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Russell2000

Technical Expectations, 12 Mar 2023🖼 Daily Technical Picture 📈 ➤ Most of you don't come to me for my thoughts on the fundamental aspects of the market environment and I don't usually offer them. There is however one particular aspect I think is worthy of mention. ➤ By now most of you should have read about the fundamental state of affairs in regards to SVB (Silicon Valley Bank). There are huge ramifications in regards to the further potential fall-out. ➤ If the fear or actual contagion takes place with similarly positioned banks or financial institutions then the next "target" would once again entangle the crypto space. Silvergate was the pre-cursor. But the "BIG" one or the "last man standing" is Signature Bank through its "Signet" service. ➤ Signet is as I understand it the basic backbone or gateway of fiat-to-crypto capital flows. It is the infrastructure for capital movement between the two worlds. If Signature Bank gets into trouble, the knock-on effects on crypto might be crippling at least in the short-term. Let's face it, crypto is not yet mature enough to be it's own self sustaining ecosystem. Anyway that's my take on this matter. I stand corrected. ➤ Back to the technicals, although we saw continued selling in equities on Friday, there was some late buying at end of day and into after-hours trading. I cannot tell you if this was dumb money bargin/dip buying or smart money taking advantage of the sharp drop. ➤ The VIX spiked to 28 before receding. For me, the panic level in equity markets is for a move in the VIX to 30 or beyond. We didn't get there. Of course, any contagion fear or otherwise should move VIX much higher. If it doesn't, it should be an "all clear" sign at least in the short-term. ➤ Conclusion: What will be important is the messenging by the US regulatory authorities and how market participants react to it. I would expect some sort of clarification or official stance taken prior to markets opening in Asia on Monday. Silence or a message that doesn't allay fears may result in a bad outcome in the short-term. NOTES: $BTC and crypto price is holding well despite the most recent developments.
AMEX:SPYShort
by mrstockyetoro
Taking A Swing, 10 Mar 2023🖼 Daily Technical Picture 📈 ➤ I'm probably being overdramatic by saying all hell has broken loose but it certainly looked that way from my perspective with today's equity performance. The VIX certainly portrayed it by spiking much higher. ➤ Equities experienced the biggest daily drop this year. It is an acceleration of the drop from the Feb 2 high. It was only yesterday that I was more in favour of an upward swing. Today's price action clearly have swung it back to the Bears. ➤ It's finally time. Continuing with my cricket analogy: The ball was delivered to my liking and I have taken a big swing of the bat. Will I be able to score some runs or will I get caught? ➤ Is this just the beginning of a fast and furious drop or will it be a short-lived affair? In the case I am right. The downside targets are 387, 380 and 370 on the SPY. ➤ Conclusion: I am Short with full risk after today's price action. NOTES: S&P500 looks to have moved decisively away from the 200 day moving average.
AMEX:SPY
by mrstockyetoro
The Probabilities Have Swung, 9 Mar 2023🖼 Daily Technical Picture 📈 ➤ Equity prices finished the day slightly up countering attempts for a further fall. Following-on from yesterday's note, that means there was NO FOLLOW-THROUGH by the Bears. ➤ I think the probabilities now favour a short-term reversal higher for the Bulls. A lacklustre uptick in the VIX with such a Bearish day yesterday was perhaps the first sign the probabilities have swung. ➤ As a Trader, I play the market based on probabilities. Let me explain this in keeping with my cricket analogy but this time from the perspective of the Batter. The Batter will play a shot depending on the type of delivery s/he receives from the Bowler just like in Baseball. The choice is to leave the ball or hit the ball with varying strength and direction. The more the ball is pitched to your liking (or to your strength), the higher the chance of your success of putting runs on the board. ➤ This is why in recent days I have not offered a shot and have let the ball "pass through to the keeper". Of course I want to trade but the market conditions have not offered balls delivered to my liking. I therefore watch closely, keep my concentration and wait. ➤ Conclusion: A shot at shorting the market is not out of the question but another day like today will see me take a Bullish shot. NOTES: S&P500 is still firmly attracted to the 200 day moving average. Price continues to whipsaw.
