Thursday, February 23, 2017

We Need A Breather In The Market

Might Retrace A Bit Here

By -



The channel resistance break at the open yesterday was a significant break, and there’s no short term reason to think that we are making a sizeable turn here. There is quite a lot of short term negative divergence here though and that might deliver a modest retracement. Double trendline support is currently in the 2356/7 area and if SPX can break below there is a possible gap fill target at 2351.16 or we could see another test of the current price floor in the 2340 area, a strong match with the ES weekly pivot at 2337.75. SPX 60min chart:
170222 SPX 60min
If SPX is still on a daily upper band ride then the upper band is currently at 2370 and we should see at least a close test of that today. That’s a decent match with short term rising channel resistance on SPX and one of the possible longer term resistance trendlines that I drew in on the hourly chart. SPX daily chart:
170222 SPX Daily
Looking at ES there is still an open 60min sell signal on there from last night though I was doubtful about the double top setup when I did the chart this morning, and the sideways chop so far today means that I’m disregarding 2347 as a target. That doesn’t mean ES can’t retrace some more though and the short term support trendline break overnight was a strong support trendline break. At the time of writing this action looks like some kind of bull flag forming and I like Stan’s 2351 target if we are to see any more weakness. ES Mar 60min (pre-market) chart:
170222 AM ES Mar 60min
At the time I did this chart this morning I noted that NQ had not broken the short term support trendline and it still hasn’t broken it. That’s currently at 2338 and without that break there is just the open 60min sell signal on the short side, which isn’t to be relied upon in an overall uptrend as strong as this. We may see a weekly pivot test if that support trendline breaks. In the absence of that break the short term trend is still up. NQ Mar 60min (pre-market) chart:
170222 AM NQ Mar 60min
TF broke short term support overnight and isn’t far from a test of the weekly pivot at 1396.30. We may see that test today. TF Mar 60min (pre-market) chart:
170222 AM TF Mar 60min
With the channel breaking up on SPX yesterday there’s no longer an obvious reason to see an imminent high here, though this uptrend is a strong terminal move that could top out at any time. Like a trend day though, while it lasts negative divergences and cycles don’t mean a lot and the only strong reference point here is the daily upper band ride. A failure over two consecutive days to test the daily upper band, now at 2370, ends the band ride and opens the middle band, currently at 2312/3, as a target. A confirmed daily close below the middle band likely ends the uptrend. In the short term the structure is strongly suggesting at least one more higher high, after a possible modest retracement here.


Stan and I are doing two free webinars this week at theartofchart.net an hour after the closes today and tomorrow. The first is the Big Five webinar today (rescheduled from last week) looking at AAPL, AMZN, FB, NFLX and TSLA. We’ve been doing some really nice work on these the last few months and these are all looking toppy here, so that should be interesting. The second tomorrow is a second webinar on ‘Technical Patterns You Can Profit From’ following on from the first one in January. As always the TA will be world-class and the subject matter will be interesting so if you’d like to see either of those you can register for one or both on this page here.

"Use Anthem Because We're A Monopoly"

Anthem Is Banking On Trump And Pence To Revive Merger

After delivering big money to President Donald Trump and Vice President Mike Pence, health insurance giant Anthem is now pressing the new administration to settle a federal lawsuit blocking its controversial merger with Cigna, according to new court documents. Meanwhile, Trump has appointed an Anthem lobbyist to a top legal post in the White House --…

Wednesday, February 22, 2017

China Continues To Take Lead On Green Business

China backs Australia's cleaner iron ore project

Chinese engineers who carved a railway through the Qinghai-Tibet Plateau and built the world's longest sea-bridge across Hangzhou Bay have a new challenge: developing a $3.4 billion project on Australia's remote Eyre Peninsula to meet increased demand for cleaner iron ore. China Railway Group Ltd, the world's second-largest infrastructure builder, is backing the mine, port and…

