7, 2018

Special Announcement - Market Updates Have Moved 3XTraders YouTube Channel

Market Updates Have Moved 3XTraders YouTube Channel 

A link to that channel can be found in the left hand menu.

Update for 5/7/2018: Market continues to rally, lead by Apple, as predicted last week.

 I'm also liking emerging markets....

You can find a link to my Public Charts area in the left-hand menu right here @

 Thank you for your support. Subscribe Latest Vlog below:

Friday, April 20, 2018

Market Update 4/20/2018 - Victory Dance!

That's right! It's time for another victory dance!

After calling for a severe correction in the semi-conductor index - $SOX - in Wednesdays Market Update, we saw the 3X leveraged bear - $SOXS - up 13%, on Thursday!

This call may pale in comparison with the market top I called back in January, or the bullish breakout I called for in the broader market, going into last Friday's close - not to mention the most recent top I called on the broader market, on Wed, but this trade was perfectly timed, and executed, and the news - manufactured or not - confirmed the trade.  $SOX (short) was the place to be, and calling out that specific sector, is what makes this one worth celebrating.

"Taiwan Semiconductor Warning Hits Chip Stocks And Apple" []

I expected this trade to take a couple more days to work, heading into OPEX Friday, and that's usually how it goes... so having this trade pay early is an added bonus!

As I tweeted out yesterday afternoon, I've already taken profits, and expect dip buying at the bottom of the bullish channel. Could provide for a nice 3 day swing trade, going into next week.

$SOX is a market leader, so yesterday's reversal could be bad news for the tech bulls. We may see the NASDAQ follow, but time will tell. I can tell you the $NDX is sitting above support. Even $SOX didn't take out the previous bottom, so a bearish reversal can't be confirmed, yet... 

How 'bout that bearish NATGAS trade down 3%?!! I was bearish last week, and I remain bearish, now that support at the 50 day ma has been taken out.

 Have a great weekend, AA     

Wednesday, April 18, 2018

Market Update 4/18/2018 - Market breakout Sustainable?

Thought I'd dust off the blog today, and put it to use, since I need more room to write, than LinkedIn affords. I can't even embed multiple imaged there, without writing an article, and the software is buggy. Not impressed with LinkedIn, and not finding many referrals there.  

I've spent several hours charting this morning, and it's taken that long to get a handle on the charts.

We caught a nice bullish reversal, going into Friday's close, despite the foreign hedge-funds trolling me, while hammering the market down, in the final minutes. That's become par for the course, at pivotal points in the market, and I'm sure it won't be the last time...

I remained bullish into Tuesday's breakout.

If you're focused on the very short term (like today/ tomorrow), there's a good chance the market holds up into Friday OPEX. That's not much of a prediction.... We've seen this happen a million times; everyone gets bearish ahead of options expiration, and then they lose, on their bearish Options bets.

In the meantime: I'm watching -

1. The 50 day moving average, on both the Dow, and the $SPX.  We've seen this target taken out more than once since the Feb crash, and it didn't well for the bulls. Try not to under-estimate the potential downside, when that level breaks again.

 Here's the DOW (below) taking out the target I laid out last week. See the breakout above the red line? I predicted that! No wonder the Hedge Funds don't like my charts!

 I even predicted the bears would sell the blue line on the next chart, ahead of the breakout, because this is what bears do.... lol

The Russell 2000: Up against resistance. We could see it give all the gains back in a hurry, and I'm seeing the same scenario in the majors.  Lowe recent lows, in a powerful wave "C".


$SOX looks like it's in the middle of a Wave E (zigzag). Target looks like 1150

Tech has filled a gap, and traded into a bearish H&S pattern.

 Oil looks like a capitulation top, after trading into an extended wave "5" triangle.

Nothing to like about this market.

The risk is to the downside, especially with the $VIX oversold.


Thursday, February 15, 2018

Stock Market Technical Analysis Update 2/15/2018

"The Elliott wave principle is a form of technical analysis that finance traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology."

Over the past week we've seen seen market sentiment turn from extremely bearish, to bullish, as you would expect, but this is no time to become complacent.

Broader Market - S&P 500 $SPX

Yesterday morning we saw a sharp little pullback - at the open - followed by a continuing rally into an extended wave 5, which confirms exactly what I was seeing in the charts on Tuesday. See the annotations on the chart below.

