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

Support And Resistance Using Moving Averages

As the price of a stock, a commodity or an index fluctuate, we observe certain levels where the price reverse its direction, and these levels are categorize as support and resistance by market technicians. How and what determine a potential support or resistance level varies.

One of the common techniques most technicians employed is the moving averages. There are a variety of moving averages being use for monitoring potential support and resistance levels. They can be exponentially weighted or a simple weighted moving average and their period can be as short as 3 periods to 200 periods or longer.

Since there can be unlimited number of moving average generated using different combination of weighting factor and period, how can one determine which moving average(s) to use? Unfortunately, there is no simple answer to this question. However, some moving averages have been popularized and are widely used. These moving averages are 10 periods exponential moving average (EMA), 20 EMA, 50 periods simple moving average (SMA), 100 SMA and 200 SMA. There are minor variations to these moving averages such as 9 or 13 EMA instead of 10 EMA, 21 EMA instead of 20 EMA, and 30 SMA instead of 50 SMA.

Although there are some commonly used moving averages, they are not 100% reliable for detecting support and resistance levels. If these moving averages are improperly followed and used without context, one can easily get whipsaw.

Here are some steps to take to improve the reliability of using moving averages for detecting potential support and resistance levels. First and foremost is to identify the current trend of the stock, commodity or index. Is the current trend up, down or sideway? If the trend is up, then look for potential support off the moving averages, and if the trend is down, then look for resistance from the moving averages. For sideway price actions, simply use the moving average to monitor for change is the price trend.

From the chart for QQQ, notice the support off the rising 200 SMA at point A and the supports off the rising 20 EMA at point B & C. These supports are all from the context of rising moving averages. If the moving average is falling, then one will be looking for resistance levels from the moving averages. The price encountered resistance from the declining 20 EMA at point D. At point E on the chart, the price is consolidating near the 200 SMA and finding support from the rising trendline. Will the 200 SMA acts as support or will the price move below the 200 SMA and this moving average become future resistance? What do you think? Do not follow moving average blindly. Apply them with context.

Post Earnings Report Price Swing For AAPL & AMZN

AAPL and AMZN are scheduled to report their quarterly earnings after the market close today. The latest projected price swing from the options market indicates a mininum of $32 and $19 for AAPL and AMZN respectively.

Here is a video taking a closer look at possible price swing levels for AAPL and AMZN,



and an update post earnings price move for $FB.



You can also view the video by clicking on this link. Disclosure: no position on AAPL, AMZN  & FB

What Price Level Will AAPL Go?

After reaching an all time high of 705.07, AAPL has retreated and gave back more than 13% from its high. Is this the correction for AAPL or will it go lower? Next Tuesday, 10/23/2012, AAPL will be announcing the highly anticipated Ipad mini, and then after the market closed on Thursday it will release its quarterly earnings report. These events will certainly bring some wild price movements. The key questions to be answered are "Will the Ipad mini be a game changer?" and "Will AAPL continue to deliver extraordinary financial performance?"

Here is a look at what took place in the week just ended and some possible levels to keep an eye on.



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

Disclose: Long AAPL PUT

Preparing For GOOG Earnings Report

After Thursday's close, GOOG will be reporting its quarterly earnings and the options market is pricing it to move +/- $40. Here is a look at possible post ER price targets.



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

Disclosure: no position on GOOG

GOOG Priced For Perfection?

GOOG is schedule to report its quarterly earnings after the market closed on 10/18/2012. Based on recent price actions, it appears to be priced for perfection. If the earnings report is less than stellar then a dramatic drop in the stock price should not be a surprise.



Disclosure: no position on GOOG

Stock Market Review - 10/13/2012

The market continues to pull back with increasing negative sentiments.  Ever since Oct 5, 2012 non-confirmed closing high from the DJIA, the market has headed down.  Although the SP500 is still holding on to the 50 SMA, breaking the baseline of the double top price pattern does not bold well for this index.  The nasdaq 100 and the Russell 2000 are under their 50 SMA with declining 20 EMA.  Having GOOG earnings report due out next Thursday after the market close and next week is October options expiration week, the market is bound to experience some wild price movements.  I will be very suspicious in the sustainability on any rally at this juncture.





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

Disclosure: Long SPY PUT & QQQ PUT

We Need To Listen To What The Market Has To Say

Here is what the market been telling us...



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

Market Is Playing Its Usual Game On AAPL

Here is a video depicting one of the possible scenario the market is playing on AAPL.



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

Dow Jones Industrial Made A New 52 Week High

Today the Dow Jones Industrial index made a new 52 week high, closing at 13610.20 eclipsing the previous closing high of 13596.93 made on 9/20/2012. 

