Tradesight Market Preview for 10/5/11
Reversal day? The ES was higher by 27 on the after recovering a gap down, the powering higher very late in the session. By definition, this was not at key reversal day because the prior day’s range was not engulfed but it was a very notable session none the less. Reclemation of the 1125 level would be the next positive for the bulls to build on. Wednesday, before the open, the ADP employment number will be released and should be very important for price action leading up to Friday’s NFP number.
The NQ futures tested but did not break the August low which keeps the chart technically stronger than the broad market futures. This could be a very important foundation of a reversal but keep in mind that a reversal isn’t a reversal until the follows through.
Multi sector daily chart:
Like we noted in the prior report the 10-day Trin has a TON of oversold energy loaded into it. This means that the tank is full up energy. Even if this is only a bounce rather than a reversal it could be very, very sharp.
The Dow/gold ratio has been moving in favor of stocks for the last couple of weeks. This could be an important source of funds where money rotates out of hard assets into equities.
The BKX was top gun up 4.5% on the day. This was a very strong session but not a key reversal day.
The SOX is still hanging onto the trend channel. Note the active Seeker buy signal.
The BTK violated but settled well above the August lows.
The OSX was stronger than the broad market, closing up 6 points on the day. Note that the risk level from the Seeker buy signal was the exact low of the day. This will be a very key level going forward.
The XAU was the last laggard and the only major sector closing down on the day. The 0/8 Gann level at 175 is key support.
Gold:
Gold
Oil:
Stock Picks Recap for 10/4/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, NVDA gapped under the trigger, no play.
CAVM triggered short (with market support) and worked:
CIEN, QLGC, RRD, HGSI, and LBTYA all gapped under their triggers, no plays.
BRKR triggered short (with market support and didn't work):
In the Messenger, Rich's GMCR triggered short (with market support) and worked for a point:
His RIMM triggered long (without market support) and worked great:
BIDU triggered long (with market support) and didn't work, although it worked on a follow-up trigger:
Rich's FFIV triggered long (without market support) and worked:
AMGN triggered long (with market support) and worked enough for a partial:
Rich's DECK triggered long (with market support) and worked:
GOOG triggered long (with market support) and worked great:
Rich's CLF triggered long (with market support) and worked:
AMZN triggered short (with market support) and worked for over a point:
COST triggered long (with market support) and worked:
Rich's AAPL triggered short (with market support) and worked for four points:
In total, that's 11 trades triggering with market support, 9 of them worked, 2 did not.
Forex Calls Recap for 10/4/11
A terrific session. We closed out a 100 pip winner from the prior day and had two more clean winners. See EURUSD and GBPUSD below.
Here's a look at the US Dollar Index intraday with market direction lines:
New calls and Chat this evening.
EURUSD:
First, the second half of the short from the prior session stopped at A for 100 pips. Then, new trade triggered long at B, hit first target at C, note the specific use of VAH and R1 at D, raised stop under entry and stopped final piece at E:
GBPUSD:
Triggered short at A, finally hit first target at B, lowered stop in the morning and stopped final over entry at C:
Tradesight Market Preview for 10/4/11
The ES lost 40 full handles on the day, breaking below key support at the 1100 area. Note that the MACD is again rolling over after never being able to break above the zero line.
Below is a weekly chart of the ES with Fibs showing the importance of the 1125 area. Next support in this time frame is 1018.
The NQ futures decisively broke down out of the regression channel. This is not a new low on the move and a crack of the August lows will likely get downside momentum rolling.
Multi sector daily chart:
The put/call ratio is elevated but did not record a super-climatic reading of 1.30+
Our 10-day NYSE Trin is flashing an extremely oversold reading of 2.16. The only concellation for the bulls might be that the last time the Trin was this oversold it did produce a strong bounce in the SP.
The XAU was the best performing sector and did not undercut Friday’s low.
The SOX broke back down to the low of the trend channel. The close was just a hair above the prior low.
The OSX was much weaker than the broad market. Price is below the 0/8 Gann level with next support at the -1/8 level of 172.
After breaking down out of the rising wedge the BTK is at critical support. The August low is the last line of defense before the 0/8 level comes into play.
The BKX broke to a new low on the move. Next support is 31.25.
The XAL airline index crashed 10% and will bearishly frame shift.
Oil is hovering just above critical support:
Gold attracted money and was “short-term parking” today.
Stock Picks Recap for 10/3/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, ITMN triggered short (with market support) and worked enough for a partial:
CROX triggered short (with market support) just barely and didn't work early, triggered again later and worked great:
PENN gapped under the trigger, no play.
QLIK triggered short (without market support due to opening five minutes) and didn't work (also triggered again later and worked):
JOYG gapped under the trigger, no play.
In the Messenger, Rich's AAPL triggered short (with market support) and worked enough for a partial:
His CF triggered long (with market support) and worked enough:
AMZN triggered short (with market support) and worked:
FSLR triggered long (with market support) and worked but was in and out quickly on a spike:
Rich's EOG triggered short (with market support) and worked:
Rich's SINA triggered short (with market support) and didn't work:
His PANL triggered short (with market support) and worked:
COST triggered long (with market support) and worked enough for just a partial:
In total, that's 10 trades triggering with market support, 8 of them worked, 2 did not, but several just for partials under our system.
