SPXL
ES1! - Not at the top... Not even closeLook at the expansion in the MACD /signal lines. We haven't hit overbought yet. If you step into a weekly chart and examine the last few major advances in the market before 'peaks' (2000 dot com bubble for instance), note that there is negative divergence on MACD and RSI well ahead of the actual peak. We've barely hit the base camp to look at the summit. Does this mean there won't be major corrections in the future? Heck no. Volatility is going to ramp up along with inflation . That's the nature of the beast. Cheers & happy trading everyone.
SPY - November to PresentDouble bottom divergence on RSI today. Looking at all the reversals from pullbacks before, this is an excellent time to open a LONG position in the SPY. Starting to see more of the same in my basket of stocks that looked pretty bearish the past few days. Loving that long term MACD trend line. Average volume spikes are not losing their intensity, but they're losing their duration. This tells me that the market is warming up to higher highs. I would like to have seen a 10% pullback here, but it doesn't look like we'll get it just yet. Volatility just hit its long term upper trendline as well, further reinforcing what we see above in the SPY.
VIX - Positive ChannelSetups that looked beautiful on Tues/Wed were pretty much broken by Thur. We usually see this happen right before a major pullback in the market (5-10%). We got a fake breakout on the SPY as it gapped up this AM. Sellers took control quickly and as I write this the market is retesting the flag it's been inside of the past week.
The VIX is printing a positive trending channel and it's showing lots of bullish micro trends within it. I've moved everything to cash for the time being and waiting patiently for a strong buy signal for volatility or go-ahead to purchase long. The setups I had been stopped out of are at a decent price, but I'm not seeing spring in the price action. A good quality 'low' price shouldn't give you much time to buy it. I've had ample opportunity to secure low prices over the past two days, and that concerns me.
This groundhog see's a few more days of clouds in markets...
LOADING UP ON TNA TNA which is the Direxion Daily S&P Small Cap 3x leveraged is an ETF that I just came across. I usually trade TQQQ and SPXL while carrying a small position overnight in order to mitigate my risk from daily rebalancing of the leverage ETFs. TNA has run up under 980% since the COVID - 19 sell off and is approximately 40% above its pre - pandemic high. I have heard that small cap stocks will lead the charge up or down before there's a market turn in the S&P 500.
I'm looking at two entry points for this ETF. My first entry point will be at $89.92 and my second position will at $71.32. Due to TNA being a leveraged ETF the goal is to take a small position relative to my account and potential day trade the TZA (the inverse) or TNA with a larger position. I am very bullish on the market and I am loving the pullback that we are experiencing. Based on past analysis, TNA hit a resistance and then pulled back towards a support at $71.32 before breaking through its resistance - and now support - at $89.92 creating a new resistance. The sell off from the resistance at $104.14 looks healthy but I am looking for a bounce off of $89.92 here. TNA is holding its 15 and 50 day EMA strongly after breaking below its 5 day EMA. I will cut my position and turn bearish on TNA if we break below the 50 day EMA. This is the first post that I have made and I am looking to create more whether my analysis is correct or wrong. Thank you in advance for any feedback that readers provide me with as I am looking to do this full time!
VIX - Hidden Bullish Divergence (Anticipate Morning Sell Off)RSI is printing lower lows while VIX is printing higher lows on the hourly. I expect we will see this play out with some red in the AM. If you're looking to go long at open, take caution. LONG VIX.
VXX - Little More Red in the MarketsTook a small profit on the VXX this morning after spotting hidden bullish divergence in the VIX yesterday evening. Opened a small position again on the pullback to support in anticipation of a small bounce the upper trendline of this descending sedge pattern. Holding off on opening long positions until this burns out tomorrow AM. LONG VXX SHORT market.
How to Trade a Scythe Pattern (SPY used as example)I see these all the time on 5-m charts. I attribute them to algos trading shares with each other. The way price action advances and declines (and the speed), leads me to believe computers performing high speed day trading with one another. That aside, be on the look out for them! They can sometimes be a wonderful tool to predict a large price movement in short time. I've included a 5-m chart of this pattern below. Refer to it after reading:
To trade the Scythe Pattern:
SHORT when you see this pattern after an uptrend or high (like the example illustrated below - SPY 2.17.2021), go LONG when you see the inverted scythe at the bottom of a downtrend or low.