AMEX:SPY
by mrstockyetoro
The Follow-Through, 8 Mar 2023🖼 Daily Technical Picture 📈 ➤ Equity prices ended the day sharply lower. It was either this or the other way round. I hope you chose the right side. I'm still sidelined. ➤ It's not all bad being sidelined. I get to think and write more in regards to my insights into markets and their behaviour. ➤ As I said, NO trade was triggered today. It was close. Now I await the "follow-through". I'm pretty fond of that term because it first resonated with me through watching one of my favourite sports: Cricket. ➤ The "follow-through" action of a Fast Bowler in Cricket is very important. It's the ending action after the ball is released. It's vital for a Fast Bowler who steams in at great pace to have a smooth ending action in order to direct the ball as s/he wished, reduce chance of injury and not to be penalised for running on the pitch. It's all a bit technical but it's very important. ➤ A follow-through is just as important when it comes to market movement. It is important for the Bears to see a continuation of today's action tomorrow. Without a proper follow-through, this down move will be reversed easily. That's what I'll be looking out for tomorrow. ➤ Conclusion: A good follow-through to the downside would almost certainly see me leave the sidelines and become a short-term Bear. NOTES: all price gaps have been closed. VIX did not explode higher as it should have.
AMEX:SPY
by mrstockyetoro
2
Strange Happenings, 7 Mar 2023🖼 Daily Technical Picture 📈 ➤ Equity prices ended the day flat after the initial Bullish momentum carried over from last week. Strange was the out-sized relative underperformance of the Russell 2000 small cap stocks. It sold off quite aggressively. What's a plausible explanation? Interest rates? Maybe it was just one of those days... ➤ BTW, I forgot to mention this: Last Friday was the 10th CONSECUTIVE Friday that equities ended the trading day with a green candle i.e. higher close than the open. What's with this pattern of events? What will happen this Friday? ➤ I don't read too much into today's price action. It maybe some anxiety with upcoming economic data and blabbering Fed mouths. It isn't a reliable signal to say if prices will reverse lower or it was just a temporary pause in upward momentum. ➤ Conclusion: It's 50/50 on the direction of the next trade. Market is leaving me guessing.
AMEX:SPY
by mrstockyetoro
2
Marching Higher? 6 Mar 2023🖼 Daily Technical Picture 📈 ➤ My current view of equity markets is based on today's chart colour scheme. Green and a bit of grey. ➤ With a strong rebound higher in markets over the last couple of trading days, I think things look pretty Bullish. The trend from the October 2022 bottom is Bullish. It is a series of higher highs and higher lows. The classical definition of an uptrend. ➤ It looks like the Sellers have dried up. All the selling has been absorbed by the Buyers. Everything pretty much adds up to the Bullish tone. ➤ The only grey is the price structure that I look at (my secret sauce) remains not so clear. There is not yet a trading signal for a BUY and there is still a reasonable possibility to go SHORT. ➤ How prices evolve this week will almost certaintly settle the case and we should see a trade soon enough. 🤞 ➤ Conclusion: Looks can be decieving. 🥸
AMEX:SPY
by mrstockyetoro
2
Dip Dip Dip...Is it Done? 3 Mar 2023🖼 Daily Technical Picture 📈 ➤ A massive reversal of fortunes as the dip buyers show their hand. Is it the end of the short-term downtrend from the 2nd Feb high? ➤ The honest answer to that is I have no idea and no one else does either. We can only assign probabilities as to what may happen next. That after all is what Trading and Investing is all about. Making a sound judgement and then backing that up with money. ➤ With the current scenario, it is completely unclear to me as to how prices will evolve. That is why I haven't put on a position. That is why my Strategy hasn't given a trading signal. ➤ Today's price action builds on the scenario that I outlined yesteday. That is the Bullish scenario as explained by the abscence of strong selling pressure. I described it as the "drip drip drip" of small downward movements. The large Bullish intention of today's move could mark the end of the drip. ➤ However, there are many complications. One of which is how price resolves itself around the 200 day moving average. It is hanging around there like a bad smell. ➤ Conclusion: Trading is about discipline. We are not forced into a trade, it is a choice. There are good and bad choices.
