Stock Market Viewpoint

Stock Market Viewpoint
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Friday, July 25, 2014

BONDS

Stock Market Technical Analysis Blog


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Tonight I would like to take a look at bonds.  The lower chart above is of the TLT (20yr bond ETF) with two rather large EMAs applied.  The upper chart is the S&P 500.  Both show 8 years of weekly bars trading.  Notice in the TLT bonds chart that each time the red line gets on top of the green line and starts pushing up from that green line, the stock market sells off and bonds rally as investors jump over to bonds for a while.  We are once again in that red/green EMA line lift situation in the bond market with all eyes on the stock market to see if history repeats itself.

Trade well  my friends

Alan

Monday, May 26, 2014

And NFLX

Stock Market Technical Analysis Blog


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Following up from my two previous blogs, where I showed how the QQQ broke through resistance Thursday afternoon and the Russell 2000 and AAPL broke through their resistance Friday morning; the chart above shows that NFLX also joined the party Friday afternoon, breaking up through the lower line of its mid-term channel.

Now lets see if these breakouts can sprout some legs.


Trade well my friends,

Alan

Saturday, May 24, 2014

Russell 2000 & APPL

Stock Market Technical Analysis Blog



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Following up from last night's blog about how the QQQ and Nasdaq's outlook is improving quickly, I would like to look at the IWM - Russell 2000 Small Cap Index which has plagued the Nasdaq for the past four months and also APPL, the 800 pound gorilla in the Nasdaq.


  • Chart 1:  Russell 2000, looking closely we can see that it has been contained in a very tight steep and well defined downhill channel the past four months.  It has tried four times to breakout and couldn't.  Friday was its fifth attempt and this time it actually broke out.  It's not hard to see why in that this last down wave found support at the lower line of its longterm channel.  If this IWM breakout follows thru Tuesday and Wednesday then the Nasdaq should be back in business.
  • Chart 2:  AAPL - for the past 16 months AAPL has been banished into the red line doghouse channel but Friday afternoon it broke up thru its upper channel line into its longterm blue line mother channel. If this APPL breakout also follows thru Tuesday and Wednesday then the key components, QQQ, IWM, & AAPL will be working together to take the Nasdaq higher and the odds will be in favor of going back to the March highs. 

The key words in last night's blog and tonight's is follow thru, it absolutely must happen.  This will be the bears goal line stand and if they see any weakness developing at all the tide could turn really quickly.

Trade well my friends

Alan

Friday, May 23, 2014

Could They All Be Wrong?

Stock Market Technical Analysis Blog



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If you have been following CNBC & Marketwatch.com over the past month, you know that virtually every prominent WallStreet technician and strategist has made detailed commentary predicting the stock market is about to take a fall of 10-25%.  These are people who make their living by being correct.  That is all fine but let's take a look at the charts where it can be seen that something else could already be beginning.

  • Chart 1:  the Weekly bars chart of the Nasdaq shows a symmetric triangle that started breaking to the upside this week.
  • Chart 2:  the Weekly bars chart of the QQQ, the driver behind the Nasdaq, shows an ascending triangle breaking to the upside this week.
  • Chart 3:  the 120 min bar chart of QQQ broke out of its short term channel Thursday much to the surprise of the bulls and bears (not to the surprise of Team Yellen, but that's another topic).  Going higher was not a consideration until the Thursday afternoon breakout because that upper QQQ channel line has been ruling the market very precisely and has been the token short play.  The upper breakout we see in charts 1 and 2 is the movement in the QQQ chart where I marked in the blue arrow on Thursday and its upper movement thru this afternoon.  
  • Chart 4:  Daily bars chart of QQQ shows what is being attempted, if they can just get the QQQ a little higher on Monday it will be back into its mother channel and a short covering frenzy could begin.   If it stalls where it is at, all bets are off and the market could get really volatile really fast.
  • Chart 5:  the S&P 120 min chart.  For the past several weeks the S&P has been a tool to frequently produce "new all time market high" headlines for Team Yellen.  It has been a bit of a dubious game in that you can let the S&P drop 10 points then squeeze up 11 points and create a new all time high, over and over.  The S&P is not what is moving the market now thru the SPY as it used to be. Numerous weeks ago they got control of it and they are maintaining this sideways channel to produce that frequent bullish headline.
Heads up folks...this may be a time to ignore what you think the market should do and must do and no doubt will do but instead have an open mind and take a look at what it is doing.  Thursday's QQQ breakout caused both triangles in charts 1 and 2 to begin their upward launch which measure high enough  to take the Nasdaq back to its Spring highs.  Nothing is a done deal of course, and any really bad news broadsiding the market could stall it but Team Yellen has proven to have the tenacity to take the market higher that is likely to surprise even Bernanke.  We are at record short interest levels now.  

To squeeze or not to squeeze?



Trade well my friends

Alan

Tuesday, April 15, 2014

Intervention is in...Barely

Stock Market Technical Analysis blog




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In the market today, we had a strong afternoon intervention to stop the bloodshed at least for a while.  

Chart1:  The Nasdaq slipped thru the red shelf line this morning but at midday they came in strong and drove it back up above the red shelf line for what is called a "hard test" of that line.

Chart 2:  As they drove the Nasdaq higher the VIX dropped below the blue Day 432 EMA line, but just barely.  I have shown many times thru the years how when the VIX crosses above that line the market sells like there is no tomorrow and the selling stops when we get back down below it as we did in the final hour today.   It would have been nice to close further below the line.

Chart 3:  Shows that S&P is building a base.

Chart 4:  The advance decline "rally trigger" chart where each time the red line crosses above the green line buy programs kick in widespread.  While chart 2 shows the selling has paused we still need for the red line to cross above the green in this 120min bar advance decline chart to start a rally.

Trade well my friends

Alan

Friday, April 11, 2014

Manic Monday or Intervention Monday?

Stock Market Technical Analysis Blog



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Looking at the Nasdaq tonight, the top chart is the 2 year view and the lower chart is the 10 year view.  Monday could be...pivotal?


Trade well my friends

Alan

Wednesday, February 12, 2014

Declining Volume Giving Market Pause

Stock Market Technical Analysis Blog





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In the market today momentum came to a halt as traders ponder the continuing declining volume. No one is sure if the Fed is willing or able to drive the S&P to retest the 1850 resistance level without investors joining in.  Everyone knows a good portion of the daily volume we do have is short covering but take that out and there isn't a whole lot of volume left which indicates no new long-side buying is taking place, simply the Fed buying and shorts buying to cover.  They might be able to keep it going but the past week and a half has been a 45 degree downhill slope in declining daily volume and the past two days have only been about two thirds of the 10 day average volume.  This doesn't mean that the market rally will stop, however, only that this is the Fed's market and Yellen is wanting to make sure her name is in all caps at the top.  

Trade well my friends

Alan