Wednesday I was preoccupied. tracking a 2.6% rally in oil, so I wasn't able to confirm that the breakout in equities, is indeed wave 5, until taking a closer look at the charts this morning.

Of course, momentum slows in wave 5, but you can expect the market to continue to melt up into Options Expiration Friday, where most bearish traders (short sellers) will ultimately capitulate. Markets could even hold up into next week, but this depends largely on when the final target is taken out. What you're really looking for here, is for bullish sentiment to peak out. Bullish traders know this, so you can expect them to continue hammering the market higher.

At this point, I'm quite sure, this is only the first leg up in an extended bearish consolidation pattern, and the second leg up will be even more powerful than the first. Certain indices could ultimately even break out to new all time highs, but that remains to be seen. If my analysis if correct, and so far I'm 5 for 5 - including yesterday's snap-back rally in Oil - since the market bottom was put in - I suspect the next leg up will coincide with the end of the first quarter (window dressing season), and possibly even extend into April, where volatility typically picks up again. As of today volatility remains relatively high, and this presents a great trading environment.

Future targets are proprietary, but make a $1000 donation to this website, and I'll be happy to accommodate you for the next 30 day.  Communications can be made through twitter messaging, LinkedIn, email, or even by phone.

Have a great day,


Tuesday, February 13, 2018

February Stock Market Pullback 2018 - Advanced Trading Techniques

February Stock Market Pullback 2018  - Advanced Trading Techniques

After doing this for many years, I've learned to rely on a variety of indicators, and charts, to determine market direction; market sentiment (charts), Fibonacci ratios, tracking separate sectors, heavily weighted stocks, cyclical stocks, and even foreign markets, to name a few. It requires a tremendous amount of due diligence to keep track of it all, and thinking outside the box. If this were not so, then anyone could do it, consistently.

Not to sound arrogant, but my level of expertise, and the multi faceted system I've created, goes beyond most peoples comprehension. It would take a book to even scratch the surface... but I can offer you a glimpse into what I do, and how I do it, by explaining what I'm seeing in the chart below, and consider the weight this chart gives, to the bottom I recently called in US markets. Think of it a preponderance of the evidence. If the German market took out the target, as expected, then that says a lot. It's a tell. It means the route in global equities has come to a halt. If the Elliott Wave Theory agrees, and the (lower) $VIX level agrees, and foreign markets agree, and sentiment has changed, and the rest of it, then we're not guessing where the bottom is, we're confirming it.

You're looking at the 3 year German $DAX:

1. The most obvious thing this chart should tell you is that the index continues to channel up in a bull market. The trend remains intact. I touched on this point in a recent blog at You gotta know how to read long term charts, short term charts, how to read the $VIX. You must me able to accurately chart several different timelines, organize them in folders, and archive your charts, so you know where to look, when the short term charts are a mess. To give you some idea... 99% of my charts are still intact. 

2. The previous rally (into the recent new high) confirms Elliott Wave "B", as I pointed to in several US markets, including the $SOX, over the weekend. A "head-fake" rally in wave "B", is always followed by a powerful wave C. In order to know this, you'd have to have a good grasp of Elliott Wave Theory, something I've been studying for years. It's not a magic bullet, but I rely pretty heavily on it, because it works.

3. The $DAX pulled back into a key Fibonacci retracement target, where it landed at the bottom of the channel. We're not guessing at the bottom here. It's obvious. May not be so obvious when you're looking at the S&P chart, alone, and this is why I (literally) chart 50 different things.

4. When support breaks, the market is sold, and this is exactly where you also want to be a seller. When the action fell out of the triangle (marked wave "B"), and took out the October 2017 high broke, investors rushed to the exits. Once support at 12,950 broke, selling accelerated. This is where you sell, not guessing at where the top might be. Laying out support levels is simple for most seasoned technician, but selling them - when they break - comes down to knowing how to trade. I don't spend enough time talking about trading, because I don't do a lot of trading. I predict future market direction, which more often than not, only requires following the trend, and identifying support and resistance. I can offer you key levels, but trading those levels is a different ballgame.

