Dj30
US30, Nasdaq and SPX500 Heavy Selloff Coming?There is a probability of sudden 2000 points selloff in US30, Volume on Sell Days is Higher, SPX and Nasdaq have my GoTo sell patterns, US30 is Making Fish Top on 4 Hour Chart, Vix is Ticking Up Slowly. Crude is Fueling the rally but it looks like crude will also start to pull back.
Nifty Heavy Sell Off Coming?There is a possibility of sudden 700 points sell off in nifty, i can see some short patterns in nifty and bank nifty charts, there is also heavy PUT buying going on, VIX is ticking up, global markets are also suggesting a sell off, and INR is also not getting strong..
SHORT CRUDE FOR $36 Crude is at 618 retracement, Buying Volume is low, is hitting 288 MA on 4 hour chart, speculative positions are declining , dollar is at its lower channel, go short with the target of $36
Short Crude for $36Crude is at 618 retracement, Buying Volume is low, is hitting 288 MA on 4 hour chart, speculative positions are declining , dollar is at its lower channel, go short with the target of $36
DJ30 Divergence or Double TopNASDAQ and S&P500 gave reversal signals from their resistance levels. The same goes about DJ30. We have double top or bearish divergence as you wish. Any way it's a reversal signal with confirmation from RSI and MACD. DMI allows open a short trade. Entry level is below 18530, a stop order must be placed above 18590 and target near MA100. If price returns above MA50, probably we'll have a new buy signal.
LONG APPLE: $100 BREAKOUT? LOW VOLUME, VOL DEMAND & MA CROSSApple looks poised for the $100-101 level breakout
Volume:
- Volume has traded below the quarterly average for the past 10 days , consistent with apples post-Brexit bull run. Low volume is a bullish signal as it indicates investors do not want to offer their apple risk at current prices and wish to hold for further upside before increasing their offering.
- In particular yesterday volume traded 40% lower than the quarterly average at 23m, this bodes well for a bull run/ $100 break-out today as if new buyers with to get on the apple curve they must bid the price higher (and through the $100 level).
Volatility:
Whilst volatility isn't at the 12m lows that we saw at the end of may, IV has certainly came off somewhat from the Brexit highs at 30%, to trade currently at 23.77. This too, along with the low volume has been consistent with apples post-brexit bull run and continues to provide investors the assurance they need to fund further liquidity and push apple higher/ through the $100-1 breakout level.
- Historical Vol trades close to implied at 20%, once again providing a close to ideal buying environment (ideally HV is higher than IV for buying conditions).
Option Demand:
- Apple end of week option demand looks healthy, with there being a huge skew for apple topside options e.g. the 25 delta calls (101) trade at 17,500 contracts, whilst the downside 25 delta puts (98.50) only trade at 9,000 contracts - almost half. Given this skew in upside demand, this could fuel a apple breakout at the 101 level. Even at 102 there are 20,000 demanded at 13 delta calls vs only 12,000 demanded for 13 delta downside puts - so all in all this excessive bullish option demand could have a magnet affect as these prices are reach in spot as they come in the money and are brought causing a cascade of fresh demand from the option space.
Technical
- Apple 2-days ago broke out its second key MA resistance, which was at 98.69 and the quarter MA, this too is a bullish sign and provides downside support if it be the case.
- Apple trades in the middle of its +/-2 standard deviation channels which means there is certainly room for a topside breakout without any probability prejudice that may occur if it was close to the +2 SD channel which provides strong resistance - the +2 12m SD channel trades at approx 107 - this is a clear target for the apple breakout if it materialises.
Market sentiment:
- As we know the past 2wks have been strong risk-on sentiment with SP and DJ setting new highs by 1-2+%, though Nasdaq has lagged new highs but nonetheless broke-out from the 4600 resistance and has given tech stocks a fresh lease of life.
- Also Microsoft outperformed earnings expectations which no doubt will help give investors confidence about adding more apple to their portfolios or adding fresh positions going into apple earnings next week, since the two have revenue streams closely linked - Microsoft traded up 4% in post market yesterday, and in pre-market trades up at new highs of 56 - 5.44% on the day.
- Safe havens trade down quite aggressively today - gold, usdjpy and TNX - about 1% down on average, thus this is the perfect day for an Apple breakout as there is excess liquidity to be allocated to risk assets.
EURUSD Sell the Break Below...Bearish Flag is appearing on the charts, there are lot of euro data's in this week, we can sell the break below of the channel for 141 extension as initial targets...
