DIA
S&P 500 Next Week Expected Move ($34) & Gravity PointsNo call again... been a pretty directionless last 3-4 weeks.
SPY $300 right around the corner.
VIX got totally rejected.
Sell in May and Go Away articles coming out.
Buffett interested in Amazon
GDP was 3.2%
Unemployment Strong.
IPO's coming out. Uber Next week.
Smallcaps looking like a bit of a breakout, waiting to see if it's sustained. But would be very positive if there's continuation.
Goodluck next week gentlemen
- RH
Time to Accumulate MylanShares of generic drug manufacturer Mylan has become very attractive, especially after today's overdone selloff.
While the company has some hurdles legally (what drug company doesn't?) and has some internal housekeeping to tend to, the shares are becoming too cheap to pass up. At the time of writing, shares are trading at $23.30, down about 17% on the heals of it's latest earnings report. I don't believe this sort of selling is warranted but it gives value investors an attractive entry point to begin accumulating shares.
It's blown thru supports, such as the 61.8% retracement (dark blue line) of a multi-year climb higher and some previous major resistance-turned-support levels (white dashed lines), which I've left on the chart for reference. The recent bounce gave some extensions to use, but today's selloff has pushed shares right past the first one, the 127.2% extension at $24.39. The next extension, the 141.4% at $21.75, is interesting because it coincides closely with the 78.6% retracement of the aforementioned multi-year swing higher at $20.63. Should those fail, we have one last extension to target, the 161.8% extension at $17.95.
In essence, I'm buying a starter position today and will be adding if it dips to the lower levels, which really should be viewed as a major support zone between $18 and $21.
With so many patents expiring for blockbuster drugs, Mylan will soon be able to pump out cheaper generics of them and they have an excellent track record of cranking out pills that are in demand.
It'll be important to watch the headlines on this one, as there are legitimate concerns, but with P/E's at 5.3x next years estimates and 5.0x 2020 estimates, this is just too cheap to ignore.
Be sure to have a game plan, including a stop loss appropriate to your risk tolerance (say, a back-to-back weekly close below $17.95, or a percentage you're comfortable with like -10%).
Once I see some sustained uptrend taking place, or a major change in my thesis, I'll let you know! Until then, happy trading!
And Down She Goes!!Recently I published that bonds were going up, which could indicate a possible crash in Stocks.
Here is the Bond Long trade I posted:
If you are in PUTS for SPY/ DIA, i would recommend hold for longer.
Enjoy the profits.
-Shaggad
Bullish H&S in 3M Corp. Shares of MMM look to be forming an inverse H&S pattern that looks it could be a favorable setup for the bull camp. It's deeply oversold with an R.S.I. reading of 22.9 and is holding the neckline support, so I think it's headed higher.
Shares are in the buy zone right now at $185, which is the neck of the pattern. Look for minor resistance around the gap down at $197-200. I doubt this will pose much of a challenge for the shares, although it may provide another buying point.
Major resistance comes in at the target of the pattern at $218-224, which I believe will be reached prior to the next earnings release on July 25th.
Set your stop-loss beneath the head, around $177-179. That gives you a nice risk-reward ratio... -$8 (-4.3%) to the downside and +$39 (+21.8%). That's a 5.1:1 bullish ratio. I'm a buyer for sure!
S&P 500 Next Week Expected Move ($37.50) & Gravity PointsHappy all time highs. No call.
Google + Apple reporting next week. Microsoft reached 1 trillion market cap.
Majority of companies reporting earnings beats and revenue misses. How is that possible? Buybacks.
Keep an eye on Semiconductors, smallcaps, oil, and China.
Natural gas looking interesting.
Maybe check on the VIX positioning. Record number. When commercial hedgers start to decrease longs, it's game time.
finviz.com
S&P Next Week Gravity Points & Expected Moves ($32.25)Divergences starting to perk up all over the place.
long term Dow Jones countWhen this all comes to an end and wave 5 is complete get ready for 25 cent milk.
$IWM $RUT $TNA $TZA Small Caps About to Lead The Markets!While the large-cap stock indexes like the $SPY $SPX $QQQ $DIA have been running higher, they are now at resistance and should stall out or at least slowdown. Small-cap stocks have been building a base for a mega rally that could make the large-cap run look like chump change!