5. This is how a powerful wave C looks. If it's a primary wave (C), it can turn into a crash. But this isn't how reversals into a bear market ever begin. If this was an extended market crash, then this would have to be the 1st wave/ leg down - wave 1, (or possibly wave A), and wave 1's (in a bear market) don't look like a crash, or act like a crash. Wave 1 looks like a pullback, which is inevitably bought. This is basic Elliott Wave Rules and Guidelines stuff. Each wave leaves it's own signature. Nobody suspects a crash in wave 1! It's not until wave 3, that investors become aware that the trend has changed. Similar to what we saw in 2007. Everyone bought the dip, and didn't realize the trend had already changed, and many were left chasing a suckers rally.Still today, you hear folks referring to "the crash of '08", when it actually started in '07.

To conclude, and make things clear, this looks like a simple A-B-C correction, on the $DAX, and that confirms the reversal in global markets, and we're only getting stated, as markets continue to build a base, at support. If support breaks then you can start calling this a crash. Maybe this turns into part of a larger corrective pattern, down the road at some point, but let tomorrow worry about itself.


Market Update 1/12/2018 - The Idiots Guide to Calling Technical Market Bottoms

Where to begin?

It's been an incredibly exciting 2 weeks, since the last time I updated this blog, but there's just no time to create lengthy blogs, with the $VIX trading above 20. Things move fast, above $VIX 20.

Firstly: While most folks were worried about a market crash, which has still yet to materialize, and probably won't, because there is no crash, other than in Oil, perhaps... BitCoin rallied 25% off the lows, after calling this market bottom.

$BitCoin - Before...

$BitCoin - After...

Wall Street is a shell game. Bloomberg pundits - who have their own best interest at heart - first scare you out of the BitCoin trade (reporting: "it could be headed to $1000"), and then then run it up, while taking the broader market down. Always watch what the other - hidden - hand is doing.

Picking up where we left off in the previous blog. We saw the market still trending up on a 60 min. Chart. Well that chart broke, soon after... and that was your cue to sell. When the trend is no longer your friend, you're only left with hope, and fear, and we've seen plenty of that lately.

Once the trend broke we traded rather flat for 2 days, but just before the close on Tuesday Feb. 1st, I was seeing "red flags". I thought we might see another bounce, before a crash, but that didn't happen.
 I had been warning folks to hedge themselves, with some "short ($STOXX600) contracts", for some time, and those who took my advise, saved themselves plenty.

Another clue that the shit was hitting the fan, was the breakout on the $VIX, which had been trapped in a range - consolidating in a bullish down-turned wedge for nearly 2 years! I believe this proves I was right all along; "the market is rigged". The powers that be, had been shorting the $VIX in order to press the market higher, and higher, and higher still, until it finally collapsed. The $VIX short sellers got squeezed, with the $VIX rising 100% on Monday. There is no other explanation.... What's also clear to me, is that they were using the leveraged $VIX funds, to hammer the $VIX down. Result was a massive short squeeze in the $VIX. I've always warned traders not to trade the $VIX, for this reason (it's simply too volatile). Hopefully they learned their lesson, and we'll see less manipulation in the future. Wishful thinking..! 

I know I called it a crash earlier, but there really is no crash. I heard that Jim Cramer called this a "flash-crash, and the destroy Trump media would like it to be a crash, but as someone who anticipated the so called flash-crash, and caught the massive rebound, and sold it, and continues to sell the broader market into an eventual retest of the lows, which didn't occur until a couple months later (around July 1st).... That trade was my ultimately my "claim to fame", so I can tell you from experience, this was no flash crash. This was a washout, as traders panicked - with the Dow down 1600 - but it really doesn't amount to much at DOW 26,000. This plunge only ranked 99th percentage wise, while the Flash Crash shed 998.5 points (about 9%), in only 35 minutes. It's not even in the same ballpark....

Of course no-one could anticipated a one day drop like the one we saw (on Monday). It was "ridiculous", as I tweeted at the time, and we caught a nice 1000 point rally, the very next day. Looked like it was trading into a wave 4 at that point, so we took profits, and watched the market give it all back. 

Calling the ultimate bottom took me at least couple tries to nail down precisely. Ultimately the market traded into an extended wave 5 (triangle), where momentum slowed, and I called the bottom, as well as the subsequent breakout, in real time. This coincided with the $VIX falling below support around the 38 level. There was plenty more reason for the market to make a major bottom right there, but I've already given you everything you need to know, in order to recognize a tradable market bottom


This was pretty much like calling any other market bottom, and it reminded me of 2008, because of the high volatility. I have 10% more experience now, then I did back then, but it was a good refresher course.

