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" [investors.com]

   
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".

$RUT




$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.

AA