Friday, August 30, 2013

Bonds, Interest Rates, and Commodities Technical Analysis

Bonds, Interest Rates, and Commodities Technical Analysis

This bond market update video covers multiple time frame technical analysis of the TLT etf as well as the 10 year and 30 year US treasury yields.  I give opinion on chart patterns and indicators of what to look for for trade and investment opportunities.

Also I discuss the correlation between interest rates and commodities and take a detailed look at a harmonic pattern on the DBC etf which is displaying a trade opportunity.

Some of the techniques such as price logic, divergence patterns , and reversal patterns are taught in my free stock analysis course.

Thursday, August 29, 2013

OEX Put/Call Ratio Still High and US Dollar Moving Higher - Possible Recipe For Further Declines in Stocks

NYSE Price and Volume
Click on Chart to Enlarge

The last 2 days have seen mild price gains on successively declining volume.  This is not the typical bottoming  reversal pattern in a correction.  For short term traders I view this as a new shorting set-up

On the option front the OEX put/call ratio remains high which is typical more bearish for the market than bullish.  These index traders have a "smart money" pattern of option trading which is to increase put activity as the market rises.

On the other hand, both the equity and total put/call volume ratios remain low and have had very muted rises on this 3.5 week correction so far.  For more confidence that a corrective bottom is near, I would want to see this ratio higher as measured by strategies I have shown many times before on the blog and in my free course.

Price action is the final say of analysis and so for a corrective bottom to occur and have some indication of a new uptrend we would need to see a higher high than the recent swing high on 8-26-13.  But understand from the recent videos I've made that the weekly currents on the technicals are only just turning down.  MACD is still above 0 and just confirmed a divergence pattern sell signal.  Stochastics has another 2-3 weeks still before possibly being oversold.  The parabolic SAR has not even triggered a weekly sell at this point.  So while on a short term basis the currents are modestly oversold and could sustain a multi day rebound, the larger currents are down and I think will likely continue to pressure stocks for at least a couple more weeks.

US Dollar/S&P 500 ratio
Click on Chart to Enlarge

I have not updated much on the US Dollar since it broke out of a triangle chart pattern in February.  And since that time frame it has had a markedly different correlation with the stock indexes than the consistent negative correlation for the last 4-5 years.  The chart above shows the ratio of US Dollar/S&P 500 which lets us at least monitor the statistical relationship between them and we can see from the green lines that when the dollar has spiked outside the bollinger bands have been when the significant corrections have taken place.  And notice that the ratio currently would need to see more dollar strength and stock weakness to bring the ratio outside the bands.

US Dollar Chart
Click on Chart to Enlarge

This chart is the US Dollar index itself.  Of note is that the recent correction took more than twice as long as the prior advance and has not retraced all the advance.  Also notice the divergence pattern in stochastics at the recent bottom.  These facts couple together suggest to me that the price logic is still favoring a bullish trend in the US Dollar.  Today triggered a daily SAR buy signal and so we may see some follow through to this rally attempt in the dollar.  What is less clear from the correlation at this point is what impact that will have on stocks.

Tuesday, August 27, 2013

Stock Market Technical Analysis 8-27-13

Stock Market Technical Analysis 8-27-13

This stock market update covers the QQQ and S&P 500 both daily and weekly time frames.  I review the price logic of the market and several indicators including stochastics, MACD, and parabolic SAR.  I expect that this market correction will continue further down from these levels before a sustained rally occurs.

For more FREE information on how to use "price logic" to understand market trend and trend reversals, you can check out my free eCourse which will help you become a better trader and analyst.

Click HERE for more info

Enjoy the video.


Monday, August 26, 2013

Non Confirmation in Stock Market Indexes

8-26-13 Stock Market Update

Check out a brief video I made today covering the probable meaning of today's non-confirmation in a move to new highs in the QQQ but not in the other indexes (DIA, SPY, etc.).

The video also covers total put/call ratio and the VIX and the clues they are potentially giving us.

Also this is a reminder that tonight at midnight the FREE TRIAL OFFER for my website services and education will close.

Click HERE to find out more.

All the best to your trading.


Friday, August 23, 2013

Bullish Harmonic Pattern Set-Ups in Energy Stocks

Earlier today I recorded a follow up video covering some bullish pattern set-ups in some energy and materials stocks.  This update looks in particular at undervalued stocks as measured by the price/book ratio.