This Is Not Encouraging

Central bank injects more money into market

BEIJING - China's central bank made a net cash injection via open market operations for the third consecutive day Monday in an effort to ease a cash strain. The People's Bank of China conducted 170 billion yuan ($24.7 billion) of reverse repos, a process by which the central bank purchases securities from banks through bidding with…

Tuesday, February 21, 2017

Telecommunications (IYZ) Looks Promising

Things are a little slow at the moment and I think everyone can understand why. The price to earnings ratio of the market continues to get out-of-hand with a lot of index stocks moving sideways. In the larger market a little pullback is expected (Elliot Trade Theory published a fantastic article on the subject) but among all this downward pressure Telecommunications ETF IYZ seems to be making in-roads for a possible rise with the EMA(5) crossing above the EMA(8). Looking at it's chart It entered a corrective phase just under two months ago. It's currently stuck in a downward channel with upward resistance at around $34.75. For me this simple EMA move signals a possible buy with a confirmation coming from a momentum indicator. The next few days will be critical, but depending on your appetite for risk a small purchase can be made now with another purchase after the break above resistance.

I Think He's Also The King Of Bankruptcy So This Isn't A Healthy Combination

'The King Of Debt' May Make The Deficit Look Bigger

The administration of President Donald Trump has planned to widen the appearance of America’s trade deficit, measured as total exports minus total imports, by changing the method used to calculate it. The new calculation would count items known as “re-exports” — products first imported into the U.S. and then transferred, unchanged, to neighboring countries — as…

Hahahahaha...Oh Wait, You Were Being Serious

Defense Secretary Mattis arrives in Iraq and makes clear the U.S. is not there to take oil

BAGHDAD — Defense Secretary James N. Mattis made an unannounced visit to Iraq's capital on Monday to reassure allies of the U.S. military's commitment to support the sprawling operation to recapture the city of Mosul from entrenched Islamic State militants. Ahead of the trip, however, Mattis made clear he did not advocate President Trump's oft-stated wish…

That's For Damn Sure

Marks: U.S. immigration ban the sign of a failed state

KALAMAZOO, MI, February 20, 2017 – While flying across the globe as an international recruiter for a large Midwestern University, passing through countries and their immigration checkpoints is a frequent occurrence. It is hard to miss that every official at any U.S. Immigration checkpoint is big, burly, super-fit, and packing a gun. Entering the U.S. at…

Monday, February 20, 2017

Feels Like The Beginning Of World War One All Over Again

Against warnings from China, the United States Navy sets out for South China Sea

USA Today is reporting that the United States has deployed the aircraft carrier USS Carl Vinson to the South China Sea, the vital trade route and resource-rich waters in which China is building and weaponizing islands to claim as its own. The South China Sea hosts some $5.3 million in trade annually. According to the Navy,…

Sunday, February 19, 2017

Two, Tops For 2017

Central Bank Leaders Indicate Three Hikes, But Analysts Have Doubts

With Federal Reserve Chair Janet Yellen testifying Tuesday on the near future of the American economy and the central bank’s plans to maintain steady growth, many wondered whether she’ll follow through on a December suggestion that the Fed would hike interest rates three times in 2017. The Fed already announced it would back away from an…

Probably A Good Idea Since Russia Is Probably Going To Annex Latvia

Defence funding and terrorism to take centre stage at NATO meeting

Brussels (dpa) - Defence spending and the fight against terrorism are expected to dominate a two-day meeting of NATO defence ministers starting Wednesday, which will be the first meeting attended by the new US administration team led by Secretary of Defence James Mattis. All eyes will be on Mattis as NATO allies are seeking assurances on…

Saturday, February 18, 2017

Private Industry Continues To Take The Lead On Climate Change

HP Commits to Reduce Greenhouse Gas Emissions from Its Global Operations Another 25 Percent

After setting and meeting two successive Scope 1 and Scope 2 absolute reduction goals for greenhouse gas emissions (GHG)1, HP Inc. announces a new target to reduce the GHG emissions from its global operations by 25 percent by 2025, compared to 2015. The new target is a significant milestone for HP as it accelerates its commitment…