I also pinned down the bottom in the US Oil Fund $USO about the same. The oil chart scares me, because it's still in a down-turned (bearish) channel, and is it's going to continue to fall into a wave 3, that will look like a crash. If oil breaks out of it's death spiral, fine, but the risk reward is not good for the oil bulls.

Another call, I'm proud of - but has nothing to do with calling market bottoms -  was to advise my clients to give up, and "get out", of  $REITs. It can be hard to be bullish one day, and bearish the next, but when the charts break, it's time to sell. If you were lucky enough to get out on this bounce, congratulations!

 Of course, the worry warts, are still asking themselves, "is this the market bottom", and struggling with charts, which ain't worth a lick.

Look, We've  been enjoying the rally of the past 2 day's, before selling into yesterday's close, and looking to shake the weak hands - at support -  before we're off to the races again, but this blog is about calling market bottoms, and looking back in our rear-view....  

I'm no longer providing many real-time market updates on twitter. Too many trolls, and too few donations to this blog. I feel that I'm ready to move on to bigger and better things. It was a good run, but I need better exposure....

Of course, in the meantime, I'll continue to provide charts to the folks who continue to make regular donations to this blog.

If you'd like to connect on LinkedIn, that's where you'll find me, doing what I do best.


Wednesday, January 31, 2018

Market Update 1/31/2018 - Advanced Trading Techniques

We're still looking for a major top, but Friday was not it. I could go deeply into it, and have several toppy looking charts I could share, and a lot of charting to get caught up on, but that wasn't my prediction last Friday, and my outlook has not changed. Maybe this is the beginning of a correction, but probably not.    

Reviewing the recent market action, and the technical charts: 

The pullback -

Being the contrarian I am, I suggested traders sell into strength on "Short Covering Friday", even though selling on a Friday is usually a bad idea, because money is typically put to work on Mutual Fund Monday. Countless times, I've seen traders get short on a Friday, only to see the market continue to rally higher on Monday, but this was one of those rare times where I didn't "see much upside risk" in selling into the weekend. All I can say is, "how do you like me now"?!!

There's a good chance I may have gotten this one wrong, and I can show you (on the chart) exactly why most traders did get it wrong, using the NASDAQ chart (below).

1. They believed the trend - in blue - was their friend.
The biggest reason most traders (who happen to be perma-bulls) got it wrong, is because they trusted the trend on a very short term chart. I'll explain more about this bellow.

2. Sentiment. These bulls weren't looking for a pullback. They were on a sugar high, and even if you had shown them the chart below, their judgment is hopelessly clouded.

3. Most traders don't know chart patterns. First we have to go back to the action on the 25th, to recognize the pattern developing, because that pullback doesn't look like a normal pullback into a wave 2. 

While most traders were watching a simple channel, the market breaking out to new highs, and expecting another breakout on Monday, I was watching what looked like a broadening triangle pattern develop, and what looked like a head-fake rally to a slightly higher highs, and unless you're familiar with certain patterns you're not going to see this coming.

So, after identifying the chart pattern, and selling into Friday's close, and remaining bearish into the predictable dead cat bounce we saw on Monday, the broader market plunged 400 DOW points (roughly 1.4%) on technical Tuesday. There's a reason they call is technical Tuesday, and some pro traders even came on CNBC, very early Tuesday morning, to brag about what they had done, after already taking futures down...   

This was a little bear-raid, build on the back of some (end of the month) profit taking. That's all.

The short term charts are a mess, and this is where the longer term (60 min) chart view comes into play. If you don't chart every timeline, as I do, then you're not going to have a clue, when the short term chart breaks. Too many traders are short sighted, and miss the big moves, because they're only focused on the very short term. Those people are still the dark.

In order to see the big picture you need big charts, and the more volatility increases, the more this comes into play. Back in '08 during the height of the crash, we had to turn to daily candlestick, and even weekly charts to find the trend, and missing a 10% point move,  or ending up on the wrong side of a 10 - 15% move in either direction, became the new normal. Once the $VIX got above 30, it was not uncommon to see 1200 point short squeezes, followed by 3000 point declines, the next day. This is the environment in which I learned to trade. Once volatility came down, the short term charts started working again, but it took some time before I become proficient in charting a bull market, on 15 min charts, let alone 3 min. charts. If you had told me years ago, that I'd be relying on 1 min chart views... I would've laughed in your face.      


