AMD - Take Profits or Hold?

Many investors are going to have a tough time deciding what to do with their AMD holdings.  The monster hold of the last 16 months, going from $2 to $15 in a little over a year.  Many are hoping that AMD will run back up to its $42 range of several years ago and it may well do so but even with it holding the status of the number one investment stock play it has been showing weakness.

In the weekly bars chart we can see that this run is not much more than a third of its previous level shown earlier in the chart.  

Looking at the upper daily bars chart, however, it dropped out of its 16-month red channel on Thursday.  This happened back in November also and AMD recovered and regained the red channel but it was with the help of a fierce year-end push in the stock market.  However, this trendline failure in AMD is different because we are seeing the geopolitical risks on the stock market escalating at an alarming rate.  Anyone that got in at AMD's base at the $2 area and is now sitting on a six bagger will likely sell now.  Those who got in late will be less inclined to do so.

In the top right 210 minutes bar chart we see the year-end rally shown with the brown channel and the two-month horizontal move in the blue channel with AMD failing both.

Nonetheless, AMD has not only been the leading stock but also the stock market sentiment indicator for the past sixteen months and it seems to be turning sour quicker than anyone might have imagined.  

Trade well my friends

Alan

VIX at Major Pivot

Thursday afternoon, the VIX volatility index closed right at its two-year blue downtrend line.  

This blue line has been the absolute end of all sell-offs for the past two years.  If the VIX crosses this line it could easily move into the black channel which would be an unfriendly place for the stock market.  The VIX itself over the past two years has basically been a huge declining wedge which is a pattern that normally breaks out feverishly to the topside before the declining line meets the horizontal base line.  Since we are so close to that situation here, investors are concerned that there might not still be one more oscillation inside the narrowing point of this wedge.  

Anything could happen here, the blue line has actually been the point where the market has been rescued from big sell-offs over the past two years.  Maybe it will happen again next week, or it might not.  My gut feeling is that for the blue line to hold, there would have to be substantial easing of the geopolitical risks that are escalating currently.

Trade well my friends

Alan

SPY Getting Heavy

Looking at the SPY through three time views it has become apparent that it is starting to look heavy where it is now.  Viewing the bottom weekly bars chart it can be seen that the SPY reached up to tag the upper line of its eight-year red channel at the beginning of March and has been pulling away since.

In the upper left daily bars chart we see the SPY is starting to fall from the upper line of its sixteen-month black channel after losing the blue year-end rally channel a few weeks ago.  

In the top right 210 minute chart we see the SPY has established a declining shorterm channel shown in brown.  Investors will probably stay calm as long as the pullback stays contained in the 210 minute brown channel with frequent bounces within.

Trade well my friends

Alan

GLD the gold ETF Testing 6-Year Trendline

THe GLD (gold ETF) has reached a major decision point as it closed Thursday at its 6-year downtrend line.  

Last Fall, the GLD put in the second bounce up from its lower blue channel line establishing the solidity of this line giving it a better probability of piercing the six-year red downtrend line having established a double bottom at the lower eight-year blue line.  The GLD has a world of undercurrents from the gold spot market but nonetheless, the direction it takes at this trendline should have  a substantial inverse affect on the stock market.

Trade well my friends

Alan

XLF Banks ETF Being Watched Closely Here

The weekly bars chart below of the XLF (big financials ETF) shows a situation developing where market participants are examining it closely.  The XLF recently peaked at the upper blue line of its eight year channel.  

This past week the XLF dropped through the lower line of its eight year inner micro channel shown in brown.  Over the next few weeks if the XLF continues to decline, investors will be watching for a tradeable setup inside the 16 month red channel.  As well supported as the financials are on most days, it would be reasonable to expect the XLF to trade within the red channel for some time even if it ends up later falling to the lower line of the blue channel because of worsening geopolitical situations.

Trade well my friends

Alan

RUSSELL 2000 Closes at Triple Juncture

The IWM, Russell 2000 small cap ETF, closed Thursday at a triple trendline juncture.  

In the lower chart showing weekly bars, the IWM is sitting on the lower line of its channel going back to the 2009 low.  In the upper left chart showing daily bars, the IWM is sitting on the lower line of its 15 month climbing channel.  In the top right chart showing 210 minute bars, the IWM is sitting on the lower line of its 5 month horizontal channel.  

The broad market's trading the past week has been constrained as uncertainty builds as to how this triple juncture will resolve itself in the Russell 2000.

Trade well my friends

Alan