Timing the Bubble Burst Sequence (DJIA/Gold)... And the Price Levels. (Ought to speaks for itself.)
Same as the Title Chart - less distorted;
Indexes
DXY (Dollar Index): Watch Carefully!!! Potential Bullish Move
Hey traders,
DXY nicely bounced from strong horizontal structure support last week.
Taking into consideration that the index remains bullish from the beginning of this year,
we remain bullish biased.
On a 4H, the price is stuck within an ascending triangle formation.
Breakout of its horizontal resistance will lead to a further bullish continuation.
In case of a bearish breakout of 91.7, the setup will be invalid.
NASDAQ (NAS100USD) How to Catch the Trend?
US100 reached a peculiar confluence zone.
We see a perfect match between a major rising trend line and horizontal structure support.
On that, the price is currently trading in sideways and formed a horizontal decision range.
To catch a bullish continuation, wait for a bullish breakout of its resistance (4H candle close above).
Then buy aggressively or on a retest.
Goals:
13300
13867
In case of a bearish breakout of the range, further decline will be explected.
Equity sentiment suddenly got very bearish this weekSentiment Is Suddenly Very Bearish on Equities, SPX, NDX, RUT
It's been a volatile few weeks of trading as the S&P 500 pulled back a bit (and the Nasdaq pulled back a bit more). Bearish sentiment has grown as the price dipped. The $CPCE equity put/call ratio rose sharply this week to levels last seen in March 2020, near the beginning of the pandemic.
The current put/call ratio on the $SPY S&P 500 ETF is 1.5. That's actually better than the average for the last 30 days (1.7), but it's still quite negative. Sentiment is even more negative on the $QQQ Nasdaq ETF, with a put/call ratio of 2.2. The $IWM Russell 2000 small cap ETF is looking even worse, at 2.3. Stock market options traders seem to think that interest rates will continue to rise and the stock market bubble is soon to burst. A lot of the finance wonks I follow on Twitter sold into Friday's strength.
However, options on the $TLT 20+ year Treasury bond ETF are sending a different signal. With a put/call ratio of 0.9, bond wonks appear to expect at least a short-term weakening of rates and a rally in bonds from here. $TLT has entered a region of fairly strong technical support:
Despite Negative Sentiment, There Are Lots of Fundamental Reasons to Be Bullish
To be honest, I think the bearish sentiment in equities may be premature. We've got a fourth vaccine thanks to Johnson & Johnson, with Merck slated to help provide manufacturing capacity. This means we could get all US adults vaccinated 2 months earlier than expected. Plus Merck seems on the verge of getting approval for a Covid therapeutic that could be helpful as well. The savings rate rose during the pandemic, and a lot of that "quarantined cash" will be unleashed on markets as people get vaccinated.
Plus, there's more liquidity in the pipeline. We've got another round of $1400 stimulus checks coming. Markets have been worried about a federal minimum wage hike, but it doesn't look like that will happen. The stimulus bill provides $300 billion of support to state and city governments, which removes one of the big risks to the recovery: rising state and local taxes to cover budget shortfalls. Despite rising interest rates, private lending has ticked upward in recent weeks:
An uptick in private lending historically has been a confirmation signal that a recession has ended, as I laid out in a previous post:
Plus, the jobs numbers this week surpassed analyst expectations by a wide margin, and the ECRI leading economic index has resumed its upward trend. So economic data are signaling continued recovery ahead.
The Bear Case Is About Valuations and Rising Interest Rates
The bear case would seem to be threefold. First, valuations are very high. Which is absolutely true, but won't necessarily stop them from getting higher. Second, more stimulus means more inflation, which means interest rates could continue to rise. (Inflation is bullish for stocks, but rising interest are bearish. So it's a tug of war between the two, and the question is whether rising interest rates will be enough to rein inflation in. The bears are betting that it will.) And third, there's a technical case for continued market weakness, because $SPY has violated its support trend line. However, I suspect it will establish a new, less steep support line a bit below the previous one. I suppose we could see a 10% correction to the 50-day EMA:
But even that feels unlikely to me, given the strength of the fundamentals. I think this correction could prove much more modest than that:
Admittedly, I'm not pouring cash into this market at these valuations. But despite rising bearish sentiment, I'm pulling cash out of the market, either. In my opinion, it's likely too early for that, given the fundamentals.
Price drop range comparisons of NDX, DJI. DJI set to outperformThe NDX has been extremely volatile and high-flying in comparison to the DJI. I believe this trend is set to reverse. With the rotation out of the lofty valuations of tech into quality companies with positive cash flow, war chests in their balance sheet to weather any storm and protect their dividend, and P/E ratios that aren't in nosebleed territory.