Friday, January 26, 2018

Best Trade Of The Year! Market Update 1/26/2018

Best Trade Of The Year:

The market continues to rally into the end of January, as I predicted in the previous update, but I wouldn't call that the best trade of the year. Best call of the year? Maybe... 

Second to calling the recent top in BitCoin, the best trade of the year - drum roll please - is

And without further ado - yesterday's reversal in the $GBP, and the $USD! And even if you don't trade currencies (and I can start a sentence with the word "and", because this is my blog) there is a lot to be gained by reviewing the most recent market action in the GBP/ DXY ($USD). After all, all markets respond the same way. Certain markets, or trading vehicles (levered/ futures/ options/ currency trading) may provide more risk, or more volatility, than others, but they all trade the same way. The charts work; no matter the market! Those who claim technicals don't perform, or predict markets, aren't watching the right technical indicators. More likely, they're basing their technical analysis on their own personal bias (emotion), or following others, who do the same. This is the main reason most traders lose money consistently.    

Here's the inside scoop: I confirmed with one of my trusted trading buddies, yesterday morning, that the #DXY was a buy. I should say we both confirmed it individually, and in my mind, that confirmed that what I was seeing in my charts, was correct. This is a pretty rare occurrence, as I tend to be the contrarian. I chart in a vacuum, and view most of what I see on twitter, as a contrarian indicator... but we had already confirmed the reversal on the British Pound earlier in the week, and were tracking the bearish trend in the $GBP, after calling that top. If you've been following me on Twitter, you should know I'm talking about.

The catalyst for the $GBP currency trade was President Trump's statement - from Davos - that, "the US Dollar is going higher", and once again the charts predicted the future.

That may sound hokey, but this happens on a regular basis, and you'll often see the news confirm a reversal. I suppose certain news is manufactured, in order to move markets, but more often than not, the news will confirm the trade. For example: You may see a market trying to build a base, or perhaps you're seeing a washout to an oversold condition, and the market looks like it's ready to build a base, and next thing you know, breaking news (good or bad) provides the catalyst for short covering.

To document:

1. The top on Bitcoin - which we saw coming a mile away. The larger pattern is a megaphone top, with a little throw-over beyond the top of the triangle - typical. This chart from Dec. show me already looking for the top, using candlestick analysis. I even provided the stop hunt, showing were Bitcoin would break, and it did, just like I said it would. Some negative Nancys' would say I was early, and wrong, but waiting 1 month for a major reversal is nothing. Maybe this was the best trade of 2018 after all, but I think few were equipped to trade it. Now every "Johnny Come Lately" wants to short it, of course.

2. The topping pattern on the $GBP - looks familiar.. like the action on the Dow. 

3. The bearish trend which was confirmed on the $GBP, yesterday, and the subsequent snap-back rally, which turned out to be a good swing trade. This is what great - real time - trading looking like!

I put a lot of charts out there, but folks see what they want to see... For example I provided my short term bullish outlook earlier in the month, and even provide the $VIX chart on a regular basis, and this has kept us on the right side of the trade, but it seems like all that gets retweeted is the occasional bearish tweet, or a call for a possible pullback, and most these folks - who frankly just don't get it - don't even speak English. Maybe these contrarians are being drawn from my public stock charts page, which is entitled "Charts of Doom", and which I haven't updated in months - by the way - but then they ignore my short term outlook, the $VIX and the 1000 charts I publish on twitter every month. 

Ignore the contrarians. Mute them, and if that doesn't work, block them as I do.

As far as the broader market - you hear a lot of people calling it overbought, but I'd only call it a little over heated, and a bit overly bullish. Some would say it's "too hot to touch". You've heard Jim Cramer make this ridiculous assertion, because he's guessing. The momentum scared him. Traders don't guess, we follow the trend, we trust trustworthy indicators, and we like momentum, and none of my indicators are flashing "overbought". As long as traders are focused on the short term charts, and as long as those charts continue to work, and the $VIX says fear is contained, then the market is not too hot to touch. I would stay nimble as always, and if you feel that you have to remain fully invested, then I would also be hedged. My favorite hedge at the moment is short the $STOXX600 

Very short term the $SPX is trading (consolidating) in a tight range, with a good possibility of another breakout, and my short term outlook - provided in the previous blog - still stands.

