ADX
STRONG BULL TREND FOR GBPThis day and yesterday Brits showed great economic results and ADX shows strong bearish trend on dialy chart...
Bearish Head and Shoulders forming on SPYA combination of lukewarm earnings for Q1 and talks of an impending Federal Reserve interest rate hike seem to be slowing down the bullish recovery we've seen in the S&P the past several weeks.
On the technical side, notice the failure to attain a new high. In fact SPY has consistently been unable to break new highs going back to May 2015, when the bear market truly began. Further, note the bearish head and shoulders pattern forming, Heikin Ashi candles with longer wicks to the downside, and somewhat strong resistance from above via the Ichi Moku Cloud.
Recommendations for a short trade: wait for the price to decisively break the neckline with a strong bar. The next fibonacci level serves as a decent profit target at about $200. Note that there is a relative vacuum between the hypothesized entry point and this value, aside from one level of support indicated by the dashed red line. For a stop loss, consider the apex of the right shoulder.
Bullish ADX at HORMEL FOODSHere we have a nice bullish ADX crossing signal at HORMEL FOODS Inc. with a risk reward ration of 2.5
SPDR ADX ShortThere is a nice short ADX crossing here. The most recent low of the uptrend at $21.91 was broken. So this makes the crossing very compelling for me.
Target for this trade is about $19.50 and the stop at $22.51 which gives a nice risk reward ratio of 2.5.
Let's see how the market plays this.
Gold bouncing off 21 day EMAGold has found support on the daily 21 EMA. This combined with bullish medium and long term momentum and the ADX indicating a weakening bear trend leads to a bullish overall outlook.
BTC/USD Major Trend StartingCurrent indication is that the new major trend is up. My suspicion is a lot of people are seeing the very long term dashed blue trendline as a significant support line. This looks reasonable to me as well as it has much more significance than the newly dashed red trendline, which has been breached on Bitstamp.
The ADX is also at a historic low point, which normally signals a large trend forming. It has already turned up signaling the trend is up (and fits with the monthly uptrend continuing), but obviously this can change at any time. Whatever the final direction that occurs, we can rest assured it's likely to be a rather large move.
My suggestion is to act on whatever trading signals you get this month as they are likely to be quite profitable. Also try not to become married to your position as this could be a fakeout for a large downtrend (it should be very clear if this reverses).
Good luck everyone, hopefully we can say good riddance to this range.
Bearish ADX This is a nice opportunity for a short trade based on the ADX crossing. Target for this trade is the support area around $ 1.52 and the stop is at the high of the previous bar at $ 5.81.
It got a very good risk/reward ratio of 2.5.
EURUSD: Buying on uptrend dipsEURUSD: Buying on uptrend dips. Buying at yellow box zone. ADX is above 25, an indication for good uptrend trend. SL is ATR/2 which is 44 pip. Expected price to go up when touched 161.8% fibonacci level.
GBP/USD Short (MACD, ADX signal)The GBP/USD has been fairly bullish recently. With the USD weak last week it gave the neutral GBP some power (as shown) With the USD going back neutral the pair should drop. This is shown both by the ANN strategy and MACD. The ADX is also low indicating a big movement. The resisitance line would be a good time to enter the trade and T1 shows some more resistance. Take out 1/3 of your contracts then so you can afford to lose some if it bounces back up. If T1 is broken there is not much resistance and it should drop quite a bit. Also look for the EMA's to cross. If they do it is more signal to short
USD/CHF Short, DivergenceAs shown, there are 2 things that will push it down. The MACD and the ADX. There is divergence in the MACD, therefore, there is already a ticking bomb to push it down. Also, in a book by Linda Bradford Raschke, we have a 10-bar divergence signal. The ADX is low, meaning that strong movement will be made, and with the MACD showiing lower highs than previous, There should be a strong movement down.
Gold kumoAfter taking a breath to gather strength on the uptrend, price is now sustained by the Ichimoku cloud as well as the 50MA that have been acting as support.
Other indicators like the ADX are already signaling the resume of the uptrend and this should keep on up till 1245. At that point, depending on the strength of the trend, it will possibly keep on to test last top on the 1280's.
GILD: The Little Engine that CouldDespite my overall bearish outlook on stocks, Gilead Sciences stands out as the 'Little Engine that Could' in the sense that it keeps chugging along despite being battered by the broader index just after earnings came out late January. On the fundamental side, most analysts think it's way underweight citing that it should be worth as much as 66% more as per the attached article.
In my personal opinion, the fact that it is largely uncorrelated with the S&P index (overlaid in red) is actually a good thing. Stocks in general are in a frenzy over more free money from a global quantitative easing, bolstered further by the dovishness of the FOMC meeting consensus released yesterday.
Technically, it appears to be consolidating once more in somewhat of a flag pattern, which is even easier to see when Heikin Ashi charts are applied. Further, it is consolidating at a major fibonacci level (anchored from the high of 2016-01-25 to the strong level of support from the low of 2016-02-19). Yesterday proved very bullish leading us to expect some pullback, but the high of today was still greater than that of Tuesday, another bullish sign.