AMEX:SPY
by mrstockyetoro
Drip Drip Drip... 2 Mar 2023🖼 Daily Technical Picture 📈 ➤ Another down day to start off March. You can see that prices have trickled down slowly drip by drip since the Feb 2 high. It feels like a death by a thousand cuts. Not enjoyable for the Bulls nor satisfying for the bloodthirsty Bears. ➤ It's certainly different to the drops in the past year where they have been fast and furious. This has two potential meanings: ❶ There's a lack of strong selling ❷ There's strong selling still to come ➤ In the first case, the behaviour says that the Bulls will eventually win out. They are absorbing whatever level of selling there is. Bears will exhaust themselves ending in an inevitable levitation in price (perhaps a fast one since there are no more sellers). ➤ In the second case, the dumb Bulls are buying the dip. As a more clever Bull you have the knowledge that there are more sellers than buyers. In order to exit your buy positions at the best price you exit with care, drip by drip. Until at some stage, the dumb dip buyers run out and then the drip feed becomes a selling waterfall as the Bears come to feed. ➤ Conclusion: These are the types of games the big players play. I don't really care for either explanation. My only care is that I grasp this opportunity to make money.
AMEX:SPY
by mrstockyetoro
Poised for Action, 1 Mar 2023🖼 Daily Technical Picture 📈 ➤ February is done and dusted. Tuesday trade ended down after a late sell-off. The second consecutive down day. Although prices have moved laterally for past few days, the behaviour shows Bears taking control. Previously, we saw buying support to close out the day, this has now reversed. ➤ I think price is poised to stride lower very soon. I'd like to see VIX rebound higher in concert with a price drop to bring a higher level of confidence that the drop will stick. In fact, VIX has been stuck in the low 20s for a while. I need to see this spike much higher. ➤ Conclusion: February was favourable although there was little trading action. On to March we march.
AMEX:SPY
by mrstockyetoro
A Short Pause, 28 Feb 2023🖼 Daily Technical Picture 📈 ➤ As per recent weeks equity prices opened with optimism and finished with a whimper. Today was no exception. Price filled the large gap left open on Friday trade but made no further headway. ➤ S&P500 equity index is still dancing around the 400 level and the 200-day moving average. I expect this to continue but only for a few days. Price should break away from this area very soon. ➤ Price could move upwards to fill in the two smaller price gaps just above but I think more likely it may drop. A good sized drop will give me an opportunity to re-enter with shorts. A move higher may mean staying patient for a trade. ➤ There's plenty of action in other asset classes. See above links for USD and NATGAS price action. ➤ Conclusion: Last day of Feb, time flies by so fast when you're having fun.
AMEX:SPY
by mrstockyetoro
TGIF, 24 Feb 2023🖼 Daily Technical Picture 📈 ➤ A negative day to finish off a negative (shortened) week for equity prices. S&P500 was down around -2.7% from previous Friday close. ➤ Yet again we saw Friday trade finish higher than it started (green arrows in chart). This makes it 9 consecutive Fridays. Probably the only consistent observation that I can make since the start of the year. Yet I do see a wrinkle, overall, the size of the "body" of the candle i.e. distance between daily open and close has narrowed. Either someone has exploited this anamoly or it is simply the fact that we should expect a narrowing during a short-term downtrend since 2 Feb. In that case, when the bullish trend returns, we should once more see a large profitable body on Fridays? ➤ We should also note the gap in daily prices between previous days' close and the next days' open (blue arrows in chart). These tend to get filled in due course, meaning prices should at some stage (whenever that will be) will return back up to these levels. ➤ Anyway, I shouldn't bore you with such uninteresting and useless observations. Over this weekend, I'll re-visit some of the charts to look at any price developments in other asset classes such as NATGAS, GOLD, USDOLLAR etc. ➤ Conclusion: TGIF, have a great weekend!