The stock to watch is $AAPL - as a breakout back above the 175 level will bring buyers in.


Thursday, January 11, 2018

Market Update 1/11/2018 - The Market Top

Got a nice little pullback on Wed, after identifying the top on on the NASDAQ on Wednesday.

Those who were watching my Twitter feed, know I called the market top in real time, and watched it break down going into Wednesdays close. Not an easy call!

And here are tweets to Document that "Market Top":

The only reason I timed this reversal, is because I happened to be watching the NASDAQ (15 min chart). If I was only watching the #SPX, & the DOW, I don't know that it would've been so easy... 

"Stall" is an aeronautic term I remember from flight training. A plane in a steep climb can "stall" out in the same way, if there isn't enough momentum to overcome gravity.

This is what the pullback looked like at yesterday's close. Simple A-B-C correction.

And after yesterday's bullish close it look like we're off to the races again.

Maybe we get another pullback into the close - setting another bear-trap for Friday - but I wouldn't count on it.

Yesterday's bullish SPX chart:

The fake financial news at Bloomberg was trying to say the Japanese bond market was to blame for the pullback, and CNBC is blaming Canada, and China... but this is how they make their money, manufacturing stories. I make my money being right. 

Of course I haven't been right on everything:
I saw the pullback in Silver coming, and the recent top in Nat gas, but oil? 

Oil continues to rally higher...

$WTI crude target raised to $65. I'm expecting Oil to reverse, within weeks, and this may be the catalyst for a big market correction, since many folks are heavily leveraged in their oil trades, and "the baby is thrown out with the bath water", when margin calls start coming in. Forced selling...

This is how I would trade the top in Oil. Sell the target, and then add when the stop-hunt is taken out, and then sit back and enjoy the show... it's going to take plenty of time for these oil trades to unwind.

There's a possibility oil consolidates into a bullish wave 4 (of C of (Y), and before a retest of the top of the channel, later in the year, or maybe it trades into a little topping pattern, but we'll worry about that road when we cross it. Even if wave C doesn't complete on the first test... wave A of 4 is a good trade.

That's all the time I have this morning. It's 50 degrees in Chicago, and I'm going to take advantage of the weather, and install a pass-thought on an exterior wall, so I have easy access, for generator cords, and propane hoses, just in case the SHTF in the middle of winter. We've already seen power outages on the East coast, and another ice storm coming, and the Las Vegas technology even experienced a black out.... Don't be caught in the dark!

I'll be away from my desk most the morning...
Take care,

Thursday, January 4, 2018

Market Update 1/4/2018

Yesterday, I touched on a lot of technical stuff, and how to confirm a sentiment change (by using the fake news as a contrarian indicator), as well as how to let the trade work, once you confirm a major reversal. Even the most seasoned veteran traders should find that interesting, and I suggest you bookmark it for future reference.

Today we're going to take a close look at:

1. The SPX 2. The rigged $VIX 3. Market complacency, and sentiment, indicators (very important).  

Looking at the SPX - I'm not sure if sub-minuette wave (((iv))) (marked iv) completed yesterday (Wednesday), or not, but I'm seeing futures up this morning.

SPX - Target at the top of the smaller pattern looks like 2717. Short term support 2710. This rally is beginning to look very tired, and I remain bearish. 

$VIX looks like it's trying to build a base around $9 (8.85) again, although we could see 8.60 by the weekend - on a capitulation Friday.

$VIX chart:

The monthly $VIX chart below shows how the powers that be are able to rig the market by hammering this fear gauge down every month, or is this simply complacency on a grande scale, with the $VIX currently trading below the 2006 - 2007 lows. Either way, a day of reckoning is coming - I believe - some time in 2018. That vague of a timeline is going to upset some bears, but until fear returns to markets, you got nothing. Be patient, the bears will have their day, soon enough.

Regardless of the short term $VIX targets (above) we could see $VIX 7.85 by summer, and key $VIX resistance is a pathetic 10.95 (the 50 week ma on the VIX). I'm holding that long term $VIX chart close to my chest, but I can assure you, that is the number to watch!

You're probably asking what does this all mean? It means complacent, overbought, markets, tend to stay that way for quite a long time, and roll over very slowly. I also means that until the $VIX breaks out above that magic number, the bears are going to remain frustrated...

Market sentiment is off the chart!