I hope you enjoy the video.


New Trades Triggered Today

Just a heads up and reminder that there is currently a FREE trial offer on the Harmonic Trading Stock Selection service and the Integrative Harmonic Trading course that extends through August 26th.

Today 2 new trade orders were placed and one filled so far in the HTSS service.  The tickers are SNDK and FTI.  Currently you have an opportunity to see inside the service and follow the trades for 1-4 weeks depending on the service option you choose.  You can find more info by using the link below.

The current market environment is interesting in that commodities and stocks are running relatively independently right now and there are some very nice buying opportunities with many great patterns showing up in the energy related markets, and also there are a large number of short selling patterns that are ripe with several already triggering sell signals last week.

If you did not get a chance to watch the recent market update video and details of the services then click on the link below.

I hope you enjoy the video.  

All the best to your trading,


Wednesday, August 21, 2013

Stock Market Update and FREE Trial Offer

I recorded a new video today covering technical analysis of the stock market as well as several stocks that are perfect candidates for trading opportunities using the Integrative Harmonic Trading methodology.  

In this video I also give you an opportunity to try out my services for FREE for up to 1 month

The video specifically covers CAVM, TXT, PLCE, FSLR, BBRY, and the S&P 500.

  • What is the MACD indicator telling us?
  • What are the VIX and put/call ratios telling us about the current market correction?
  • If stocks continue to decline, how far can we expect them to go?

Find out answers to these questions in the video and get ready to learn some useful techniques for your trading.

Enjoy the video.

All the best to your trading,

Pete Birchler

Put/Call Ratios Still Tame

One of the reasons that I feel confident that this correction has more room to fall from here is that the put/call ratios have barely budged from optimistic level despite a couple down weeks.

total put/call ratio is still modest
Click on Chart to Enlarge

This chart of the total put/call ratio shows that the 5 day average of the put/call ratio is still a good ways from the 1.05-1.10 range that has been reached on the minor corrections since Nov 2012.  Despite a couple down weeks in the markets, the equity put/call ratio has peak at 0.65 in the last 2 weeks.  Even in the strong uptrend since Nov 2012, minor corrective bottoms have seen ratios in the 0.74-0.80 range or higher.

Given the seasonal weakness typical in Sept., the obvious technical sell configuration, and the lack of fear evident in either the VIX or put/call ratios, I believe we have a minimum of a couple more weeks of downside here until a multi week rally attempt occurs.

I would warn of the possibility of a swift move back toward or below the June lows from here.  I think we may see volatility jump over the next week or two.

Monday, August 19, 2013

Watching This Volatile Set-Up In Stocks

I have been vacationing for the past week or so and will provide an update soon.

In brief this correction that has begun in stocks looks to be legit and not be done yet.  Short term it is arguably oversold, but any brief rally should be looked at as a shorting opportunity on a trading basis.

There have been 3 consecutive closes outside the lower daily bollinger band on SPY with band expansion which is a volatile set up that will typically lead to one of two outcomes...

1) A bottom will form quickly creating a multi day rebound (or longer) attempt
2) The price losses become increasingly larger with corresponding volatility expansion.

The longest streaks of closes outside the daily bands in recent years is 7.  So we could see a rebound soon, but if we don't understand the possibility of a waterfall type decline from these levels down to the 155 level or lower on SPY.

Monday, August 5, 2013

Bearish Divergence Continuing to Build Here in SPY 8-5-13

SPY shows a bearish divergence on the 4 hour MACD
Click on Chart to Enlarge

This is a 4 hour chart of the SPY etf which shows the very sharp bearish divergence that is currently present on the MACD indicator.  Despite the typical breakout buy pattern that has developed here, I think the market could certainly still be topping here.  For those long on the breakout, I would suggest a stop below the July 26th low.  Based on the possible pattern structure at play, time is nearing its maximum likely extent for a completion point as indicated in a prior projection for a top in stocks.

The multi time frame bearish divergence on the MACD also continues to persist and has now added a daily time frame mild bearish divergence to the mix.  For multi week trading positions, I would suggest a break of the July 26th low as a possible short entry.  For investment purposes, the move down from May-June was an outright correction and should be viewed as key support for the uptrend in stocks.  A failure of this current breakout to hold followed by a move below the June low (red line and arrows on chart above) could signal the completion of a bull market top.