Month: June 2022

swingtrading
Analysis

A Dull Day on the Markets

Friday was a day much like other days this week, with the stock market moving higher and many individual stocks acting very well. Something happened around 1:30 however and changed things greatly – an approximate 65 point drop in the Nasdaq in about an hour followed by a thirty point rally back up in the final hour is not something you see everyday. Supposedly this drop had to do with the situation in Ukraine and actions taken by Russia. Whatever it was, a lot of individual stocks were hit (at least temporarily) and look a lot uglier than they did the night before. Ever since February 5, the market has been grinding along with very little rest but since it continues to hold its short-term nine day exponential moving average, it is hard to get very bearish here. Since Friday’s sell-off seemed news-driven, it is even more difficult to put a lot of importance in it. However, if Friday’s lows are broken on Monday or Tuesday, then traders should reassess their outlook and give more credence to that sell-off Friday […]

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bull stocks
Charts

Identifying Bullish Stocks – Chart Set Ups for Bulls

Identifying a bullish stock chart involves identifying its key characteristics. Stocks that have a rocket-like trajectory should be avoided because they rarely last longer than a couple of weeks and are inevitably followed by a sharp decline. Bullish stock charts generally show a consistent price trend from the lower left to upper right. Large advances will be peppered with consolidations that work off of extreme overbought conditions. Instead of a rocket, these charts look more like an upward mountain slope. Bull flags form when a stock reaches a high point, breaks through its lower low and then rises again. A bull flag occurs when the stock exceeds the highest high point, which forces shorts to cover and buyers to get off the fence. Once a bull flag forms, the stock starts to rise and forms an uptrend. Similarly, a bear flag is an indicator that a stock is headed for a downward trend. Candlesticks show a day’s worth of price data. Each candlestick shows an opening price, a closing price, a high and a low. The “body” of a candlestick […]

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Stocks

Gold Stocks and When The Trend is Ripe for Trading

For years, gold stocks have been seen as safe havens, especially in uncertain times. By buying gold stocks, many investors have gained exposure to the coveted metal. Companies in this sector include Newmont Corp., Franco-Nevada Corp., and Newcrest Mining Ltd. Although gold prices have slowed considerably in recent years, many investors still believe that gold is undervalued. Many hold shares in companies. Barrick Gold is one of the world’s largest gold producers, with mine operations in both north and south America. With a market cap of $41 billion, Barrick Gold stocks have gained 20% year-to-date. The company has a track record, delivering production in line with guidance for the last three years. Despite challenges including the COVID-19 law and inflation, Barrick has managed to maintain its operating performance. In addition to mining gold, the company also maintains an extensive exploration portfolio. Investing in gold stocks requires careful analysis. It’s important to evaluate each company’s financial performance. Does the company pay dividends? Does it have high cash costs? Do they offer attractive dividend yields? Do their balance sheets reflect the health […]

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Charts

Charts for Index Trading – The Tool For The Pro’s

A stock index chart is an important tool in a trader’s arsenal. This visual display of historical trends of the US market indexes provides a clear picture of where prices are headed. The charts are updated each Friday evening and are available to members. PRO members have access to complete versions of these charts. Non-PRO members can view data from 1980 until today. Traders can also view historical trendlines to identify support and resistance. The Dow Jones Industrial Average closed below the rising 50-day EMA and has since dropped to a test of the 200-day EMA. It has not reclaimed this support, however, because bearish daily technical indicators are signaling that the support level is not going to hold. The MACD has crossed above its signal line, but remains in negative territory. The RSI has also failed to cross its 50-day EMA and is headed downward. Similarly, slow stochastic has crossed its 50% level into bullish territory, and a break of this resistance level is a good sign of further decline in the index. The DJIA represents nearly one-fourth of […]

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Analysis

Setups and Outlook – A Very “Iffy” Market

If you look at the charts of just the Nasdaq and S&P, you probably wouldn’t be too worried about the overall market as both continue to ride their nine day EMAs higher. If you look closer, however, you can see some divergences with price and moneystream that is a bit worrisome. If the nine day EMA does break at some point this week (it’s held the ENTIRE YEAR so far for the Nasdaq), I think there is a very good chance of seeing a sharp, quick move lower of 2-4%. Hopefully, the market could right itself from there but it is probably not something you want to sit through if you have a lot of long positions. On the other hand, if you look at the chart of the Russell 2000, you probably would be worried. This chart has been lagging for about a month now, both in not being able to challenge 2011 highs like the Nasdaq and S&P did and also moving sideways while the other two indices ground their way higher. Breath has deteriorated as well over […]

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Charts

Hard To Argue About the Strength of This Market

After a massive run-up going into this morning’s job number, the market was certainly set up for a selloff, and when the number came out (which was AWFUL), we certainly got a selloff…sort of. The market started the day with a gap, tried to bounce a bit, but then quickly sold off further. That was about it, however, and around 11:15, a bottom was put in for the day and the market rallied strongly from there, finishing well off of its lows. Although the final numbers will show decent sized losses, in my opinion today was a very impressive showing by the bulls. Remember as well that this was in the face of an AWFUL jobs number… I went into the day short two stocks (SOHU and BEXP) and long only one stock. I was stopped out of both shorts by lunchtime and began to go long again in force as I saw setups I liked all over the place. This may be the wrong play as perhaps the market needs to pullback further from here, but given the action […]

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Analysis

So How Bad Was Today?

Well, to answer the title of this post, it was pretty, pretty bad. The Buy/Sell Difference measured by 4% breakouts and breakdowns was -1208 today. Yesterday it was -800. The cumulative difference of the past four sessions is -2311. Looking back over my numbers since late 2007, I could find only two other instances of a day of -800 followed by a day over -1000. Those dates were September 15 and 17, 2008, and a stretch from October 2 to October 8 or so in 2008. Since then, we’ve theoretically have not seen as bad a two-day breadth move as we saw the past two sessions. I think it is safe to assume that the bear market that started right around July 27 has now regained its strength. I’ve been saying for a while that I believed we were indeed in a bear market and that the August lows would eventually be broken, but I’m not going to lie and say I didn’t have my doubts about this idea last week as the bulls kept pushing things higher. The market […]

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