As you can see, every time we've had a sell-off recently, the DJI is affected much less than the NDX. As you can see on the 1-week chart, the NDX is flying high above the SPX and the DJI. This outperformance is not sustainable.
As the 10-year treasury passes the average yield of the SPX is 1.5%, the average yield of the DJI is 2.4% will look safer and more attractive as investors seek income since returns will be harder to squeak out. The DJI should begin to outperform both the SPX and the NDX.
Price range in blue= NDX
Price range in gray= DJI
1-day chart with price drop range comparisons of NDX & DJI
4 hour charts with price drop ranges:
with out
15-minute chart with price drop ranges
This is not investment advice, just a theory. Do your own due diligence and gauge your risk properly.
NASDAQ 100 Trade Set Up.Nasdaq dropped dip, i think it will be a nice opportunity to get into the dip. When you look at the chart you will notice that every time it dropped that dip it reversed immediately. Looks like we are seeing a reversal that we don't want to miss. Comment below what you think of the chart and don't forget to click the like if this was helpful to you.
Nasdaq ReversalChina had returned yesterday from a week long holiday, with a big sell off of assets.
US still bought up everyday, into a green candle.
Asia and Europe have been very neutral on indexes so far today.
Drawing a pitchfork from the march crash, we can see we bounced off the upper third, of the bullish trend.
Drawing a fib from the triangle, Nasdaq may have bounced off a fib, to retest the top of the current trend.
S&P 500: The next big moveThe current pattern forming here is a recurring pattern of the s&p 500. It likes to drop to gather momentum before surging north. Now I expect it to drop lower to break the previous low to form a higher degree corrective pattern before the bull run. Do you expect the red or the blue pattern to play out, comment your opinions below and don't forget to click the like if you do. Share this with all your friends. Trade with profits.
Airbnb - Ready for a big lunch!If it was helpfull, please dont forget to like and follow. Its a simple bearish/bullish chart.
I'm glad to know your opinion, leave your comments.
Stay tuned.
BP PLC (BRITISH OIL): Classic Long Trade
BP reached a strong 4h structure support.
On that, the price has formed a double bottom formation with equal lows.
After a violation of its neckline, we see a retest.
With a high probability, the market will start growing soon.
Goals:
275.
285.
LUFTHANSA AG (LHA): BAIL or FAIL
Being the honorable member of DAX index and gigantic employer,
Lufthansa is too big to fail.
Though its stock prices dropped significantly, the enterprise will receive as many bailouts as needed.
It's not a mom & pop shop that went bankrupt during the lockdown, that one is much more important (hope you feel that irony).
For us, however, its cheap price gives a perfect chance to make a great investment decision.
"Buy low, sell high" remember?
DOLLAR INDEX (DXY) Trend Reversal & Strength
hey traders,
it looks like we finally see a confirmed bearish trend violation and reversal on DXY.
from 6th of January, we see the zigzag movement with 89.1 initial low, equal high retesting the December's lower high,
higher low and finally a new higher high higher close on a daily yesterday.
it is a classic price action reversal formation.
now in the mid-term, I expect more strength to the dollar.
The closest resistances to look at:
91.75
92.15
Don't trade dow without this analysis.Look what happened in february 2020 to learn a few things similar to what is about to happen. it started climbing from 2019 until it fell off the cliff. It is climbing and is now close to the top of the cliff. What do you expect?
VERIZON COMMUNITACTIONS (VZ): Bullish Continuation
hey traders,
nice channel breakout on VZ yesterday.
with a high momentum bullish candle, the stock is now trading beyond the boundaries of the flag.
now the broken trendline serves as a local strong demand zone.
I would recommend you buying from that expecting a bullish continuation.
Goals:
58.4
60.0
DXY (Dollar Index): Signs of Weakness
hey traders,
it looks like dxy returns to a bearish trend again.
after a quite impressive growth from 6th January, yesterday the price broke below a support line of a bearish flag pattern on 4H.
that breakout may be a perfect trigger for the initiation of a new bearish wave.
for now, I expect a continuation to 90.0/89.25 levels, but we must remember that the global trend is bearish and indexes may continue falling in value.
please, support this idea with like and comment! thank you!
DXY Analysis ahead of the announcement of the stimulus. President-elect Joe Biden will make a speech later today to outline plans for a huge fiscal stimulus bill to help the US economy recover from the pandemic.
Reports suggest the new fiscal stimulus could be worth anywhere between $1.3 trillion to $2 trillion and include direct payments of up to $2000 to hard-hit citizens. A $900 billion package was recently agreed by Democrats and Republicans, but Biden has described this as a down payment ahead of his inauguration. That included direct payments of $600 to citizens after Democrats were unsuccessful in their attempts to raise the figure.