I treat it as a modified cup & handle. I use the measurement from the base of the scythe beard (lower left edge) to the top of the blade (see rulers in image below) I regularly see this pattern break out above the tip (fake out) before ripping in a cascade fashion lower. Look for this pattern where you see price cascade on lower time frames (1-10m). The tighter the price action in the scythe blade, the more accurate the results. I have not tested this pattern on higher time frames, but I am currently doing so with some hourly/daily/monthly charts I've identified.
More often than not , I spot this at a high and realize that I should either avoid going long or open a short. This pattern wrapped up the trading session on 2/16/21, predicting the gap down to follow. Again, the dynamics of the scythe are much more clear on lower time frames. So add the scythe pattern to your tool chest and let me know how you like it.
Enjoy!
SPXL Dips below major support at 70.60
We saw prices closed below major support at 70.60 in the daily chart in Friday's session. It has failed two major levels so far. It held up above 73.40 for about 10 ten days before breaking down.
Critical levels to watch in the upcoming sessions are around 70.60 resistance level; it needs to hold at this level to head back up. Critical support is at approximately 66.30; prices could fall to this level if it fails to get back above 70.60
4th TIME'S A CHARM?When in doubt, zoom out. Sometimes we miss the forest for the trees when we fail to take a step back. Open your mind to a broader range of data. There's simple math working behind every trend, of every candle, on every timeframe. Make a habit of studying those monthly candles every so often. It will allow you to see things you previously hadn't.
Take a look at the wavetrend indicator at the bottom and the three touches that have occurred:
1st - Jan 2018
2nd - Sept 2018
3rd - Jan 2020
4th - in process?
I believe this month (jan 21) and the next (Feb 21) are critical to this trend and whether or not we blow through into a parabolic rage or we have another correction. Take note, however of divergences on monthly timeframes by scrolling out and looking back at the tech bubble as well as 2014-2015. Bearish divergences are worth paying attention to but it does not mean that the market will respond in the way you think. There may be a loss of momentum but price can still creep up for months or years.
I tend to think we'll have some volatility this month as well as the next but I'm not so sure I'd call a top here. We can creep up for months or years or even blast upward into a hyper bubble. I have other tools and indicators I use to look for major tops but I'm not so sure that I see a major top yet.
Let me know your thoughts and where you think price is going!
Kiss the ringWhich option will she choose?
The red or the green one, that is the question!
Interested in your comments.
ES - Inside the Triangle
15 Min Renko had all the information about what this market has been doing for the last two weeks - looks to be bouncing off lower trendline this morning.
We left behind a naked point of control to form this new pattern - we'll find out if it holds today or are we to complete the unfinished business at 3504.50
BULL WANDERING INTO A BEAR DENPRICE vs MOMENTUM forming a compression divergence. Notice the lower indicator and the trend on both sides. Price has been broadening the last few years while momentum/strength has been compressing. This is a hidden bull diverging into a massive bear divergence with the potential for a 3x touch here soon. Hidden divergences are historically weaker than regular divergences so the odds are in the bear's favor. We'll just have to see which one the CB's are rooting for.
Squeeze the Market
Market moved down overnight but then went nowhere today - Looking at the chart I'd we're actually going to move up.
I never use the TTM Squeeze Indicator - by John F. Carter but it does demonstrate how we had compression today of Bollinger Bands and Keltner Channels.
We right between two Virgin Naked Points of Control - this no accident, designed to confuse and perplex retail I'm sure.
Felt like the algos were selling the market as soon it started to move up - perhaps accumulation. Over 2 Million ES contracts and 1.65 MM one MES so good volume for sure.
The ETH (overnight session) will be right on top of today Point of Control - so this will not give us any clues.
We still at the top of channel I posted the other day. So we may end up with small move up and dump further down.
So up first but be careful out there.
Market is Balancing - For its next Big Move
At the top of trend line - looks like this upcoming coming week is down week.
Overall the market balancing for a much bigger move.
