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Category: 2 – Technical Trader

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Chart Picks – Trading Range Death Trap Yields Two Picks

While the market averages edged to new highs last week, that’s deceptive as most stocks stayed rangebound. That’s a death trap for swing trades, and it depressed performance for a third straight week.

This Friday’s screens were bearish, with 12 buy signals and 28 sell signals. That suggests some downside ahead but so far in the pre market, the bulls are in charge. I liked the setups on two of the charts. One was a short xxxx (subscribers only). The other was a long, xxxx. I’ll add those to the list as of Monday’s opening prices. Charts below.

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Closer Every Day

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Cycle time and price projections suggest that the market is getting close to a high. But it’s not there yet. The 13 week cycle high is ideally due around xxxxxx (in subscriber report), with a projection of xxxx (in subscriber report). The 6 month cycle still seems to be in trending mode with a new projection of xxxx. The 10-12 month cycle is ideally due to top out within x weeks, with a new projection of xxxx.

On the third rail chart the market continues rising within multiple channels. Short term channel support rises from 4370 to 4405 this week. Additional multiple support lines rising from around 4360 and 4330 should contain any pullback. Major trend support is around xxxx (in subscriber report). Only if all of those are broken could is a significant reversal possible.

On the weekly chart, a possible target of this move is now at xxxx. The market would now need to conclusively break xxxx to signal a reversal.

Long term cycle projections point to xxxx with highs due between xxxx and xxxx.

On the monthly chart, the S&P 500 would need to end August below xxxx to signal a potential reversal of the uptrend. If the SPX clears long term trend resistance around 4500, the target would rise to xxxx in August.

The long term cycle momentum indicator remains bullish.

Cycle screening measures remain bullish, despite Friday’s pullback.

The chart picks report will be posted on Monday morning.

Technical Trader subscribers click here to download the complete report.

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Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Chart Picks – Dipping Two Toes in the Meat Grinder

The meat grinder tore up my picks last week, wiping out more than a month’s worth of hard won average gains. Attempting swing trades of expected duration of 3-4 weeks in a weakly trending market with lots of chop, is virtually a fool’s errand at this point. Day trading, or buy and hold, has worked a lot better lately. C’est la vie. C’est la marche.

History tells us that conditions in force tend to remain in force until they don’t. It’s market inertia. So I approach my short term picks at this point with high skepticism. I continue to dip a toe in the water with a pick here and, but no more than that, until I see signs of good performance. This week I saw two charts that I liked enough to add to the list. Both were in the agricultural sector.

This Friday’s screens were bullish with 55 buy signals and 19 sell signals. That suggests more upside ahead.

Get the newest pick and review charts of existing picks in today’s report. Technical Trader subscribers click here to download the complete report. 

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Prices Show Us Not to Argue with Mother Market

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All swing cycles are back in gear but only one of them has a projection. Meanwhile, we know that one major cycle is due to top out at any time between now and September. We’re on the alert for the signs from the indicators for that cycle (shown in subscriber report).

The market closed Friday at trend resistance on the third rail chart. That resistance starts the week at 4433 and rises to 4455. Clearing that line would indicate acceleration. Massive trend support lies between 4270 and 4335. That would need to be broken to signal reversal.

On the weekly chart, the SPX had a false breakdown from the uptrend line off the October 2020 low. The market would now need to conclusively break 4230 to signal a reversal on this chart. Trend resistance and a possible target of this move is now at xxxx (in subscriber report).

Long term cycle projections point to xxxx-xxxx (subscriber report) with highs due between xxxx and xxxx.

On the monthly chart, if the SPX clears long term trend resistance at 4410, the next target in July would be xxxx. In August, that would rise to xxxx (subscriber report).

The long term cycle momentum indicator remains bullish.

Cycle screening measures reversed their recent weakness. They have sent misleading signals in recent weeks. Price trends themselves must always be the finally arbiter of any trend analysis.

The chart picks report will be posted on Monday morning.

Technical Trader subscribers click here to download the complete report.

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Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Chart Picks – This Market is Hamburger

I often refer to rangebound markets as meat grinders for swing trading purposes. The more tightly rangebound they become, the more false signals are generated, and the more whipsaws there are. This market certainly qualifies. Last week’s list got ground to a pulp. All 6 picks had minor losses. Two got stopped out, and one will be dropped as of today’s open.