See more analysis on the small cap sector: www.thetechnicaltraders.com
Dow PennantCoiling... not sure which way this will break (depends on economic data and/or China news) but I got this feeling that it will hit the upper trend line first before it breaks up or down.
In other words, more whipsaw action
DIA IndecisionIndecision in the Market right now.
Bear Case:
*Multiple failed attempt to break resistance
*Head and Shoulder formation
*Broken wedge up
*Lack luster volume
*Bearish divergence on RSI
***Motivation for break lower : recession fears
Bull Case:
* 50 MA broke back above 200 MA
* Price holding above those two MAs
* Symmetrical Triangle engulfing the H&S (Larger pattern usually plays out)
* Possibly a bull flag forming (look at it in the weekly)
***Motivation for break higher : Trade deal
****Personally, I think we break lower... Let's talk about it!
VIDEO analysis on small cap stocks, bearish but at fib supportVIDEO analysis on small-cap stocks, bearish but at fib support for a bounce as of today
Small Cap Stocks lead broad market - This is bearishSmall Cap Stocks lead broad market - This is bearish
Chart does the talking
SPY Next Week Expected Moves ($52) + Gravity PointsLast week's call had me nervous for a second there. A very chaotic week, but I had several opportunities to put on a couple positions. Hats off to anyone who waited for that upper expected move. (two opportunities)
Large expansion for the expected move from last week to this week = expect volatility to pick up.
Couple quick notes:
- 10 yr / 3 mo yield inverted. You now are paid more to buy a 3 month bond than a 10 year bond. Fundamentally this makes no sense because you should be compensated for the additional risk of loaning your money for longer periods of time. Ill share some of my excel doc data of different yield curve pair inversions for the 10/3because it's so important:
---> 10 yr / 3 mo yield inversion time prior to next Recession: Average = 13 Months
---> S&P 500 Peak to start of recession percentage gain/loss: Average = -13.3% Median = -13.5% (Most losses happen prior to official recession)
---> S&P 500 percentage gain/loss during Recession: Average = -1.3% Median = 6.7%
---> Number of Months from Peak to Recession: Average = 8.7 months Median = 8.5 months
---> Number of Months in Recession: Average = 13.5 months Median = 10.7 months
---> Recession Start to S&P 500 Trough: Average = 8 months Median = 5.3 months
- Powell signaled to the market that the economy is weak
- Germany slowdown bad Friday morning manufacturing report
- China slowdown
- Brexit delated but nowhere near resolved
Best of luck next week gentlemen
- RH
P.S. Wish me luck on my Series 7 exam on Friday next week!
Small Cap Stocks with Bearish daily and weekly chartsThe Russell 2000 ETF continues to deliver critical technical and longer-term price patterns for skilled technicians. Combining the IWM chart with the Transportation Index, Oil, Gold, and others provide a very clear picture of what to expect in the immediate future.
Recently, we posted a research article about the Head-n-Shoulders pattern setting up in the $INDU. Again, the IWM chart is also showing a very clear Head-n-Shoulders pattern with critical resistance near $159.50 and support near $144.25. Our researchers, at Technical Traders Ltd., believe this right Shoulder will prompt a downside market move towards support near $144.25 before a downward sloping wedge pattern sets up. This first downward price leg will setup and congesting wedge formation that will, eventually, break to the upside and drive market prices higher.
We authored a research article about this pattern setup on February 17, 2019. You can read it here.
Skilled traders watch all the charts to assist them in identifying characteristics that can assist them in understanding price moves, key support/resistance levels, and price patterns. This IWM chart should be on everyone’s radar at the moment. Where the IWM finds support, so will the other US stock market indexes.
The IWM setup indicates we may only see a 5~7% downside price swing before support is found. We’ll have to watch how this plays out over the next few weeks/months to determine if the $144.25 level is true support or if the lower $137.00 level will become support. Either way, the downside price swing appears poised to unfold over the next few days/weeks – so be prepared.
Please take a minute to visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades in 2019. We have already positioned our clients for this move and we believe we can help you stay ahead of these markets.
Expected Moves ($33.50) + Gravity PointsPop and Drop likely. Target $2842.75 Gravity Point.
Next week is a positioning week. A bigger move is likely setting up in the following week. Take off / Put on Risk above and on that Gravity Point. Price must be firmly and immediately rejected, if price hops above $2842.75 and sits on top of it for a couple days the probability of profiting on a short trade diminish.
Good luck next week gentlemen
-RH