AMEX:SPY
by mrstockyetoro
The 400, 24 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equities were all over the place on Thursday trade. Starting higher, dipping lower before moving back up to where it all pretty much started. That is "The 400". ➤ 400 is the key round number level of the S&P500 Index (SPY) or 4,000 for the SPX500. Price tends to get drawn to and then gyrate around these round numbers like a moth to a flame. Not to be outdone, there is also the 200-day moving average in the midst. ➤ What's significant about the round numbers like 100, 1,000 or 30,000? Nothing in particular. It's just that "human" psychology finds them "favourable" or "comforting" or "satisifying" perhaps? It's certainly more appetising than a number like 30,627. Obviously, algos and bots also try to exploit these conditions, hence the back and forth we usually see. ➤ I took the exit signal to get out of my short position. Does it mean prices may bounce higher? It's certainly possible but I don't have a high conviction view. I'm going to sit it out for now until the next favourable opportunity hopefully very soon. ➤ Conclusion: Happy to be counting my profits until the next trade.
AMEX:SPY
by mrstockyetoro
📉 Stoch Markets: Is the worst really over? 🚀⁉️📝 I will try to analyze the market as a whole, with reference to the Russell 3000 index , which is broader than the S&P 500 . (Russell 3000 is a capitalization-weighted stock market index that seeks to be a benchmark of the entire U.S. stock market. It measures the performance of the 3,000 largest publicly held companies incorporated in America as measured by total market capitalization, and represents approximately 97% of the American public equity market). 📈 On the top chart we have the Russell 3000 . 📉 On the bottom chart, we have the Russell 2000 Growth divided by the Russell 2000 Value . (The Russell 2000 Index is a small-cap stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index). The intention here is to see how the companies classified in the 'Growth Investing' category are performing, using the 'Value Investing' companies as a parameter. 🤔 As a rule, it is to be expected that when traders and investors are more prone to risk, they invest more money in 'growth investing' companies than in 'value investing' companies. 1) Analyzing divergences 1.1) 2006-2008 In the period from 2006 to 2008 we had a divergence: the Russell 3000 had lower funds, while the Growth companies had higher funds. The apex was found precisely in the blue diagonal channel, on 12/30/2008. Note that Russell's bottom was only found on 03/10/2009, 3 months later. There is a clear anticipation in the contribution of 'Growth' companies. 1.2) 2014-2016 Russell tests the support of the green line several times, the last one being on 02/11/2016. Meanwhile, Growth companies remain on the rise, however reaching the blue diagonal channel again on 02/02/2017, 1 year later. In this case there was an outflow of 'Growth' companies, at least until reaching the blue diagonal channel. After that the increase continues. 1.3) 2018-2020 In this period we have a classic book divergence. The Russell peaks downwards on 21/12/2018, and later on 23/03/2020, featuring lower bottoms. Meanwhile, 'Growth' companies continue to 'respect' the green close with ever higher funds, reaching a low peak on the same date. 1.4) 2022-? Considering the bad macro-economic scenario, with the high cost of money and inflation, it would be surprising that the 'Growth' companies had a better performance than the 'Value' ones. Despite this pessimistic bias, if this indicator breaks above this green diagonal line and stays there, I will reconsider this opinion. If not, I think it is more likely that it will hit the blue diagonal channel again to form the final divergence. 🟢 For comparison purposes, considering a more global aspect and not just the small companies of the Russell 2000, the same analysis could be done on the ratio between the RAG and RAV indices (Russel 3000 Growth/Russel 3000 Value): 2006-2008 2014-2016 2018-2020 2022-? 🔵 What's important to note is that these key moments happened in December and March.
R
by andre_007
Trend Continuation, 23 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equities finished slightly down although tech and small cap outperformed. Price recovered from the day's low towards the end of the trading session but was not able to hold on to earlier gains. ➤ Overall, there's little to say about today's price action. S&P500 once again finished below the 400 level. Usually around these "round" numbers, price likes to move to and fro. ➤ I continue to hold my large short position. ➤ Conclusion: I still favour trend continuation to the downside in the short-term.
