Get started

Quantfinance

Gold Prices To $8K This Cycle ....?Not a mere prediction but extrapolating forward. FX_IDC:XAUUSD From 1976 - 1980, Gold from the bottom of the leg to the top of the cycle has risen approx. 690% and took about 1,247 days to occur. It has then proceeded to trend sideways for 20 years until its next bull run which has played out for a little over 10 years. During these 10 years, the bottom of the leg to the top of this cycle also had approx. 670% gains, similar to the previous cycle. The trend sideways after the peak then trended sideways for 5 years, a 4th of the time it took from the previous cycle to trend sideways. The time variable seems random to this current point to extrapolate forward but the percentage of the up-moves from cycle to cycle so far has a correlation of almost .95 - 1. A true sample study should have at least 15+ samples as we only have 2 cycles in which to gather correlation for BUT If this remains consistent and is extrapolated, the next cycles high for Gold is $8,000 .
FX_IDC:XAUUSDLong
by KennySniper
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.
AMEX:SPYShort
by quantguy
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.
NASDAQ:GILDLong
by quantguy
1
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.
AMEX:SPYShort
by quantguy
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.
NASDAQ:GILDLong
by quantguy
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.
NYMEX:CL1!Short
by quantguy
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.
AMEX:SPYShort
by quantguy
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.
SShort
by quantguy
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.
AMEX:SPYShort
by quantguy
1
Dark times for the EuroFrom political instability to ineffectual QE, bullish news for the Euro is scant. We can look for more confirmation from Draghi to this effect soon to come. As far as the technicals are concerned, we have a very strong bearish head and shoulders pattern forming on the weekly chart. There is massive resistance from above via the ichimoku cloud which will make a turnaround difficult. The MACD is waning and the RSI indicates entry into a position is safe. Further, there seems to be some high selling pressure via the OBV indicator. The Aroon indicator notes that we've entered bearish territory (on a day chart), and the ADX indicator is waning with the MACD, suggesting a collapse may follow soon, perhaps even after Mr. Draghi's speech.
Short
by quantguy
Bearish Double Top on NetflixUnfortunately for NFLX on the fundamentals side, they were ousted from Indonesia, which was a prime target for their international expansion endeavors, due to a failure to fulfill their censorship standards. Unfortunately for them, this simply adds to the list of bearish technical indicators despite 'buy' ratings from numerous sources. First, note the bearish Aroon and ADX indicators indicate a solid down trajectory. Also note that the MACD has been bearish for some time now, since before the new year (2016) in fact. Note further the strong selling pressure via the OBV. The optimal time to enter a short position? Wait for a short covering rally sometime in the next week following the massive dive from today, similar to what we saw in oil earlier this week. It will look head for the Ichimoku cloud bound from above, but most likely turn sharply after a Heikin Ashi doji candle when the market ranges for a day or so.
NASDAQ:NFLXShort
by quantguy
Bearish Head and Shoulders and a Gloomy Outlook for AAPLWhen Apple was using the Power PC line of processors in their computers, I was extremely skeptical of them. Their operating systems prior to OS X were abysmal. They crashed all the time, and the availability of software for anything I wanted to do was scant. Then they started rolling out Intel processors, and updated OS, and a slew of performance upgrades and I was sold. But, as the attached article mentions, the hegemony of AAPL is slipping. From the dreadful abomination that is iTunes, to less intuitive interfaces, to slipping iPhone sales, they are slowly and surely losing ground in the markets. The most obvious support for this statement technically is the bearish head and shoulders pattern apparent here. Next, we see a clear rejection from the important technical and psychological level of $120, and an exodus from the Ichimoku cloud. The MACD is solidly in negative territory, and the Aroon indicator together with the ADX confirms a lot of bearish momentum. The RSI indicator shows AAPL is oversold slightly, and the selling pressure evinced by the OBV seems disparate to the bearish price action, so we may anticipate a small rally soon, but this should be interpreted as a good time to enter a short trade, at around the $104-105 level. The doji candle at present seems to confirm a turnaround, or at least a pause from the recent landslide.
NASDAQ:AAPLShort
by quantguy
The Bears are still in full force on CrudeThere seems to be no shortage of bearish news on Crude oil lately. In fact, today's 'dark cloud cover' candlestick pattern is a bearish rejection of the level formed by Friday's close proves the little rally we saw on 2015-01-22 was merely just a short covering frenzy. Almost all the technicals indicate we are in a solid downtrend. The Aroon indicator is still at almost maximum divergence, and the ADX indicates a very strong downtrend. Although the MACD seems to have crossed, the strength of today's rejection shows its not likely to last. The OBV indicates strong selling pressure, and the RSI confirms this might be a good time to enter a short position. Also note that it closed below the important psychological and technical level of $30, as it is consistently breaking lower lows. The only concern is the distance from the Ichimoku cloud. Typically, this amount of distance may indicate a rally is near as we saw on 2015-08-27.
NYMEX:CL1!Short
by quantguy
Green Light on US Treasuries The China crisis has the world's markets in panic mode. Stocks had the worst first week in history. Currencies are tumultuous and volatile. Its difficult to endorse the Euro for anything more than short term swing trades at best due to their own problems. Commodity currencies are sure to tank, and stocks are too volatile lately in my opinion. One good idea for a long seems to be US treasury products, which historically have faired well in times of fear and panic. In particular, take a look at this bull ETF which tracks the US ten year treasury note. Observe the steadily rising lows and the roughly consistent level the highs have maintained at $78.00, a nice round number at that. Further, note the support from below via the ichimoku cloud indicating that a 'bounce' or retracement may be in order from the recent bearish momentum of the past week. The RSI confirms its a great time to get in, though admittedly, the MACD still suggests a bit of bearish momentum. I'd set a stop loss at either $73.75, or $72.50, both recent lows and psychologically sound, round numbers.
DLong
by quantguy
Remninmi Bottomed?With the China crash still fresh on everyone's minds its time to ask if the Renminbi has bottomed out or if there is still room to crash. Based on the link attached, there seems to be the potential for a lot more bad debt that China is trying to avoid confronting, and probably couldn't even account for if they tried. On the technical side, note the massive resistance from above via the Ichimoku cloud, successive massive drops and the inability to break previous highs. There seems to be a nice profit target at about 0.13730, which was tested and rejected on October 14th. As for a stop loss, there seems to be a level of support around 0.14032. The MACD and RSI do not indicate that this asset is oversold, despite the massive downturn as of late.
Short
by quantguy