Having now won control of Congress following the Georgia run-off races, Biden is expected to push ahead with a sweep of Democrat policies, but he is keen to win the backing of Republicans to build on the bipartisan mood that has struck both parties during Donald Trump’s final days in office. That may dissuade Biden from trying to ram through too much straight away and approach it in phases to garner the support of both Democrats and Republicans. He is expected to focus solely on coronavirus-relief measures at first and not to mix it with other policies to do with matters like healthcare or infrastructure spending, which he is expected to pursue later.
On top of larger cheques, reports suggest Biden could look to increase support for minority groups and billions of new funds to accelerate the country’s vaccination programme. State and local governments, which also fund the likes of schools and hospitals, are also set to receive more money.
Impact On The Economy
Biden’s push for a big new stimulus package comes amid a rapid deterioration of the economy under the strain of a third wave of the coronavirus. The economy shed 140,000 jobs in December, a steep decline just as U.S. covid-19 deaths hit an all-time high.
Biden is also likely to push for a larger legislative effort later in 2021 after the initial stimulus package. That effort is expected to focus on spending trillions of dollars on infrastructure and clean-energy jobs. The former vice president additionally has pushed for significant overhauls to America’s health-care system, something that could also be wrapped into legislation later in the year.
Biden is attempting to bring back hope in the economy, hence winning investors confidence.
In the markets, the bigger the proposal’s price tag, the better for equities and the U.S. dollar. There has been a paradigm shift lately in dollar dynamics, where promises of astronomical spending now boost the reserve currency as the rosier outlook for growth overshadows deficit concerns. If all the spending supercharges the economy, the Fed could reign in its generosity.
BMW: Pullback From Key Level
BM stock reached a key high of 2020.
On that the price has formed a double top formation with a lower high on daily t.f.
Its neckline has been recently broken.
Now I expect a bearish continuation.
Goals are based on daily structure:
65.0
60.0
Airline IndexThis is an index I have created to track airline stocks. It is equally weighted and includes:
BA - 1 share
AAL - 15 shares
UAL - 5 shares
DAL - 5 shares
SAVE - 9 shares
ALK - 5 shares
LUV - 5 shares
JBLU - 16 shares
American Tower Corp (AMT) Classic Trend Following
Yesterday I took a nice short trade on AMT stock.
Reason:
down trend on daily/4h charts.
Trade was taken after a breakout of a bearish flag pattern and consequent retest.
Now stock is preparing for a new bearish wave.
First goal - 205
Nifty Update - Expect a pull back before reaching 15000.Hi Traders,
Nifty can pull back to key zone at 14000 - 13775 levels after testing the upper channel. Since nifty is near the upper channel we can expect a pullback very soon, this can be used for positioning yourself for the rally towards 15000.
If nifty breaks the upper channel, Then price can rally towards 15000. But this move can be seen as an exhaustion which is an indication of bearishness in the long term.
Note:-
1. This analysis can be used only for long term positions.
2. This analysis is done based on technical analysis without considering any fundamentals.
Pls comment below for queries...
Happy trading....
Nikkei: After Hitting 30-year High, What is next?Hello community, after a 5 wave (12345) impulsive structure we expect at least a corrective structure which contains lower degree impulses. Now the 5 wave impulse is getting completed and we expect bears to take over. I will keep updating this chart if necessary. Comment, like follow for more accurate ideas. Thank you.
Will The Current Situation in America Cause The S&P 500 To Drop?Technically speaking we are in the wave 5 of this current structure which is the last wave, after which we expect a reversal or a bearish higher degree corrective structure for a trend continuation. Both are good for the shorts.
Now Fundamentally we are In the midst of one of the most polarizing elections of America’s history, we have seen more fluctuation in the market than in recent years. While fluctuation is normal, it can cause investors to make decisions that may not be the best for them. Panic selling is a moment where an investor or a group of investors decides that they want to go completely to cash and they sell everything they have in the market—regardless of the quality, efficiency or effectiveness of their holdings. Basically, they just throw up their hands and sell everything. As prices are driven down, more panic sets in and we get stuck in a vicious cycle.
Panic selling will drive the s&p 500 down in a way that is artificial—the price reduces but the quality does not. That means if 1,000 people are all panic selling and trying to sell off everything at once, someone out there (usually an institution, a hedge fund or a wealthy individual) is going to be able to buy s&p 500 at a much lower price.
NIFTY: Accurate Wave AnalysisHello community, after a 5 wave (12345) impulsive structure we expect at least a corrective structure which contains lower degree impulses. Now the 5 wave impulse is getting completed and we expect bears to take over. I will keep updating this chart if necessary. Comment, like follow for more accurate ideas. Thank you.