The difference between today's new high versus the previous new high is non-confirmation from all the other market indices: SP500, Nasdaq 100, Russell 2000, and the Dow Jones Transportation.  This total non-confirmation is a sign of a market top.

On the  following chart, the yellow arrows highlighted the last high from each market index and notice the progression on dropping off from confirming with the DJI new high.

Until a major correction (trend reversal move) has occurred, I will be either on the sideline or on the short side.

Disclosure:  long SPY PUT

Market Continues To Consolidate

The market is still trying to find support. Unless the SP500 closed above 1450, the near term continue to look negative. Watch the video to see where the support levels for the market.



Interesting day for AAPL. It appears to have found some buyers near the 50 SMA...could be a trap for the dip buyers. Here is a video reviewing today's price actions.

Has The Market Topped Out?

The market has a very subtle way for signaling a change in its major trend direction. Sometimes it will set off the alarm using the Dow Theory and other times it will set off divergence amongst the market indices.

Recently, the latter was the method the market has decided to use for signaling it has reached an intermediate top and it is preparing to change direction. Here is a chart showing how the divergence occurred, notice the new 52 week closing high for the DJIA, SP500, Nasdaq 100 and the Russell 2000 did not occur on the same date.



Furthermore, the SP500, Nasdaq 100 and Russell 2000 have peaked before the DJIA reach its peak on 9/20/2012. This indicates the DJIA made a new non-confirmed 52 week closing high on 9/20/2012.

The Nasdaq advance/decline line and the daily net new high-new low indicator have also peaked on 9/14/201, days before the Nasdaq 100 index closed with a new 52 week high on 9/19/2012. By not having the market breadth indicators to confirm the new closing high is a sign an internal top has been made. Here is the chart of the Nasdaq 100 and its breadth indicators:



Similarly for the DJIA, the New York Stock Exchange advance/decline line and the daily net new high-new low indicator peaked on 9/14/2012 and the DJIA made another new 52 week closing high on 9/20/2012.



Notice how small the difference between the 9/14/2012 closing high and the 9/20/2012 closing high, it is only 3.56 points (13593.37 vs 13596.93)..subtle!

Although the market gave off various divergence and non-confirmation signals, it does not necessary mean an immediate beginning of a new bear market or a big sell off. But it does signal a major correction could be in the offing, and one should be very cautious on initiating new long positions and be very defensive on existing long positions. After the market has reached an internal top, a sudden change in direction can happen when it is least expected. Therefore, trade cautiously and defensively until the market establishes a new trend.

Is The Dow Theory Sending A Sell Signal

With lot of talk about possible sell signal for the market due to the non-confirmation between the DJT and DJI recent price level. The Dow Theory is based on the premises that as long as the DJT makes a new high along with the DJI, then the present trend will continue. But if the DJI makes a new high while the DJT does not, then this divergence between the DJI and DJT signal a possible market top.

Recently, the DJI made a new 52 week high while the DJT didn't even get above the previous peak which is below it last high.

In this video, I explain how to use the Dow Theory along with other market indices to detect a possible market top.



If you do not see a video player on your screen, click on the title for this post and it will take you to the blog page where you can view the video.

2 Consecutive Eventful Day

After today's AAPL Iphone 5 announcement, another big day for tomorrow. The Market is expecting QE3 from the Fed tomorrow. Will the Market be right, and will it sell off on the news? Check out the video for possible clues.

Here is the video on the financial.





And this video on AAPL and FB.




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

Disclosure: long FB

Is It Time For FB To Move Up?

Here is a video on FB, and some of the upside possibilities.



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

Disclosure: long FB

Video Posted During The Weekend of 9/8/2012

Here are a few video posted during this weekend on the market and some stocks to watch.

If you do not see a video player on your screen, click here to watch the video.

Some stocks to watch IBM GLD SLV GS MS JPM ANF CHRW R



AAPL and the market continue to moving higher. SPX NDX DJI RUT



Video update price targets analysis for JNPR



CMG shorts being squeezed?



Some price targets for BAC and GS

BAC & GS - 9/7/12

Here are some price targets for BAC & GS. Watch the video for details.

Market Hit New High

Here is a video review of the market hitting new 52 weeks high



and another video reviewing AAPL and other stocks.

Market Consolidation Continues

The market continues to consolidate while AAPL is pulling back from its new all time high above 680. Watch the video for market review and AAPL price action review.



Click on the title if you do not see the video player on your screen.

A Web 2.0 IPO Breakout?

Here is a Web 2.0 stock that could have the potential of breaking out to the upside, Zillow (Z). Check out the video.