Note the proximity to the Ichimoku cloud, which may indicate further pressure building at that level. The other technicals such as the MACD, ADX and RSI suggest that we are ranging, though fortunately the Aroon indicator advocates that we are in a longer term uptrend.
Trading idea : Wait for a big bull bar to confirm the breakout from the flag pattern. Set your profit targets using the fibonacci levels above, with a protective stop at the base of the (hypothetical at this point) bull candle. Keep in mind that this may be something you want to hold on to long term.
All Eyes on FOMC for Equities PositionsData from the U.S. has improved by the barest of margins. The New York Fed Consumer Survey finds inflation expectations rising (by less than 1%) above expectations, and the ECB rate cut means lots of free cash to play with. Keep in mind we have the FOMC meeting coming up and their decisions will determine the direction of the markets for the near term. Expectations for the federal funds rate remain pretty consistent and the consensus is no change. Personally, I expect them to pay more lip service to foreign issues and reiterate data dependency. But the tone of their message could have a huge impact on the direction of the markets, in particular with the S&P. Moreover recession fears are still high as discussed in the attached article.
The chart on SPY forms a near perfect bearish crab pattern. Further, the Aroon indicator notes we are still in a long term down trend. The OBV does show some buying pressure, though the buying volume at present does not match selling volume from December. Further, the RSI is dangerously close to reflecting overbought conditions. Although the MACD histogram is still positive, it is decreasing indicating a potential crossover in the near future. Finally, there is a growing divergence between the price and the Ichimoku cloud portending a correction soon.
Trading idea: Don't enter a short position until you see a strong bear candle. After this, you can place a protective stop at the high of that candle, and set a conservative price target at the first fibonacci level at $195.26, or at $192.20 or even $189.81 depending on your risk tolerance.
Can Gilead Beat the Markets?As of March 3rd, Gilead earned a 'buy' rating from Citigroup as verified by the link. It is true that GILD should have performed better after earnings as has been historically demonstrated, but it took a beating with the overall index but failed to share in the rebound. Personally, I think this is a good thing, for you'll note from my previous post here previous post that this is nothing but a massive short covering rally, just like we are seeing with oil
The good news is that we seem to see see a nice breakout to the upside from the consolidation in terms of a bull triangle. We are not out of the woods yet, as we face resistance from the ichimoku cloud overhead and a neighboring fibonacci level at about $90.30.
In fact, the level mentioned above would make a great stop buy order to enter the trade, and clearly that strong level of support at $87.22 would serve as a good stop loss. The subsequent levels after $90.30 make perfect profit targets.
Massive Short Covering Rally in Oil: Trade AccordinglyThere's been a massive short covering rally of near historic proportions in oil recently. As the OPEC circus continues to 'cry wolf' regarding freezing production, the market, once overwhelmingly short on the commodity, takes the opportunity to cash out some of its short positions.
There is really no fundamental reason for oil to rally so hard as the attached article cites. Further, note that the OBV does not indicate any true buying pressure that would warrant such a correction. In fact, it still demonstrates quite a bit of selling pressure, an extreme divergence with price.
Further, note the bearish gartley pattern. It is not quite fully complete. But when the price hits anywhere from $40.30-$40.98 (as the pattern has been drawn to anticipate), we'll see almost perfect fulfillment of the ratios. Note further that this level happens to align with a strong fibonacci level on the fibonacci extension (if X-C is to correspond to the 50% fibonacci level).
Finally, we see that the 100 period Aroon indicator still notes that we are in a long term downtrend, and the MACD looks due to change directions and head toward a crossover into negative territory. The RSI is very close to indicating overbought conditions as well, to indicate a near perfect setup for a mean reversion short in and of itself, let alone the data cited above.
Look for it to retrace at least to 23.6% fibonacci level, if not to fully retrace and visit the $20 handle once again.
S&P Rally Short LivedWith the tsunami of data this week, it was really hard to sieve out anything stellar. At best, we had employment data that was above expectation on Wednesday, as well as a moderately improved ISM manufacturing index. PMI and Factory Orders left much to be desired. Central Bankers all over the world are scratching their heads and trying in futility to save face against waning markets and negative interest rates that have taken Europe by storm and seem to be spreading at a clip rivaling the Zika virus.
So why is S&P rallying? As Keynes himself said, "The Market Can Remain Irrational Longer Than You Can Remain Solvent". With the overtly bearish momentum this year to date, a proverbial 'dead cat bounce' was due. But that's all it is. One of the prime directives of trading is to trade with the volume not against it. This recent buying volume is still paltry with respect to the selling volume which drove the market down.
Timing is everything in trading. When can we expect a turnaround? If we take a look at the chart of SPY and apply some fibonacci analysis, we see a bearish butterfly pattern foreshadowing another bearish turnaround. If you apply fibonacci time slice analysis, you see that we can probably expect this to begin as early as tomorrow or to even by market close today.