Firstly - There are only a few sentiment indicators I trust, and the $BPSPX is one of them. I don't need a chart to tell you it's in my red zone (above) 80. Hasn't been this high since 2014. May press a couple points higher still, but this is a big red flag, that points to way too much bullishness.     

You've seen people I follow, or who follow me (on twitter), talking about how, "sentiment was off the chart", months ago, and me shooting holes in their narrative... because most folks are using lousy indicators, or using someone Else's lousy indicators, and haven't a clue, what the hell they're talking about, most the time. This is what you find on the information freeway, a lot of road kill. That is to say, most investors would rather hear what their itching ears want to hear, rather than do their own home work. It irritates me to see disinformation, re-tweeted, even once! 
One final note on sentiment extremes: Once everyone is fully invested, there's only one thing to do, and that's take profits. In other words, once everyone it bullish, there are no more buyers. Same thing goes for bearish sentiment, like we saw in 2008. Everyone (speaking of herd mentality) is wrong, most the time. The good news is once you're able to recognize extremes in sentiment, it helps you identify the capitulation points, that coincide with major reversals.

Other trades to look at:

$Oil - very bearish

Keep selling the top of the channel in Oil, until you hit pay-dirt, and I'm talking like 7 - 10% on your short bet. Support on the WTI is $55.

Sell Emerging markets:

 Continue to sell the top of the pattern on the $RUT, as long as it's continues to struggle... This doesn't point to a "risk off" market! If the Russell happens to open above the 1555 level, that's going to become your stop hunt. I'll update this chart on my twitter @3Xtraders

If you have a higher risk tolerance, continue to sell silver, and or NatGas.

And one more thing about the rigged markets: There's a ton of money sitting on the sidelines. See the money flow out, while this thinly traded market was rigged higher, on the chart below. Once we see a correction; "beware the short squeeze".

 Take care, Traders



Wednesday, January 3, 2018

The Bottom In Natural Gas - Market Update 1/3/2018 - advanced charting, and trading, techniques

 Tweet from Dec 12th, 2017, where I called for a final shakeout (bottom) in Nat Gas - Elliott Wave Chart included.

 This isn't the first time I've been right on NatGas; I remember calling the bearish reversal years ago, and I've remained bearish ever since, but this seemed way too easy. Typically you'll be early, or wrong, several times before finding a tradable bottom in something as volatile as Natural Gas, and getting it wrong a couple times, doesn't make you a bad technician. It's just part of the process of finding a tradable bottom.... Most technician are early, and that's because sentiment takes time to reach an extreme, and most traders don't have the patients to wait for the "final washout", or worse, they turn bearish when they finally see it. I made this mistake in 2008, even after calling the bottom target on the $SPX, I was unable to get bullish enough, stay bullish, once the market reversed, into one of the most massive short squeezes in history. This is where the rubber meets the road, because even after charting it correctly, and making an accurate prediction, you need to be able to trade it correctly, and that requires a tottally different skill set... but now I'm getting way off topic. 

My mantra is "Chart Everything", so you don't miss a thing, but that also means charting several timelines - long term, short term, intermediate term - and analyzing those charts with an unbiased view. Some times I'll even create 2 separate folders - per sector - to compare the bullish view to the bearish view, when charts conflict with each-other, as they often do. For example I'll label one set of charts, "Bullsh Dow", and the other "Bearish Dow". This is a tall order, and something I've written little about, because I know it's confusing to most people, but this is one of the best things you can do to help you become a better annalist. Comparing the $VIX action to the market action is another... Just yesterday, I saw a possible outcome in the charts I didn't like, and had to check the $VIX chart in order to confirm the bullish trade. I was afraid we may see another washout like the one we saw going into Friday's close, but that was quickly ruled out because of the weak $VIX. I could've devoted this entire blog to what the weak $VIX means, because it doesn't always mean the same thing, but like I said, this is confusing for most people. Most people decide they like a trade, before they chart it, or they don't even bother to chart, and this is called "gambling", or "guessing...", and that doesn't work out too well for most traders.      

 Getting back on point

Major reversals tend to happen when few expect it, so it's important to continue to watch unloved sectors, and keep your charts up to date. While everyone else was hooked on Oil, I was eyeing Natural Gas, and Silver. The bottom in Silver/ and Gold, was also not that difficult to find, but I didn't get bullish enough at the reversal. At least I haven't fought the trend all the way up, but there are lessons to be learned from all this, and there's always room for improvement. That challenge is what peaks my interest, rather than become bored with it all.