In the weekly market update, we saw a pileup of inconclusive data. Again, the trading range is both cause and effect of the lack of conviction by either buyers or sellers. The market hasn’t yet tipped its hand on which way it will break out. Both for the broad market indicators and the individual stock charts, the data simply screams for us to do nothing.

Last week, I even warned about that, despite a huge number of buy signals.

The enormous bullish spread on Friday would normally suggest thrust, and a new upleg, meaning that this rally would be likely to run for weeks. But, once again, I wasn’t impressed after eyeballing all 152 of the charts with signals. Most looked to be of the rangebound whipsaw variety. I didn’t see that many that appeared to be in an early upmove setup.

Unfortunately, I found 5 charts last week that I liked enough to add to the list. Blech.

This Friday’s screens were even-steven with 27 buy signals and 29 sell signals. Not only did the ambiguity show up on the list as a whole, but the individual charts were equally ambiguous. Lots of rangebound whipping, with little sign of either an up or down follow through. One of the charts even had signals in both directions.

In the end I only found one that I thought had a decent low risk, high potential reward setup. That was ….., and it was a short.

Get the newest pick and review charts of existing picks in today’s report. Technical Trader subscribers click here to download the complete report. 

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Here’s What Friday’s Selloff Means for Our Future

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Cycles up to 13 weeks probably turned down on Friday. However, the 13 week cycle still has an unmet projection of xxxx (in subscriber report) that can’t be ruled out unless the market breaks hard early this week. There’s not enough evidence that the 6 month or 10-12 month cycle have topped out either. A 10-12 month cycle high is due between xxxxx and xxxxx (in subscriber report). There are currently no projections on those cycles for the SPX, and a projection of xxx on QQQ.

There was less there than meets the eye in Friday’s reversal on the third rail chart. Support lines start the week at xxxx and xxxx and rise to xxxx and xxxx (in subscriber report). Breaking those would signal possible intermediate trend reversal. There’s another trendline running from xxxx to xxxx  that could also be support. It too would need to be broken for bears to get a foothold

On the weekly chart, SPX is hanging on to the pinnacle of a wedge. The negative divergence in the long term momentum indicator looks similar to the one that preceded the February 2020 top. A down week this week could trigger a decline to xxxx xxxx xxxx xxxxx. That’s the big boy they’d need to break to set off a possible bear market.

Long term cycle projections point to xxxx-xxxx with highs due between next month and sometime next year.

On the monthly chart, the upper channel line will be around xxxx at the end of July. A much longer term trendline represents support around xxxx in July.

The long term cycle momentum indicator remains bullish.

Cycle screening measures were weak again, continuing a pattern of negative divergence that become glaring last week. I have warned that this pattern was a warning, and now I’m warning that the warning seems ready to bear bearfruit.

Technical Trader subscribers click here to download the complete report.

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Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Where The End Stage Rally is Headed

Most cycles are in up phases or trending mode. Cycle projections range from xxxx-xxxx. Time analysis suggests that concurrent up phases should last xxxx xxxx (in subscriber report). A 10-12 month cycle high is due xxxx. There’s currently no projection on that cycle.

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The S&P starts the week at the top of a short term channel on the third rail chart. Trend resistance runs from 4373 to 4395 this week. Support runs from 4324 to 4345, with more important support starting at 4260 and rising to 4300. If the market stays between those lines, the trend status quo stays in force. An upside breakout would indicate acceleration. A downside breakout would suggest a possible change of trend.

On the weekly chart, the SPX has cleared wedge resistance at 4320 and is now taking aim at channel resistance at 4500. It would need a weekly close below xxxx (in subscriber report) to break the uptrend.

New long term cycle projections point to xxxx-xxxx (in subscriber report) with highs due between xxxxxxx and xxxxxxxx.

On the monthly chart, June ends with the S&P testing an upper channel line at 4280. That line will be around 4350 at the end of July. A longer term trendline represents additional resistance around 4400. A much longer term trendline represents support around 4185 in July.

The long term cycle momentum indicator remains bullish.

