GS Could Be Leading Again

Happy Holidays!

On Dec 8, 2012, I posted a video on the financial sector pointing out the possible upward price movements from some of the financial stocks. I have place the video below for those that wish to watch it again or for those that have not seen it. (The ETF is XLF not XLE as mentioned in the video. Click here if there is no video player on your screen.)





Recently, the financial sector has been one of the strength in the market and the sector leader GS appears to be setting up to lead this sector higher.  GS daily price chart (see below) shows how it moved rapidly to the price target of 128/129 projected by the multi-bottom  pattern made between Nov-Dec after it has broke above the 121 level.

(Click on the chart to enlarge.)

Now it is at an inflection point near the 129/130 level where there is confluence from the multi-year declining trend line and the support/resistance trend line (see weekly chart below).  This confluence could pose a minor pullback/consolidation before it resumes its upward move.  After GS breaks above the 130 level, it could continue to move toward the 174/175 price target with the possibility of encountering resistance near the 156/157 level.

(Click on the chart to enlarge.)

AAPL Review For 12/15/2012

AAPL has another down week.  Here is a look at where it might be headed.



Click on this link if you do not see a video player on your screen.

Disclosure: Long AAPL CALL

Market Review - 12/11/2012

Here is a quick review on the EFT for major market indices along with a look at the following stocks: AAPL GOOG IBM GS FFIV



Click on this link to view the video if you do not see a video player on your screen.

Disclosure: Long GOOG, QQQ PUT

Looking At GOOG Intraday - 12/8/2012

Here is a video looking at the intraday price actions and a clarification on the usage of the head & shoulder and the inverted head & shoulder pattern.



Click on this link to view the video if you do not see a video player on your screen.

Disclosure: No position on GOOG

The Rising US Dollar Effects

The US dollar reversed its decline and gathering strengths. Looking at the DXY (US dollar index) chart, this index could be heading toward 81.75 from the recent low near 70.50.

Conversely, the Euro started to decline from its recent high 130.13 toward the 127 level. If it fails to hold 127, it could fall to the previous pivot low near 125.90.

Similarly, the price of crude will fall as the US dollar rise. From the chart for the crude ETF, USO could drop to 29.50, where the spot price for light crude will be near 78 per barrel.

Finally, the price of gold could also fall along with other commodities prices. The ETF for gold, GLD could drop to 162 that mean gold could be less than 1680 per ounce. If it cannot hold the 1680 per ounce, it could drop to 1620 per ounce or near 157.50 for GLD.

A Less Obvious Pattern For GOOG

There is an invert head & shoulder appears to be forming for GOOG. But this pattern is too obvious and the market rarely reward the obvious. Here is another not so obvious pattern that could be forming for GOOG.



Click on this link to view the video if you do not see a video player on your screen.

Disclosure: No position on GOOG

AAPL - 12/5/2012

AAPL experienced one of its worst day. It loss nearly 7%, little more than $39. Watch the possible gap fill between 540/530. Here is a video reviewing the price actions and price levels.



Click on this link to view the video if you do not see a video player on your screen.

Disclosure: No position on AAPL

AAPL - 12/2/2012

Here is a review of AAPL after another volatile week that was mainly driven by the fiscal cliff news.



Click this link to view the video if you do not see a video player on your screen.

Disclosure: Long AAPL PUT

NFLX - 12/1/2012

Here is a look at recent price actions for NFLX and what possible trade levels to monitor for possible swing long.



Click on this link if you do not see a video player on your screen.

AAPL - 11/26/2012

AAPL finally filled the 574 gap made on Nov 7, 2012.  It has been up more than 86 points since it dropped to 505 on Nov 16, 2012.  One should not be surprise to see a minor pull back after such a quick and large recovery from its recent low.  Check out the video for details on some possible support and resistance levels to keep an eye on for the near term.



Click on this link to view the video if you do not see a video player on your screen.

AAPL - 11/16/2012

Today AAPL shows sign of capitulation and that could lead to a short term bounce.  Watch the video for more details.



Here is the link for the video.