EOW SUMMARY: RISK THE OVERALL WINNER - US30 & SPX @ 2% NEW HIGHSEnd of Week Summary:
1. On the week we saw risk outperform safe havens for the first time since the brexit vote and the SPX and DJ30 set new all time highs by 2% and 1.2% respectively - somewhat encouraging given this was the longest period post-crisis that equity indexes have had since new highs, with a total time of apprx 1 year.
2. Given the articles attached, this week was also the first week where risk-on/ risk-off positive correlations broke down and went back to some degree of normalcy, with Gold, Yen and bonds ending the week down some 5 - although the TRY Military Coup did cause some risk anxiety late on friday and caused safe havens to par some of their losses by 1% to close down apprx 4%.
3. Drivers of the risk-on rally i must say did come as a surprise, given the relatively subdued economic climate post brexit, with little planned risk-on drivers in sight. However, it was JPY's surprise talk from PM Abe/ BOJ Kuroda easing/ stimulus speculations at the start of the week (speculations around y10-20trn) that gave risk markets some legs - despite the reliability of the claims being denied by much of the JPY Govt though there certainly is no smoke without fire.
4. The other winner of the week was USD , much of which was safe haven demand on Friday (TRY Coup) but $ strength had built through the week on the back of hawkish FOMC speak sentiment (see attached) and risk markets rallying, causing rates to also rally (UST 10y averaging +4-5%) where all have contributed to increased market confidence which has translated into higher projected rate hike probabilities for their Sept/ Nov/ Dec meetings - currently at 12.9%/14.4%/38%, which is pretty much a 100% increase in expectations on the week.
- Once risk got going, given the severe depression, it was unsurprising that it did manage to run away higher - as safe havens needed a correction higher, if only in the short term.
Next week Projections:
1. Given last week, and most of friday, the obvious expectation would be to expect risk to continue on the offer and making new highs - however, late on friday afternoon we saw risk-on/risk-off balance tip in favour of safe havens as the TRY Coup uncertainty increased risk-off demand.
- Friday traditionally is a weak day for risk anyway as 1) end of week sellers/ weekend flat risk books cause a natural selling of risk, and a natural buying of safe havens as portfolios look to hedge weekend event risk over the two days that the markets are closed (especially as the session ended i the middle of the TRY coup).
- That in mind, i was surprised to see risk even trading better than safe havens on mid afternoon Friday at all (until TRY) - with Yen falling to 106.3 and goldd down 0.9%, i was confident that we would enter Monday with a risk-on tone.
Where is the problem ?The problem is that the market is crazy and too expensive.
Be carefull with a triple top
New All Time Highs in Markets Soon...We will see New All Time Highs in Global Markets Very Soon, (FTSE, Nifty are strongest indexes currently)
Top 4 Reasons...
1. 60$ oil by June
2. Q E by Major Central Banks
3. Delay in Further Rate Hikes
4. Accumulation on Dips
FED can take SPX 500 to 1700 by doing nothing....1. SPX 500 is making new highs as expected earlier, but this is not sustainable, if Central Banks will not give a rate cut or further QE then markets will undo all the gains.
2. My Sell patterns have started to show up in the charts.
3. SPX is making third mountain in weekly charts.
4. Crude is looking to go around $40 and Below.
5. Volume is not showing any Followup Buying.
The US30 break down break downSo after yesterday's pullback from the highs, I believe it has a long way to go yet before we see some price stability.
Here are a my reasons.
1. MACD showing crossover.
2. Close below upward trending line.
3. Extremely low volatility which may lead to spike in volatility as price picks up rocks on its roll down.
5. Not oversold.
6. Price bounding off contuously from Moving average Low 50.. A break below this and the price movement will start to pick up pace.
If you are long here, I'd be considering closing positions as brexit worries continue to increase.
APPLE: BULLISH VOL CROSS AND SUPPLY SIDE; BUT DEMAND DEFICIENCYVolume
Apple Volume traded up for the first time in 4 days on thursday, increasing 25% from 20m to 26m, whilst this may be considered bearish - as increased selling, it is important to not 26m is still 35%-40% below the 4wk and 6month average.
Volume cannot fall forever and we have been trading at extremely low volumes all week, so given these facts, a modest rise from 20m-26m is still bullish IMO given that apple traded at 46m last week, so even at 26m now we are still significantly depressed on the supply side - though the demand deficient problem of the recent times remained rife in the stock yesterday, where the stock fails to attract new liquidity, which is all the stock needs to ask the price up given the perfect, low supply environment apple is currently in.