The RSI seems to hint that the market is becoming overbought at this point, and we see a macd cross starting to form at 1 hour intervals. The OBV is still indicating positive pressure which indicates now is not necessarily the time to enter a short position. This is confirmed by the Aroon and ADX indicators as well.
Wait for a big bear candle tomorrow or by Monday, 2016-03-07. At this point you can set a stop loss at the base of that candle and ride the trade down to the 0.5, 0.382, or 0.236 levels drawn out.
Uptrend Force Makes Breakout LikelyBitcoin has smashed back into the new "downtrend line" from ATH. This 3 day uptrend is a solid trend continuation of the previous 3 day uptrend after a nice correction down to the $360 area. At this point the uptrend has serious momentum just starting. ADX has turned up, CCI is just above 100, and MACD histogram is accelerating into positive territory while the MACD line is trending up from the 0 line.
Basically we've hit this "downtrend line" with such force that it's likely to break. If you're long I would hold as long as you can to see if this breaks. If you're not in a position I would wait for the break to happen before going long. If you're short: stop shorting uptrends :D
Keep in mind this 3D chart can have some volatility on the lower timeframes, so I would make sure the uptrend is clearly over before going short if this "downtrend line" proves to have any worth.
No End to Bearish News for the S&PYesterday, Janet Yellen of the Federal Reserve spoke confirming expectations that the Fed would sit tight on interest rates. She even admitted today that the Fed is considering negative interest rates. Her ominous tone did not bode well for the markets as evinced by the abysmal market opening today here in the US. In fact, the world's markets are rearing from this glut.
As for the technicals, we have a bearish Aroon crossover, with the ADX signifying a solid negative trend. Additionally the MACD has crossed over into negative territory, yet the RSI indicates we are not yet oversold. Also note the bearish head and shoulders pattern which suggests we have a way to go before the bulls return.
Consider any rallies due to short covering at this point. Fade into any uptrends, for they will be short lived.
A long term perspective to help with shorter term tradesThe monthly chart has signaled a resumption of the previous massive monthly uptrend that took BTC/USD from $5 to over $1000.
The ADX (the blue line on the DMI), which is a measurement of trend strength or momentum, is the main indicator I'm concentrating on with this post.
Currently the ADX has switched back into rising mode which shows trend strength increasing in the upward direction. After taking a couple month pause in the first trend leg up the trend is likely to resume shortly, as in by the end of February.
This new uptrend comes after a long period of ranging between $300 and $200 or about 1900 CNY to 1300 CNY. After long periods of sideways great trends are likely to form after a breakout of the rang occurs, which currently we broke out to the upside while the ADX confirms we are indeed back in an uptrend on the same breakout bar.
I strongly advise people stick to searching for long only bias trades on the smaller time frames, because there is a significant upside bias on the monthly chart.
There is a slight possibility this could turn into a fakeout, which then leads to a real downtrend, but I find that to be highly unlikely after spending so many months going sideways.
Keep in mind the all time high of $1100 or 7500 CNY had the highest momentum of the entire uptrend. For those who look for divergences in momentum, we have yet to see any in the BTC monthly uptrends. The RSI not included on this chart shows this very clearly. From experience, trends normally get pretty close the previous highs before failing completely so I'd expect this trend to get us close to the all time high if not higher.
The ATR indicator I included is a modified ATR that shows a percentage based ATR along with standard deviation bands that identify extreme increases or decreases in volatility. In this case volatility is on the low side still within what would be considered a normal range.
I also included the MACD which is self explanatory bullish with an accelerating histogram as well as an above 0, rising momentum MACD line.
Good luck in the years to come guys, but I honestly think looking for short trades would be better done a year or so out from a trend perspective. I'd either wait for a massive move up beyond all reason and/or a clear sign of a trend reversal before attempting any shorts.
Finally there can be lots of volatility inside the monthly bars, so concentrate on the smaller time frames for your trades. I would only use the monthly chart as a guide for planning.
S&P Solidly BearishAny hopes for a recovery this week were quashed by today's open and marked declines henceforth. There really doesn't seem to be any indication of a turnaround, unless some good data comes out this week, and there is quite a bit to anticipate. As the attached article notes, analysts are cutting their expectations for the S&P, and it would be good advice to any investor heed this warning and do the same.
The head and shoulders pattern drawn here indicates a bearish trend, and today's open confirms this. Its a bit oversold at present (although the RSI does not confirm this, yet), but any rally should be a good point at which to enter a short trade, or exit a failing long position, thus easing the sting a bit.
As for the technicals, the MACD histogram is still in positive territory but its hanging by a thread and looking to cross soon. The OBV indicates a lot of selling pressure, and ADX indicator is distinctly bearish, and the difference between the up and down components are widening further, despite a recent apparently bullish Aroon crossover.
Bearish or accumulationWe have been on a long period with no clear trend, but looking at the weekly indicators, it shows that we just broke a large triangle and it is even shaping a head and shoulders pattern. All the indicators shown are really bearish on this time interval.
The best scenario would be an accumulation period that would take longer to define to the upside. I wouldn't bet on that unless we break 400 and stay there for several days.