Post Election Move

The US election is finally over and the market has returned to focus on the fiscal cliff and the Euro crisis.  Since the brief rally on election day, the DJI gave back 430 points (3.2%), the SP500 loss 48 points (3.3%), the Nasdaq 100 dropped nearly 97 points (3.6%), and the Russell 2000 loss more than 30 points (3.7%).  The week ended with all the indices closed below their 200 moving average.

Next week is another monthly options expiration week and expects increase volatility.  A dead cat bounce rally could appear before OpEx and this rally should not be bought until the market has clearly shown sign of a reversal.

Here are the charts for the market indices highlighting the possible resistance and support levels.

DJI

SP500

Nasdaq 100

Russell 2000

Pre-election Stock Play

As the US election is less than 2 days away, the market will likely be positioning for the probable election outcome. Depending on the election results, certain industries will benefit and others will not.

Here is a stock that is unlikely to be affected by the election results, Las Vegas Sands (LVS), a casino/leisure stock.

LVS appears to be forming a cup & handler pattern with a breakline near 47.60 and a measured move price target near 60. Watch the video for more details on the analysis.

Click here if you don't see a video player on your screen.



 Disclosure: Long on LVS

Trading With The Trend

To increase the probability of a successful trade, we need to know the current trend of the market and the stock (commodity, ETF, etc) we are planning to trade. If the market is in an uptrend, we should focus on long setups for the underlies that are in an uptrend, and when the market is in a downtrend, we should focus on short setups for going short on those underlies that are in a downtrend. If the trend for the market or the underlie is unclear, then we should move to the sideline until a trend can be identified.

On October 5, 2012, the market sent us a message that it has entered a downtrend by having the DJIA closed with a new non-confirm high and I posted this "We Need To Listen To What The Market Has To Say". In addition, on October 13, 2012, I posted an update on the market’s trend "Stock Market Review - 10/13/2012" when it reaffirms its direction. The market has definitely set off the alarm to inform us to tighten up our stop on the longs to protect our profits and preserve our capital. More importantly, it has alerted us to either move to cash or start focusing on short setups from the stocks (commodities, ETFs, etc) that are in a downtrend.

Here is an example of a downward trending stock, AMZN. In the first chart, AMZN price actions look very similar to the SP500 (SPX). It formed a double top, broken this price pattern’s supporting baseline on October 10, 2012, and closed below the 50 SMA (green) along with a declining 20 EMA (aqua).

The following chart shows AMZN established a downtrend by making a series of lower low/lower high.

Finally, the chart below shows the latest price actions re-affirm the downtrend by breaking the multi-month trendline, failed to move above previously broken support level, and formed another lower low that help define the downward price channel.

Until AMZN has reversed the current downtrend by breaking out of the downward price channel and made a series of higher low-higher high, one should look for short setups to go short after it has encountered resistance or broken support. When a stock is in a downtrend within a down market, the odd for a profitable counter trend trade is low. The odd for a successful trade is much better when we trade with the trend.

Disclosure: Long AMZN PUT

Beware Of Pre-Election Rally

The Market appears to be near a level where it can get a quick and short rally prior to the upcoming US election. As the SP500 has retreated nearly 5% from its recent 52 weeks intraday high of 1474.51, many Market participants are looking for a relief rally.

From the latest SPY daily price chart, if a relief rally is to occur, the SPY can bounce back up near the 143 level before it resume its current downtrend. The most likely support level for the SPY to test will be near the 138.50 mark.

The recent price actions from the QQQ seems to indicate it has found some temporary support near the 65 level and if a rally is to occur, it can possibly bounce up to the 66-66.50 region. 

 

The Dow Jones Industrials 30 ETF, DIA could bounce up to the 132 level before it resumes its downward move toward the support level near 128.

 

Finally, the Russell 2000 ETF, IWM is continuing its slide within a downward price channel.  It recently encounters resistance at the 92 level and could be heading down to retest the price channel lower trendline near the 80 area.  If it fails to hold support near the 80 level, then the next major support level for this ETF to test will be near the 76.

 

 

As the US election near, there will be a lot of portfolio positioning in attempt to anticipate the likely victorious presidential candidate.  As a trader, do not let these pre-election rallies trap you.  Trade the price actions, don’t trade opinions.  Wait until after the election and a winner has been declared, and then set up your positions.

Disclosure: Long SPY PUT & QQQ PUT