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Russell2000

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
Going to Plan, 14 Feb 2023🖼 Daily Technical Picture 📈 ➤ Happy Valentine's Day to all my Copiers and Followers! Even if the market is showing you no love, I still will! 😘 ➤ Equities moved higher Monday. It was expected but I didn't know to what extent. Nor does it matter unless it moved beyond the levels as set out in my post yesterday: "The Perfect Trade Plan". See related idea below. ➤ Today's aggressive move higher does not alter our plan, if anything, it is going to plan. It can be argued that today's move was pretty meaningless. It was completely encapsulated by the large down bar on 9th Feb, it tells us very little of what happens next. You could further argue that this is a "trap" to allow the big players to exit their holdings or to put on more shorts at a better price. Very much like the bullish price action on 7th Feb. It all has to do with the upcoming main event. ➤ Inflation data Tuesday will almost certainly reveal if the above is true. It will probably also mark the make or break moment for my trade plan. A daily close above 417 on the SPY or if VIX collapses below 17 will force me out of my position with a loss. ➤ Conclusion: Still going to plan.
AMEX:SPYShort
by mrstockyetoro
The PERFECT Trading Plan, 12 Feb 2023🖼 Daily Technical Picture 📈 ➤ Here's my plan of attack for the early part of next week if all things go according to plan: ⦿ I am already holding a small short position in the equity market. I'm looking for further downside to play out in the next couple of weeks. The major catalyst is the US inflation data release this coming Tuesday. ⦿ As illustrated on my chart, this is the idealized path I would like to see the price take in accordance to my trade plan. I would like to see the price move flat or higher on Monday. This is very possible given that there might be further buying support flowing on from Friday. ⦿ On inflation data Tuesday, I would like to see equities sell-off. A sufficiently aggressive sell-off will provide me with the opportunity to add to my shorts to a maximum position size. ⦿ I would like to see prices continue falling for the remainder of the week and beyond. The primary price target would be down to 390 on SPY or 3900 on SPX500. ❓What can go wrong? ⤑ A lot. The second worst scenario is that Bulls take charge on the release of the inflation data and drive prices aggressively closing beyond 417 on the SPY or VIX collapses below 17. This will force me out of my position with a loss. Although It won't be disastrous given my small position size. ⤑ The worst scenario is after adding to a maximum position, price reverses aggressively higher beyond 417 on the SPY or the VIX collapses below 17. This will inflict maximum loss. ➤ Conclusion: It nevers goes to plan.
AMEX:SPYShort
by mrstockyetoro
2
The Last Supper, 10 Feb 2023🖼 Daily Technical Picture 📈 ➤ I’m no Trading God, but was today’s price action the Last Supper for the Bulls? Is the free flow of sweet wine about to be cut-off? Not sure if this reference was blasphemous, I plead for mercy. ➤ Equities opened the trading day aggressively higher but by the end of day it was a complete 180° reversal of fortune. What do I make of this? ➤ Clearly, the Bears would be encouraged by today's price action. Price has definitively closed back below the resistance zone. VIX has responded by moving back above 20 from where previous downtrends began in ernest. ➤ The only wrinkle and it may be a very short-term one is that the drop from the recent high is not a change in behaviour. i.e. this drop is nothing out of the ordinary. The two key observations for a change of behaviour are: ➊ out-sized bearish candle/bar or ➋ out-sized drop since the beginning of the intermediate bull trend (since Jan 2023 low) ❌ Neither of these has occurred (when comparing to the drop on 18th Jan). Of course, we just need another bearish day and we will easily fulfill observation ➋ ➤ NOTE: A change of behaviour does not mean a trend has ended. It is only a warning sign (the amber coloured traffic light) that something is afoot. ➤ I still hold a small short position. ➤ Conclusion: Plenty of Bulls are drunk, tell them not to drive - translation: just be careful
AMEX:SPYShort
by mrstockyetoro
Lateral Thinking, 9 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equities failed to keep the upward momentum. Today, it started lower and finished even lower. Despite that, the price action was not really meaningful. In technical speak, today was an example of an "inside" day, where all the price action was situated within the shadows of yesterday's large bullish bar. Therefore, we are none-the-wiser to what tomorrow brings. ➤ I hope through my daily communications with you, you are starting to get a better feel of my approach to trading. I'd like to think that I bring a form of lateral thinking. This is my trading edge afterall. ➤ That being said, I'm thinking quite literally that markets have a high chance of moving more laterally. Price is trapped around the resistance zone. So far, there is nothing specific in the price action that displays immediate signs of a trend reversal lower. It just looks like the market is biding it's time prior to making the decisive move. The more it trades side-ways, the greater the odds of the market moving higher. ➤ I hold a small short position. ➤ Conclusion: I hope my thinking is wrong.
AMEX:SPYShort
by mrstockyetoro
Bulls Never Say Die, 8 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equities went full Bull mode today despite some intra-day volatility. It looks like it wants to surpass the recent high. ➤ There's really only one thing that could stop it and that is the super overextended nature of this Bullish move since the Oct 2022 bottom. Perhaps it is not really "stoppable". It may just be some lateral price movement to work off the exuberant enthusiasm prior to jumping higher. ➤ I am still holding my small short position until I get the exit signal to get out. For example, a daily close above the recent peak will definitely do that. ➤ Conclusion: Optimism may fade but it usually comes back. It rarely dies.
AMEX:SPYShort
by mrstockyetoro
1
First Strike, 7 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equities opened lower and ended from where it started. The more speculate stocks selling off more than the Bluechips. This was sufficient to get me into the Bearish mode. ➤ S&P500 is now trading below the double resistance line. I see the potential for it to drop some more. I'm using a small amount of capital to take a short position. ➤ This is also the first "live" test trade for my volatility strategy. This test involves using real capital in real trading conditions but with a small portfolio allocation. ➤ The play book going forward was outlined yesterday: A short opportunity first. This then opens up the second set of opportunities offering the high conviction trades. Increasing short positions as price weakens further with continued selling pressure or reverse with long positions if Bulls come in and support the price to invalidate the short set-up. ➤ Conclusion: Back in the game.
AMEX:SPYShort
by mrstockyetoro
2
I Smell Opportunity, 6 Feb 2023🖼 Daily Technical Picture 📈 ➤ Equities are at an interesting juncture that should provide good trading opportunities. I can smell it. ➤ If we look at the $SPY chart of the S&P500 equity index, we can see that the price is in the midst of testing resistance levels. These resistance lines are probably the most solid since the start of the rally. I therefore foresee the chance that price may settle or retrace downwards from current levels. ➤ Friday price action was a great example. The price was "trapped" entirely between the confluence of key levels. The question is where does it go next? ➤ For me, I really don't know nor do I care. All I really care about is if it will provide trading opportunities long or short. I can see both scenarios playing out. Perhaps a short opportunity first. This then opens up the second set of opportunities offering the high conviction trades. Either prices weaken further with continued selling pressure or the Bulls come in and support the price to pump prices higher. ➤ Conclusion: I'm ready to play.
AMEX:SPY
by mrstockyetoro