SPY - Wednesday, November 4Bulls showed up today. We've pierced thru a couple significant resistance levels in the past couple days. But will it continue? If we're going to go long at this point we want to see a big volume candle bust thru the cloud, pullback and bounce to continue the trend that's been developing over the past couple days. Momentum has been steadily rising over the past few days, which has made me want to put on my bull hat, but note the OBV divergence across the day. This is not what you would normally see when price is ready to break out. Momentum may be artificially propping these prices up. If you cycle down to the lower time frames, pay attention to when price action runs away from you, as it did in the last 5 minutes of todays trading session. There was some bullish buying, but the sellers aren't gone yet. Might need to range at these prices for another week while the VIX cools down before we see headway into the $440s, otherwise, expect a blowout top with a quick breakdown to the past week lows. The bounce at $335 was enough to get me to close my short position, but I still want to see some evidence that prices can hold at these levels before going long.
VIX/SP500 Price Action Air Pocket - Heavy Volatility Comingif you pull up a 2-day chart of the VIX and analyze price action using a 200 period MA, you'll notice that price action NEVER creates a pocket of dead space between its moving average and the price action (see turquoise boxes), except prior to a period of major/increasing volatility. I've highlighted the present anomaly as well as the 2007-08 global financial crisis. You'll find the same anomaly prior to all major crashes (dot com bust, etc.) After examining numerous stocks using a daily chart and 200 period MA, I see a LOT of downside when the market eventually corrects. I suspect Feb/Mar 2020 is a preview of what is to come. I also recognize that quantitative easing has created tremendous upward momentum since it was first started in late 2008. The recent market sell-off is evidence that no amount of QE will prevent the market from attempting to revert to its fundamentals.
Get Ready For November 3rd (S&P 500)Uncertainty will cause a minor drop. But things should pick back up as long as D.J.T stays president. This is how I'm looking to play things if you disagree let me know why I'd love to hear from you.
This is a MACRO trend analysis so I'm leaving some room for breaking news and price action.
[SPXL] And You Thought SPX Was Weak... 3D SPX Futures Freefall!You can speculate on future price, that's futures.
Speculating on the degree of future price movement, that's SPXL.
Not many people leveraging up 3x to bet on upside, SMA 21 can't even keep up!
This thing free fallin like full moon fever.
Next week should be fun B).
SPY - Up into Descending ChannelI know a lot of bullish investors want to call this a bull flag. But a quality bull flag has tight price action, or at least PA that doesn't meander. The tight descending price channel seems like a good place for price to return over the next few days. It's the only region where PA has been consistent (tight) in the past week or so. Anything above this channel seems like a strong short opportunity; anything below a countertrend buy. Still overall short, in light of increasing market volatility and other measures indicating this market is overbought.
SPY - Bearish Divergence Accumulation/DistributionI would not be bullish until we see this distribution wedge broken. Price action is misleading.
SPY/SPX - Road MapThe market tries to give hints about what direction it's heading by giving us pivot points. If we look back over the past couple months, we can see a point of confluence where price action looks like it got into a really bad accident. Immediately prior, it took a spill and formed an ascending triangle. The point of confluence is the juxtaposition of FANG (and similar stocks) and the other 99% of the S&P. FANG is flying high every day. The other 99% of the S&P (the dead weight) felt resigned to accumulate a nice steady upward trajectory (ascending triangle) -- you can see these patterns all over the index. The high flying tech stocks however, are a component of the S&P and they've made the index 'drunk'. Hence the the overly zealous breakout of the the ascending wedge. But the index is schizophrenic, it has two dichotomous identities. And we see that with the quick rise and fall of Apple paired with the steadily rising banks and manufacturers. With big tech taking a back seat, I think the S&P is reverting to the other 99%o of the index. Monday and Tuesday will tell if we see a bounce off of the top of the ascending triangle and further test of it's ascending leg. This is the image we expect of a market coping with a pandemic, social & political upheaval, and major unknowns (yet cautious optimistic) about the economy.
ES_F - Going into Monday 10/19Well at first I was thinking this was going to be a gap-up Monday, but I'm thinking we'll see a retracement in the AM followed by another slow, low volume trading day. The market seems ambivalent to buy or sell, given the pending deal in Congress. I'm net short; if I get closed out tomorrow AM, planning to stay in cash for the remainder of the week, or until we get another impulse wave out of the muck we're currently trudging through.