Could Not Have Come At A Better Time

China-Venezuela commission oversees refinery expansion project

CARACAS - The China-Venezuela Joint Commission on Tuesday is reviewing the expansion of the Puerto La Cruz refinery, according to Venezuelan Vice-President of Planning and Knowledge Ricardo Menendez. This plant, which was located in the northeastern state of Anzoategui and near the Caribbean Sea, has a current capacity of 129,000 barrels of oil per day for…

Friday, February 17, 2017

The Investment Flood Gates Have Opened And I Doubt They're Going To Get Closed Now

Iran: Trump Stance Won't Derail Foreign Investment in Oil, Gas

Iran's deputy minister for petroleum says the hawkish stance taken by U.S. President Donald Trump on the Iranian nuclear deal is a "passing hiccup" that should not affect foreign investment in the country's energy sector. Amir Hossein Zamaninia made the remarks Wednesday at the CWC Iran LNG and Gas Partnerships Summit in Frankfurt, Germany. Iran has…

I Want To Say Bearish Crude (USO), But Let's See How This Pans Out

Energy has been a general puzzlement lately. On the one hand OPEC is abiding to it's prescribed cuts and on the other the wheels of production are turning again on Shale Oil. Oil ETF USO currently finds itself in a declining channel which is bearish and a sell/short signal went in ages ago on New Years Day, but since then it's been caught in a bit of a range and not a whole lot has happened. To me this seems like a natural play: just wait for it to cross the support or resistance line. The news continues to be so muddled on energy it's best not to make a call at this early stage until the hand has been shown.

If You Ask Nicely Maybe They'll Buy The Rest Of The Country

Nation's investments creating thousands of new British jobs

The fast expansion of Chinese companies in the United Kingdom is creating local jobs at a time when Brexit uncertainties have caused unemployment fears. In addition to direct job creation, employment has also been boosted among supply chain companies as a result of massive Chinese investment, particularly within the infrastructure, property development and energy sectors. "As…

Fake News And Now Fake Money Is A Problem (Apparently)

Nigeria’s Central Bank Slams Fake Currency Claims

Nigeria’s central bank has denied claims by one of its former governors that 20 percent of the currency in circulation in the West African country is fake. In a budget hearing at the country’s National Assembly on Monday, Obadiah Mailafia—a former deputy-governor of the Central Bank of Nigeria (CBN)—claimed that the huge amount of fake currency…

Thursday, February 16, 2017

I'm Sorry, You Don't Put Up Walls, You Build A Longer Table

Cost of wall is less than cost of services for illegals: Report

If President Trump's border wall stopped just 10 percent of new illegal immigrants it would pay for itself by saving American taxpayers from spending money on services for those migrants over their lifetimes, according to a new report from the Center for Immigration Studies. The center, which advocates for a crackdown on immigration, said illegal border…

Wednesday, February 15, 2017

Safe Bet To Watch Biotechnology (XBI) Retrace And Just Buy The Dip

I made a brilliant "long/buy" call for Biotechnology ETF XBI about two weeks ago and it has since powered on to a critical resistance point, $69.00. This is the previous high from back in October I think is going to present a bit of a challenge because the way things stand from a technical standpoint, things are quite overbought. I do believe this will eventually climb above $69.00, but not after some retracement to about $66.00 or slightly above. If you didn't take advantage of the previous call I do believe another buying opportunity will come (a "buy the dip" scenario) so please don't fret. This plan however is aborted if it manages to break above $69.00 which will then become our new support. Otherwise what seems to be playing out here is an ascending triangle pattern.

Tuesday, February 14, 2017

This Is Going To Be One Hard Uphill Battle

China poised to defend against rising protectionism

BEIJING - As anti-globalization appears to be sweeping across world economies still struggling with slow recoveries, China is poised to defend its exports against escalating protectionism. "We do not want trade wars, but we will be well-prepared for and actively respond to any trade remedy measures from other countries and regions to protect the interests of…