Forex Calls Recap for 10/3/11
Couple of losers but a winner that is still in play in the EURUSD. New calls and Chat tonight. Here's the US Dollar Index intraday with market directional lines:
EURUSD:
Triggered long overnight at A and stopped. Triggered short at B and stopped. Put them back in in the morning, triggered short at C, hit first target at D (look at how precisely those levels were used); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES and holding second half with a stop over S2:
Tradesight Seeker Example on Daily JCOM
I've been doing daily highlights this week of the Seeker tool in action in our Market Blog. The last two were about the Seeker in Forex on a 5-minute chart.Based on rapid gowth in the LED lighting stocks, in particular LED Hut,best place to buy led ceiling lights (one FX pair, and one the US Dollar Index).
Today, I wanted to back the tool out a bit and show it on a longer term timeframe, which is the daily chart. We'll use JCOM, which is a short idea today from a breakdown perspective, but already did a lot of great work with the Seeker.
Let's start back in August when a new Seeker upward count began. Here it is only 2 bars in so far:
Now, we achieved 9-bar status 7 days later:
The red line is thus the "Static Trendline" of the Setup count, which means that it is the lowest point during the setup phase, and it can be a "trade to target" if the stock reverses. The red line is $27.18.
Another note is that even though we got the 9, the lookback criteria for the setup phase continued for two more bars. Once that fails, the tool draws a dashed box around the whole Seeker setup, what I call "box completion":
The concept from here is that potentially, the high of the range of the box with a Setup complete is resistance. Energy has run out. You're looking to get short up in that area. There are a variety of methods to pick the exact entry (wait for a retest of the highs, go short if the stock breaks the low of a prior day, etc.). Any of these gets you short up in this area, and the stock continued to find resistance up there for two weeks:
Finally, it starts to rollover:
Note that in the process, a 9-bar setup to the DOWNSIDE is forming, which means that if we are short, a place to cover might be if we get the 9 bar down move, which would then suggest exhaustion to the downside:
What's amazing and shows the precision of the tool is what happens in the next few bars. The 9 count completes, and the stock reaches down to $27.20, two cents above the red Static Trendline, before bouncing:
Talk about a "trade to target."
Stock Picks Recap for 9/29/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, LNCR gapped over the trigger, no play.
ADTN triggered short (with market support) and didn't work:
In the Messenger, Rich's GS triggered long (with market support) and worked:
His JPM triggered long (with market support) and worked:
His AAPL triggered short (with market support) and worked:
His AIG triggered long (with market support) and didn't work:
His YOKU triggered short (with market support) and worked:
KLAC triggered short (with market support) and worked:
RIMM triggered short (with market support) and worked:
Rich's CMG triggered short (with market support) and worked:
His AMZN triggered short (with market support) and worked for a point:
His DECK triggered short (with market support) and worked:
TEVA triggered short (with market support) and worked:
GS triggered short (with market support) and did not work:
In total, that's 13 trades triggering with market support, 10 of them worked, 3 did not.
FOREX Calls Recap for 9/29/11
Lots of winners in the session, including additional calls for the European session since our first call went early. See GBPUSD and EURUSD below.
US Dollar Index intraday with market direction (once again, check out the Seeker counts and their predictive power):
New calls and Chat tonight.
EURUSD:
Triggered long early (half size) at A, hit first target to the pip at B, raised stop and it stopped in the morning at C:
GBPUSD:
Second half of short from prior day stopped in the money at A. New trade triggered long at B, hit first target at C, closed second half right under entry at D in the morning:
Another Tradesight Seeker Tool Example
I've talked to a lot of people lately who are impressed by the Value of the Tradesight Seeker tool. Although it is ultimately the red 13-bar counts that give solid buy and sell reversal signals, the reality is that you can often find key market inflection points from the green 9-bar setup phase.
Let's talk about the US Dollar Index. If you are trading Forex pairs, it's typically useful to watch the US Dollar Index. Our courses teach a variety of tools to watch the Index and monitor it's direction, which offers a "top-down" look at what to expect from USD-based Forex pairs at the time.
But how does the Seeker tool work on the US Dollar Index intraday, let's say on the 5-minute timeframe, which is my most-used timeframe? Let's have a look at the price action from Tuesday night going into Wednesday on it with our Seeker tool (and market directional tool, which are the various green and red lines):
Remember, green numeric counts, which must be in sequential order, are the Setup phase of the process. If you don't meet the look back criteria for all 9 bars, the count is erased, so on that chart, you only see the completed setup phases for the session. There were three.
At point A, the market had bounced a bit off of lows and approached the mid-point (red line) of the session. That completed count was exactly a top.
At point B, we had extended sharply to new lows. That completed count was exactly the bottom.
There were no more completed counts for seven hours until late in the Forex trading day around 11 am PST (charts in PST). Then we had another 9-bar setup count, which topped at C and was the high.
It is extremely hard to suggest that this tool isn't something that can put money in your pocket when you see it work like this on so many symbols in all asset classes and all timeframes.