This rally in Nat Gas was not about "Frozen America", as you see every fake (manufactured) news outlet reporting, or even supply and demand.... It's about looking for a trade that's going to work on light holiday volume, and realizing short positions take time to unwind - weeks in most cases. Keep that in mind the next time you find a market reversal, and you'll have a better chance sticking with the trade that's working. I'll be revealing more advances charting, and trading, techniques in my upcoming book, but now let's get back to the charts....   

The rally in NatGas looks like it stalled out yesterday, and it's no surprise, since the fake Financial News is just now reporting "Natural Gas up 17%". That Bloomberg headline is the kiss of death for this rally, because it marks a sentiment change, and everyone who missed this big move in NatGas is about to start buying the dips - all the way down.

If you were following my twitter yesterday, you watched me block one of these fools... trying to tell me that there's demand.... Look, opinions are like a-holes, and especially when the charts are working. Where was this know-it-all - chiming in on my twitter feed - when I was calling for a rally? Now he's blocked... and placed in the contrarian camp. Yeah, I can be harsh sometimes, but this is for the good of the entire community.

If you follow my twitter you saw the updated NatGas, and $UNG, charts - looks like wave A in a snap-back rally, or was that silver? One thing is for sure, I'm watching too many sectors right now, and now I'm more interesting in catching a bigger reversal in Oil.

$WTI crude has traded into a key Fibonacci target, and the top of bearish parallel channel.

 If you're still hooked on NatGas, there's resistance right here (at yesterday's high), and again at 3.25. If it can breakout above there, I think it could go as high as 3.85, with 6.48 being key resistance on the $UNG. 

The UNG isn't as accurate of a chart, as the pure NatGas charts, but both are showing a breakout above the 50 day ma, ending with that looks like a bearish Hanging Man (possible reversal candle). The 50 day is the level to watch....

The market is poised to rally higher, after yesterday's little pullback. Seems like these happen late in the afternoon, when I'm not watching.

Watch for the $RUT to lead this time... as the market continues to be pumped, one sector at a time.

 Take Care, and have a healthy, happy, and profitable New Year!


Tuesday, January 2, 2018

Market Wrap Up 2017 - Outlook for 2018

2017 was no doubt a great year for investors, and very predictable for traders. Stocks rallied into the end of the year as expected, and I expect this rally to continue into early 2018, as money managers return from holiday, and are forced to chase performance. 

And what a great way to end the year, on a little panic wave "e", to complete wave 4 consolidation, as seen on the chart below. 

Market seen selling off into Friday's close; as predicted, earlier in the week. I didn't even have to update the chart this morning.

Here's what it looked like on the SPX - on a 1 min chart:

Next comes wave 5, and that should wrap up by the end of the month, I think. From there, I'd expect to see some profit taking, ahead of earnings season, followed by another rally on "better than expected earnings", and a dovish (new) Fed (chair)... The soonest I see a major correction is March, but now we're getting ahead of ourselves.

I'm not too keen on chasing the broader market rally into Wave 5, ahead of a reversal, and I'm already looking to commodities for some better trades in 2018, in Energy, Oil, NatGas, Gold, and even Silver.  Of course trading commodities, carries with it, greater risk, and you should decide - ahead of time - if you can tolerate that or not. 10% moves are not uncommon, and if you're leveraged, you can get into serious trouble, in a hurry...  One way to lower your risk would be trading in and out of the $SLV (silver fund), or $GLD, buying and selling the $UNG (NatGas fund), or $USO, rather than trading leveraged funds, or contracts.

Of course if you like leverage as much as I do, you'll probably be trading $NUGT, and $DUST, and such.
I don't like miners here, based on the candle-stick analysis alone, so try jumping into $DUST first thing this morning - after the open.

$GLD is also coming up against resistance (@ $124.76 - 126.25), but typically the miners lead the way. 

Don't like Oil up here:
 $Brent - trading at the top of the channel.

 Looks like we're seen on the bottom on NATGAS, after a years worth of consolidation, but it's hard to get on board right here.

 You see lots of bearish money managers coming on the financial new networks, talking about a "correction in 2018". That's bullish a contrarian indicator. Make them chase this market!

Happy New Year!