Cycle screening measures were notably weak, considering the broad market averages made a new high. They are barely positive, and ominous negative divergences persist. I have deferred to the standard price indicators. The weakness in the cycle screening numbers should be taken as a warning.

The chart pick list has been dead in the water. False signals have proliferated as the market has churned around new highs, with no broad strength. Despite a huge number of new buy signals on Friday, most appear to be the result of rangebound noise.

Technical Trader subscribers click here to download the complete report.

Subscription Plans

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Chart Picks – Tons of Fake Signals Are Mostly Noise

Since the last report two weeks ago, before our half-season break, four picks hit their stops. All were longs. Ironically, the only remaining pick is a short, and it has a minimal gain. I tightened the stop on it. For some odd reason, I suspect that it will get taken out. 😉

The current screen from charts as of the close on Friday, July 9, had a whopping 139 buys and 13 sells. Two of the sells were inverse funds, making the final score Bulls 141, Bears 11. But the kicker is that 7 of the sells were bond funds. There were only 4 equity sell signals out of the total 152 signals. That’s mind boggling.

I took a little vacation last week, so no weekly figures to compare. Before the break, they had been lopsided on the buy side. The market has made surprisingly little upside progress, given the surfeit of buy signals. There’s a lot of noise, and not a lot of direction in these signals.

The enormous bullish spread on Friday would normally suggest thrust, and a new upleg, meaning that this rally would be likely to run for weeks. But, once again, I wasn’t impressed after eyeballing all 152 of the charts with signals. Most looked to be of the rangebound whipsaw variety. I didn’t see that many that appeared to be in an early upmove setup. There were only 5 charts I liked enough to add to the list for this week.

Here are the picks I liked from Friday’s raw data. They’re all longs. The stop levels also represent no-go prices if the these long picks open below their stop.

Table in subscriber report.

This table summarizes recent list performance. Current charts of new picks are below.

Get the newest pick and review charts of existing picks in today’s report. Technical Trader subscribers click here to download the complete report. 

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End Stage Rally

Last week’s rally still left the appearance that the longer cycles are topping out. There are some warning signs that stick out like sore thumbs. But first, more upside. Here’s how much, and when to look for it to end.

Technical Trader subscribers click here to download the complete report.

Subscription Plans

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days!  

These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Note: Next weekend is the Fourth of July, with the holiday celebrated Monday for US business. In honor of that, and the fact that I’ll be doing a little traveling (Slovenia that weekend), and that none of you will be here either 😁, I will also take a few days off. Therefore, this report and the Chart Picks report will not be published next week. They will return as usual, in the early morning hours of Monday, July 12 from Krakow, Poland.

Now that I have my vaccination certificate, I plan to do quite a bit of traveling again. If you’re interested in travel, I post my better photos at Instagram.com/200daysineurope. Join me in my travels around Europe!

Chart Picks for the Week of June 28, 2021

Yet again, whenever I pick a few shorts to add to the list, the market smacks me upside the head. Fool me once, shame on you, fool me twice, shame on me. It’s like our permabear friends, whose names I’ll withhold out of respect for the dead, who have been warning for 12 years that the market is about to crash. They will be right one day. Well, every few months I’ll see a few short picks that I like and add them to the list. We’ll probably keep losing money on them, but one day, I’ll be right. You’ll see! 😆

Good grief, though. I’m beginning to wonder if this will ever end.

The list had an average performance of -0.2% on an average holding period of 6 calendar days, including a couple that got stopped out.  I’m adding two longs this week.

The current screen from charts as of the close on Friday, June 25, had 48 buys and 7 sells. Two of the sells were inverse funds, making the final score Bulls 50, Bears 5. I am adding two of the buys to the list for this week. They are highlighted in green in the chart below.

The bulls won every day last week, of course.  For the past 5 trading days, there were 244 buys versus 48 sells, a spread of +206. That’s the biggest bullish tilt since +218 on May 20.

But the character of this is different than the last two times there was a triple digit buy side advantage. Both of those rode the back of one big thrust day. This time it’s just been a steady roll higher. It feels like an end stage move, rather than an initial thrust.

Get the newest pick and review charts of existing picks in today’s report. Technical Trader subscribers click here to download the complete report. 

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