Category: Trading Articles

$SPX- 2042.89 target hit

We hit but did not confirm 2042.89- see the following 3wk 5min chart.

Read more: $SPX- 2042.89 target hit

  • Written by Gary Caumont

Category: Trading Articles

2089.12 short term target Update 6/18/16

If bears are serious they'll come down to hit 2089.12 tomorrow- see the following 17day 10min chart.

Read more: 2089.12 short term target Update 6/18/16

  • Written by Gary Caumont

Category: Trading Articles

AMZN- 681.88 primary target Update 6/5/16

AMZN hit a 681.88 primary target we made back on 12/2/15- see the following 19wk 2hr chart.

Read more: AMZN- 681.88 primary target Update 6/5/16

  • Written by Gary Caumont

Category: Trading Articles

S&P 500 300 point range

Market is under long term distribution - not consolidation

Primitive man made binary decisions. Hungry? Eat. Fearful? Run. Tired? Rest!

Modern traders exhibit the same binary decision making. Buy or sell. Fear or greed. Win or lose. 

A look at the charts over the past couple years exhibits the same binary decision making. Up or down.

The classic technical analysis read of such action is that of either consolidation or distribution. The former is a good things for those with long inventory. The latter bad. But which is it?

Usually one looks to volume characteristic to try and tell and though many complain that volume is so light now, a look at the volume across the past 17 years shows that this simply isn't true. Volume now is just as heavy as it was in the entire 2000-07 period. It's only if you compare to the 2007-09 crash that volume looks tepid.

S&P 500 volume over past 2 decades

What does appear to be true though is that volume did taper off on the last part of the massive advance from late 2013 through the middle of 2015. Lighter volume in the late stages of an advance usually is a sign of distribution - not consolidation.

Some say that volume’s disappearance from 2013 through 2015 means that there is all this money on the sideline just waiting to rush back in. Folks, if that were true we would have seen it by now. That money has already found a new place to play.

Others say that the lack of volume is because the dark pools have siphoned off a huge percentage of the trades. That seems doubtful as well. The simplest explanation is that the market has more risk than it has reward at this juncture so why take that kind of risk at this late date?

The one theory that we don't hear a lot about is that volume has diminished because more and more people believe the game is rigged. They believe that Wall Street is rigged just as they believe that life’s rules are rigged. We see that clearly in the primary presidential voting this year where the most prominent feature is anger from both the left and the right.

Although we don't have outright failures just yet in the indexes, we do have a clearly identified 300 point distribution range.

S&P 500 300 point range

We also have a growing list of sectors that have transitioned their long term trends from bullish to sideways. With an increasing number of sectors there is an increasing probability that this market is not going to move substantially higher any time soon. The list includes transports, financials, broker dealers, auto makers, regional banks, pharmaceuticals and several others. This is not a passing phase. Trend transitions on the monthly charts - especially when they include a broad number of sectors, is not a bullish situation. If anything it calls for a long period of technical repair. In the worst case, it argues for worsening price pressures to come.

As I have commented frequently for a long time now, the world is a mess. It’s upside down – literally. The best examples of that is ZIRP and NIRP policies that have flourished for almost a decade now. It’s evident in subpar growth and productivity rates along with debt binges that have no answer and it’s likely to continue to lead to subpar returns in the stock markets for years to come. If you think otherwise, you are likely to make a binary decision that goes against your best interest. The next few years is likely going to be all about selling what looks like strength and buying what looks like weakness until this 300 point range on the S&P 500 breaks definitively up or down and, when that happens, you simply ride that trend where ever it leads.

 

This article originally appeared on MarketWatch on May 18, 2016 11:38 a.m. ET

  • Written by LA Little

Category: Trading Articles

Microsoft Weekly

Three strikes and you're out

In America's pastime, three strikes and you're out. So is the market out now having fanned at earnings on the big three large cap technology stocks?

In the past three trading sessions the big three have all struck out on earnings. Microsoft and Google were caught looking last Thursday afternoon and Apple last night. Looking at the charts, all three are likely to mull around at lower lows at best and head even lower at worst. Here's the pertinent charts.

For Microsoft, another 7% loss still looks to be in front of this stock's future as seen here.

Google may get off a little easier with another 5 to 7% decline but if that area doesn't hold, then this could get very ugly.

Google Weekly

Last night, Apple totally struck out on all counts as top and bottom lines missed and then targets were lowered even farther on next quarter’s estimates. A dividend hike and buyback did nothing for the stock as it plunged almost 8% after hours. To understand where Apple Inc. is headed, you have to move to the monthly chart where a 14% loss off last night's close looks to be in the cards and if that can't hold, $74 to $77 could be the next stop.

Apple Monthly

These three stocks are a huge problem for the technology index and the market as a whole for as technology goes, so goes the market and these three behemoths represent roughly 29% of the NDX 100 weighting

NDX 100 Weightings

Looking back to last year, the NDX 100 was what held the market up - it was the driving force that led the market higher making new yearly highs before it finally fell back to earth. Unlike last year, now the NDX 100 is likely to drag the broader indexes down rather than holding them up.

NDX 100 Weekly

So if technology can't lead this market higher ... what will? That's a good question and one this market will need to find an answer for because for the next three months, these three stocks are not going to do the trick. In this case, with three strikes, the NDX 100 really is out! The swing trades are not in the indexes but in commodities and have been for a while now as I have described repeated for weeks and even months now in my free nightly broadcast.

 

This article was originally published on MarketWatch on Apr 27, 2016 10:43 a.m. ET

  • Written by LA Little