Price Levels To Watch On AAPL

Here are some price levels to watch for the next week on AAPL. Video posted.




If you do not see the video player on the screen, click the title and it will take you to the blog page to view the video.

Natural Gas & Coal

After a prolong downtrend, the natural resources sector appears to have bottomed. Here is a look at some natural gas and coal stocks.

Click on the title if you do not see a video player on your screen.

Market Show Sign Of Pull Back

The market is showing sign this uptrend is due for a rest. The SP500 and Nasdaq 100 printed a bearish outside day (engulfing candle). In addition, AAPL IBM GS and many other stocks are showing exhaustion to the upside. But, gold and silver are breaking out.

Here are the video highlighting today's price actions and the possible support levels.

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

Market Review & Outlook - 8/20/2012

Here is a video reviewing the indices and some of the market moving stocks: AAPL GOOG AMZN IBM GS MS JPM MU NVDA SNDK GLD SLV

AAPL Breakout

AAPL finally broken out and took out the previous all time high. Looking at the head & shoulder or the cup & handler price pattern, the measure move is pointing toward 700+ level. Watch the video for more details.

Caution Flag For The Market

So far for the month of August, the market has been trending higher and getting near the 52 week high made in April of this year. But, the market is putting up a caution flag as it attempts to make a new 52 week high.

Here is a chart of the SP500 showing the Advance/Decline line is confirming the upward trend as the index and the A/D line both trending higher. The caution sign for the SP500 is the lack of expansion on the number of new high as the market is getting close to the 52 week high. This uptrend could come to an end unless the number of new high starts to expand.



For the Nasdaq, the caution sign is more concerning. Not only the number of new high is not expanding as this index is approaching to breach the 52 week high, the A/D line is showing a negative divergence.




Until these technical cautions have been resolved, tighten up the stops and be patient on buying dips.

Mid-week Update : 8/15/2012

Video Posted.

Stocks On The Move Video

Here are couple video highlighting some of the stocks and ETF on the move.

Market Continues To Move Higher

As the US economy continues to limp along with the backdrop of unresolved Euro zone financial meltdown, and a slower growth China, the market continue to move toward a possible new 52 week high.

The SP500 has been chopping higher and now it has reached the 1406 resistance level. The rising 20 EMA, 50 & 200 SMA, and a higher MACD are providing technical strength to help push this index toward a potential new 52 week high.



The Nasdaq 100 is also coming up to test the 2750 resistance level. Having a rising 20 EMA, 50 & 200 SMA, and strong rising MACD, it appears it will likely break the 2750 resistance and move toward a potential new 52 week high above the 2795 level.



The DJI is only less than 160 points from a new 52 week high.



The Russell 2000 is the only laggard amongst these major market indices. But if it breaks above 810, then it could be completing and breaking out an inverted head & shoulder, and this could potentially lead to a much higher level than the 52 week high near 848.



Even though the market has been moving higher, there is still a high degree of skepticism on the recent market rally. But the technical picture is clearly indicating the market want to head higher.

Market Movers To Watch

Here is a video reviewing AAPL, GOOG, AMZN, IBM and PCLN price action.

Market Recap - 8/4/2012

Here's a video recapping the market activities and what to expect for the coming week.

Another Round Of QE Is Coming?

The market is appear to be pricing in some kind of easing from the Central Banks. Here is a look at some of the sectors that can help move the market higher.

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

Market Recap - 7/28/2012

Here is a video reviewing what the market did and what to monitor for the coming week.



Click on the title to view the video if you do not see the video player on your screen.

AAPL Missed...Could Drag Down The Market

AAPL reported disappointing earnings after the close today and the stock got hit in after hours trading. If it can't hold support at 567, the recent low near 522 could be tested again for possible support. Unless bargain hunters step in, the market could be dragged down by AAPL price actions.

Click on the title if you don't see the video player on your screeen.

Possible Signs Of Weakness

Market is showing some signs of weakness and some divergence. Could be a signal to a possible correction. Watch the video.

GOOG Post Earnings Report Target

Here's a look at what the options market is pricing GOOG to move after it has reported earnings. (Video Posted)

Market Review - 7/18/2012

Here is a look at the market indice and some of the stocks that moved the market for the day.

Video Posted Prior To Market Open

Better late than never...forgot to post these video on the blog. Here they are..

Earnings From Market Movers

Earnings report from some market moving stocks and OpEx week will bring volatility to the market next week. Here is a video looking at GOOG, IBM & GS.

Stock Watch - 7/13/2012

Here's a quick look at AAPL, GOOG, IBM and others before the market for trading today (video posted).