Archive for category: Chart Reading

$SPY Chart: 10 Fast Facts 11/23/14

23 Nov
November 23, 2014

 

  1.  The long and short term up trends in the market are both in place.
  2. This market has gone parabolic on a break above the 70 RSI. This is a rare outlier event to run so far with no pullback.
  3. This is currently a market for trend followers and momentum traders. Short signals have failed since the recent low was estabablished in October.
  4. The risk/reward is skewed strongly against longs at these lofty levels. This is a let profits run kind of market and not a great time to initiate new longs at these overbought price  levels. Much better odds on waiting for a pullback to get long if not already long here.
  5. The gap open and then close lower on Friday is the first sign of a possible reversal. The second would be a close under the low of day on the gap day.
  6. There are zero signs of a correction here, the bears have to battle for even a pullback with the buying pressure that is being exerted on every small dip.
  7. The low of the day on the gap up is the 1st level of short term support.
  8. The 5 day ema is the second level of support that lines up with the recent $206 break out resistance. 
  9. It is highly likely that selling deep out of the money puts is the highest probability trade here.
  10. I will be back on the dip buying side next week given the right opportunity at the 5 day ema or 10 day sma.

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20 Nov
November 20, 2014

 

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10 Fast Facts about the $BABA Chart

12 Nov
November 12, 2014

 

  1. The 5 day ema has provided end of day support for 18 trading days.
  2. The 10 day sma has provided support for 19 trading days.
  3. 8 days ago $BABA broke out above all time highs and never retraced.
  4. For the past 5 trading days $BABA has been in as $119.45 resistance / $106.48 price support price range.
  5. The first level of support is the 5 day ema. A close below that level will be the first danger sign of a trend reversal.
  6. The second level of support is the 10 day sma. There is a lot of danger below that level that $BABA has a deep correction to the $100 break out level.
  7. Current the RSI oscillator is useless to use for $BABA as monster stocks with institutional support have no long term resistance.
  8. All time highs are bullish and perpetuate more new all time highs. The danger is if the market as a whole pulls back leading stocks like $BABA will follow the larger trend in equities and retrace as well.
  9. $BABA is the stock that needs to be on every stock traders list for monster stocks to watch. Lots of potential with this one for a continuing up trend.
  10. Volume has increased during the break out and up trend as interest grows in this stock.

 

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10 Fast Facts About the $SPY Chart

09 Nov
November 9, 2014

 

 

  1. The long term and short term up trends are both currently in place with signs of slowing.
  2. $IWM and $QQQ index ETFs both spent last week forming a new high price base range that is bullish.
  3. The risk/reward ratio is shifting against the bulls after this fast run so far from the ‘V’ shaped bottom.
  4. The 5 day ema has been acting as the initial short term end of day support for the past 14 trading days.
  5. The 70 RSI level on the daily chart will indicate a high probability overbought level if we get there.
  6. The $SPY upward momentum has slowed over the past week with little progress being made after the $202.45 price level on Monday.
  7. The $SPY is extended far above the 10 day sma with good odds that the price revisits that line in the next week.
  8. 50-day moving average bouncers.
  9. New all time highs in this market
  10. State of the Market as of 11/09/2014 via Michael Lamonthe

10 Fast Facts About the $IWM Chart

28 Oct
October 28, 2014

 

 Chart courtesy of stockcharts.com

 

  1. The 50 day sma was broken and closed above which is a buy signal.
  2. The 200 day was broken and closed above today which is a buy signal.
  3. The MACD is bullish
  4. $IWM has been trading above the 10 day sma for 8 trading days.
  5.  The momentum has been incredibly powerful with the price range expanding upwards today.
  6. Six of the past seven trading days $IWM has finished higher than it started.
  7. The ‘V’ bottom has held since the bounce.
  8. Today was a huge break out of a trading range.
  9. The 62.90 RSi gives $IWM more room to run up.
  10. This chart is nothing but bullish signals. It will be a blind sided whip saw if this move up fails to continue.
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