AMEX:SPYShort
by mrstockyetoro
Hang On Tight! 22 Feb 2023🖼 Daily Technical Picture 📈 ➤ It was a strong red day across the board with small-cap and tech suffering the most. Interestingly the DOW 30 lost more than the S&P500. That is unusual. Our hanging wo(man) failed to hold on to support on two accounts. Firstly the short-term low at 405 and also the 200-day Moving Average. ➤ Today's losses wiped out all of the February gains as well as 50% of the gains for the year (as measured from the recent peak). ➤ So where will our hanging wo(man) land? Around 390 is a clear first target. If that doesn't hold, next level is 380. ➤ I continue to hold my large short position. ➤ Conclusion: Hang on tight!
AMEX:SPYShort
by mrstockyetoro
Don't Leave Me Hanging! 20 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equity prices finished Friday trade in an unconvincing manner. It looks like a wo(man) struggling to hang on from height (as illustrated). Obviously I'm a bit biased given my short positioning. Price did hold above the recent low at 405 so there is an opportunity for price to continue to recover. ➤ BTW, have you noticed that on every Friday since the start of the year, the market has closed higher than the open? What does it mean? Probably nothing...just thought it was good trivia. ➤ Anyhow, the price is really hugging my predicated price path nicely. To stay that way, we need to see the price drop immediately on resumption of trade Tuesday. There's nothing magical about the path, it is completely coincidental that the price is following it. ➤ Conclusion: Look out below.
AMEX:SPYShort
by mrstockyetoro
It's Showtime! 17 Feb 2023🖼 Daily Technical Picture 📈 ➤ We continue to see significant intra-day volatility in equities. Swings in excess of 1% up and down are now the norm. We should continue to expect this especially during this crucial period. ➤ This is the first day after many that the prices have managed to finish lower. The Bulls were not able to support the price. Their attempts today failed. That was sufficient to give me the signal to go ALL IN. Meaning, I am now SHORT with the maximum position size. It's Showtime! ➤ For things to go my way, I firstly need to see the price confidently break below 405. This was the recent low in the side-ways movement in the past couple of weeks. Then there is the much watched 200-day moving average at around 400. Below that is a possible fast drop to 390. That's around a 5% move from current levels. ➤ Conclusion: The Short trade plan is beginning to move in my favour but plenty of things may go wrong.
AMEX:SPYShort
by mrstockyetoro
Now or Never, 16 Feb 2023🖼 Daily Technical Picture 📈 ➤ For the fourth consecutive day, price finished the trading day higher than the open. All this "bullish" action has occurred within the shadows of the large "bearish" bar on 9th Feb. ➤ Yesterday, I looked at the Bearish case of this "laboured" move. Today I'm going to touch on the Bullish story. ➤ The case for being Bullish is quite simple. The market has formed a Bullish "flag" technical chart formation. This is a minor retracement where prices whipsaw up and down either in a sideways or slight downward manner within the primary Bull trend. At some stage, price will then accelerate higher by breaking above this price congestion. ➤ The 4 consecutive up bars of recent days is telling us that despite the best effort of the Bears, the Bulls have overcome them. ➤ Conclusion: It is now or never for the short trading plan. Another day like today would see me switch camps to the Bulls.
AMEX:SPYShort
by mrstockyetoro
All To Play For, 15 Feb 2023🖼 Daily Technical Picture 📈 ➤ The price reaction post the Inflation data was anti-climatic. Equities started lower but ended higher. Overall, slightly down from the previous day. ➤ Don't be fooled by my chart that has plotted an almost perfect trajectory for the price path thus far. This will most certainly be wrong. I'm no Nostradamus. ➤ For Traders like myself who are holding a short position, the rise over the last three days has not managed to surpass the large down day on 9th Feb. Bulls are finding it tough. Of course, that doesn't prevent prices from surging higher, it just shows that the Bears are still in the game. The game is wide open, it is all to play for. ➤ I would need to see the VIX reverse course quick smart though. It collapsed today. A solid up tick is needed for the Bear thesis to play out. ➤ Conclusion: It is still going to plan.
AMEX:SPYShort
by mrstockyetoro