Tuesday, February 23, 2021

Market Update 2/23/21 - mixed markets

 If you missed the last update, you should review it, just to get caught up to speed. 

Yesterday (Monday) we saw tech and the NASDAQ sold, while energy stocks were driven up around 3%. 

This morning we see the $XOP pinned above support. Think it could test the 85 level, but I remain bearish Energy. 


Oil service stocks continue to trade into a broadening top pattern, and I see the highs being tested 1 more time, before this pattern completes. 



The NASDAQ was taken down below the 50 day moving average, which is significant, but we're seeing the same pattern... as on the above energy chart. I suspect we see the price action craw back into the upper channel, or gap back above the 50 ma, which would trigger program buying. 



$SPX - same expanding ascending triangle pattern - support 3740, res. 3885. 


Another this that's significant is that the $VIX was hammered below the 200 day ma, and if you follow my linked in alerts, you know real res. is 25 (at my red line). There's also a possible gap fill target on the $VIX around 28. 

There's a possibility this is just the beginning of a larger correction, but selling season isn't until May, and we're not really seeing a risk off situation. Even the $RUT is poised to bounce back here, after testing key support. 



That's about all I got, for now. 

Take Care, AA





Friday, February 19, 2021

Market Update Friday Feb. 19th, 2021 - the Mother of all Suckers Rallies?

 I haven't blogged an update for nearly a year, and not spending countless hours on twitter, like I used to.  I took some time off, knowing the market wasn't going to sell off, anytime soon, and patterns take time to develop, and the news cycle had become so disturbing - ahead of the election, I had to turn it off, and walk away.   

It's good to walk away from the charts for a while, and observe. It's kind of like when you put a musical instrument down, and then come back to it. It gives a fresh perspective, and new ideas. 

One thing I've discovered over the past year, is that the computers have really taken over, and more often than not moving averages are working. 

Using the DOW chart as a good example of moving averages driving the market: 



Using the $SPX as an example of this - you can see where the 50 day ma was most recently bought, after it was walked down to that level going into the 1st trading day of this month. Easiest trade in the world, if you know what to look for.  

Certain hot sectors - for instance the Russell 2000 - continue to hold above the 15-20 day. 

$IWM - Russell ETF - this may not be the best example, because ETF's can track a little differently, than the underlying index, but you can be sure the $RUT is being bought above the 20 day ma. 



$SOX - same thing - this bull run obviously isn't over, but don't become complacent, as selling season approaches.   

That's not to say you should own stocks up here.

Looking at the big picture - The NASDAQ and tech in general has already overshot... and is overbought. 

NASDAQ - trading above the top of the channel. This could hold up for a few more months, before breaking support, so don't hold your breath... 


Where I see immediate risk is in the commodities markets, and in oil and energy. 

And of course the IMF came out this morning, to give the green light to Joe Biden's proposed $1.9t stimulus plan. Stating that it poses little risk of spurring inflation. Now, you may ask yourself, "why is the IMF supporting leftist socialism?, and that's a good question.  

Funny, the fake financial news has been pushing the story of a "super cycle in commodities, all week, and that can only mean one thing. The powers that be - who control every news outlet - are already selling this, "mother of all suckers rallies."   

Remember when they recently reported that retail reddit traders were going to drive up Silver? Never trust the fake news.

 $SLV 



$GTX -  is the SPX commodities index - is testing the 200 week ma. It's at clear LT resistance.  


$CRB - resembles a counter-trend (suckers) rally - A - B - C. Again, see where the 200 day ma was bought! I could blog all day, on this topic, but I gotta wrap this up. 

As far as timing for a market sell-off: I'd be watching the $VIX 18.50 level (the 200 week ma). We're bound to see money come in below $VIX 20, but then if the $VIX bounces out of the hole, and gets back above 20, that would be a clear risk off trade. It's possible commodities lead the way down, and my upside target for $WTI crude is around $65. 

$WTI crude - 12 yr bear market and counting, and a globalist plot to do away with fossil fuels?  


I could go on for several more hours, but this should carry the day, and possibly even the next few weeks. 


Take Care, AA 


 


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