Historical and Implied Vols
We continue to have a bullish view from a vols perspective as implied traded flat yesterday, up only 10bps at 21.02.
Also, a bullish cross pattern emerged between HV and IV, where HV is crossing lower then IV.
The shorter period 5/10 HVs are already trading below IV, but yesterday the 20/30 period HV also made a bid to make a move below IV in the coming days.
As i have highlighted from the last bull cycle on the graph, when the 4 HVs traded bid and started falling (to eventually trade below IV), Apples price was bullish, rising over 10usd, such interactions between HV and IV is historically highly correlated bullish behaviour. In april as you can see it was Earnings uncertainty that caused the relationship to unnaturally break down - in previous bulls, the HV < IV has allowed bull runs to continue for several months before.
Vol correlation with apples price also traded flat remained above the -90% and maintaining my bullish view with the indicator.
Evaluation
Much of same from apple, where we are witnessing a perfect "bull run" environment (low all round vols, low volume, low price) but the demand side remains the issue - likely due to apples poor mirco-econ environment of poor confidence/ fear regarding their future performance and the ever looming July Earnings, which is artificially keeping demand low for apple.
I dont expect any significant upside today from apple, given fridays are normally the worst day for stocks due to the "end of week" sell-off that occurs as some money managers cannot hold open risk on their books over the weekend.
IMO i expect apple to close 99.2, higher if we are lucky.
If we dont have a bull run soon, we may not see one until august, given that i expect apples price to trade low/ down in the 3 weeks before earnings as investors remember Aprils tragic sell-off and try to avoid a similar event (even if it is unlikely).
US30The DJ is in an awkward position and the figure ETE is to confirm the possibility of shorts is very strong even stronger than the LT we are in a potential triple top
US Index Idea - Currently ProfitablePosted this a few days ago.. posting two potential shorting opportunities. We have hit the 200MA on the 1h and the 50MA on the 4H chart. We may get a small bounce up here to start the week and then we will see if we can continue down.
Use low leverage and open trades with a small percentage of your account.
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DJ Transport to Range Trade for the rest of the yearLooking at support and resistance lines plus various moving averages, I would say the DJ transports is like to range for the rest of this year or until September.
After this time, this is when the market in general will make a decision about where the market is headed. My bias is for the downside.
At the current moment i'd say its a good sell to support.
Looking for signal to short this bloody equity rally?I have a solution. Use the moving average 50 period low.
Check the 4h chart on US30.
Insert a 50 period moving average low.
Insert support and resistance lines.
You will notice a couple of things, at the end of the last equity rally, it was profitable to short the market EVERY TIME once the price CLOSED below the 50MA. In other words you couldn't go wrong using this signal.
In the current rally, the MA50 has acted as a support EVERY TIME (along with upward trend). A close below this line will be a good time to sell based in historical patterns. A close below the upward trending black support as well will confirm selling signal.
We are approaching historical resistance and I'm expecting the price to fall below the MA50 soon - probably this week.
The rally has taken many scalps. Don't be cannon fodder. Trade wisely. There are many fundamental reasons why this rally should end, I feel that this rally is purely technical.
A look at the DJ Transports index to predict market directionThe Dow Jones Transports index is considered a good indicator of what the next move will be affecting the wider market.
The reason for this is because transports are a good indication of economic health. Lower patronage and goods moving means lower economic activity.
A few notes about the chart.
The orange line is the DJ30.
1. Looking at the first green flag in December we can see the start of the diverging indices that were previously highly correlated. The Transports drops off heavily in early December with the DJ30 following soon after, a month later.
2. The low of the Transports comes first and then rises. The DJ30 followed a month later with a low but that low is not matched by the DJ Transports. Again a leading indicator.
3. The DJ Transports spiked downwards on Friday but then regained its level. Should the indicator drop below the support trend again and close, the price could fall much further. If this is not matched by the DJ30, then divergence will continue to increase.
4. MACD indicator show crossover which is bearish. A fall below the RSI support level would confirm bearish direction.
5. It is possible the transports high was hit on the 21st of March. I'm expecting the DJ30 high to be hit within the next 20 days. Possibly as early as next week.
$DIA $DJIA bounces off of 1st Yearly Support. Yesterday the Dow Jones Index $DJIA $DIA found support right on the YearlyS1 Pivot point. This was the spot to cover remaining shorts and look for new short term long opportunities. That is what one of the Pivots we use at PivotalPivots.com
