Archive for News
Market Update – Technical Analysis – US May16 2010
Posted by: | CommentsTechnical Analysis of the US Markets – SP-500
Well the market telegraphed the move down in mid-April with the negative divergences forming in the major oscillators and the market kept its promise.
But where to go from here?
Market Outlook.
The market is in a downtrend so it is important for us to build a number of potential scenarios.
To do this I have incorporated Fibonacci, RSI and a new tool called Volume at Price. Volume at price gives us a completely new way to evaluate volume, by enabling us to see volume not categorized into daily segments, but by looking at volume categorized into price segments.
Look at the chart.
Chart courtesy of FreeStockcharts.com Worden Brothers Inc.
We can see in the top pane, on the left hand side volume bars. The longer the bar the more shares were traded at that given price level. It is a really nice complement to our arsenal of tools. In this example we can see that the price level of 1,100 for the SP-500 was significant and undoubtedly will be again. Also the next major resistance point according to Volume at Price, is 1,060 which is very close to the February low. So as far as downside targets go, we could assume.
- A pullback to 1,100
- A further test of the February low.
- A further drop than these to levels would signify that we need to seriously rethink our contingency planning.
I will not be long in the market until the market tells me to. Right now the Price, the Volume and the Oscillators, on many time-frames are telling us to be careful.
Research I released in the Liberated Stock Trader PRO training tell us that Mondays are typically negative days, but in the last 10 years Fridays have been the worst day of the week. This we saw in evidence on Friday the 14th May. So we may expect further negativity Monday. But an expectation is never a certainty.
Europe unveils a $1 trillion package to stabilize the Euro
Posted by: | CommentsPrepare for a big positive day today as the EU & IMF underwrite a massive Euro stabilization package in an attempt to thwart contagion of the recent run on sovereign debt. As we know, governments can move markets and indeed are responsible for the health of the business environment through manipulation of Monetary and also Fiscal policy. Although the EU acted late in trying to arrange a bail out / emergency financing for Greece, it has now acted very aggressively to support the Euro currency. Expect at least a short term bounce in the world stock markets today. This show of strength should thwart what was starting to look like a 1987 style crash. If it succeeds it should ensure that the recovery from this fall should be swift.
In 1987 the SP-500 fell more than 28% in 3 months, so this move of -8% in 2 weeks is small in comparison. This week will show us if the markets are confident that Europe has done enough to thwart the speculators, and return confidence to the markets.
US Futures are up, most European markets are opening very strong and the MSCI world index rose 1.2% as I go to press. It should be a positive and interesting day. Prepare for big volatility in the coming days and weeks as the market contorts and gyrates itself trying to find sense in these turbulent times.
Market Update and Liberated Stock Trader PRO Training News
Posted by: | CommentsWell it has been a tough day on the markets today, with the NASDAQ-100 and the DJ Transports down over 3%, and the SP-500 and Russell 3000 down 2.38% and 2.5% respectively.
It still surprises me how well technical analysis works.
I posted a market update on March 30th (flagging the start of a negative divergence), April 27th (reinforcing the divergence) and on May 2nd stating “The significant update is that now the divergence of RSI 14 with a moving average of 14 on a daily chart is significantly negative for both the DJ-30, SP-500 and the Russell 3000.” The May 2nd Article is here
So I did try to warn you.
Liberated Stock Trader PRO Training Course will be launched next week.
The Liberated Stock Trader PRO Training & technical analysis course will be released hopefully next week. What a mammoth task it has been. But I am pleased to be able to share with you that the course will include
1. The Liberated Stock Trader Book
2. 16 hours of on demand video in high quality
3. Liberated Stock Trader PRO Mobile edition for the iPhone and iPod Touch
4. Exclusive workshops to support the training
I am really excited about it and I will be pleased to finally free myself from the shackles of my desk and take a brief break from writing, recording and teaching. No one told me that writing a book would cause me to gain weight. I need to start exercising again 
I will keep you updated.
Final word.
Volume has been increasing significantly since the start of April and the market is starting to turn down. As we know, price decreasing on higher volume is bearish, so now may be a good time to take a break and save your capital for the next move up in the market, whenever that comes.
To your success !
US Stock Market Analysis May 02 – 2010
Posted by: | CommentsAs regular members and casual readers will know, I post market updates when I believe the market is about to change trend. I do not see the point in a daily market update, as describing what is plainly obvious to the reader is an exercise in futility and painfully boring content will not impress our visitors. Instead I like to attempt to warn our members when there is a change in trend likely. As the market spends most of it’s time actually in a trend, it is these trend changes that are of critical importance, not the usual “oh it was a reasonable day on the markets, the Dow crept up 0.2% and the S&P 500 followed suit”
So here I am again writing another market update. Following on from my 2 previous market updates on April 27 2010 & March 30 2010, I highlighted potential negative divergences forming in the major market indices. The significant update is that now the divergence of RSI 14 with a moving average of 14 on a daily chart is significantly negative for both the DJ-30, SP-500 and the Russell 3000. Also MACD 10:30:5 has barely seen the light of day above the center line for the last 4 weeks. We have also seen 2 very negative days last week, on Tuesday and Friday, the likes of which we have not seen since the market wobble in January / February 2010. Also on the last 3 significant down days, we have seen this on increasing volume. In fact the last 12 days have seen increasing volume suggesting that there is significant action occurring at these price levels, making it significant.
The S&P500 has broken through its 10 & 20 day moving averages, the next target might be the 50 at 1165. The same has occurred on the DJ-30 with a 50 day moving average as a negative downside target of 10762.
S0, I warned of a potential downside move, and it seems to be occurring. We will see over the next 2 weeks the full extent of the markets indecision, just be careful with your portfolio.
Do not bet against a falling market.
Stock Market Analysis – 27. April 2010.
Posted by: | CommentsA mixed day on the markets yesterday, despite excellent earnings reports from such big hitters as Whirlpool and Caterpillar who echoed positive outlooks for the economy and future earnings.
Medium Term View
But how does the medium term picture look. Below I have a 5 day per bar chart stretching back to 2006. This shows us the last 4 years. What is extremely interesting here is the market is approaching is 200 bar Moving Average (white dashed line). You can see this is a significant area of support and resistance. In the chart in 2008, when the SP-500 finally capitulated and made its most violent of moves down, it did this after significantly breaking down through the 200 bar moving average.
We are now seeing the price line approach this area, and I believe make an attempt to break through it. A break of this line would in my opinion be very bullish and signal a clear continued move upwards. As always we would like to see this on increasing volume and with support form the other indicators.
SP-500 Chart of the Day - Image Courtesy Of Worden Brothers Inc.
Short Term View
We are seeing increasing volume on the S&P500 since the beginning of April which combined with this uptrend is continuing to give out a Bullish signal. As we know price up volume up is very positive indicating there is increasing appetite for stocks at higher prices.
So for now all looks good. Or does it?
There is one fly in the ointment. The oscillators. On both a 5 day chart and a daily chart the RSI 14 with a 14 day moving average is showing negative divergences. This also goes for the TSV indicator, ROC and Momentum.
However, price is the most important indicator and for now all seems to be rosy in the the garden of Eden. Just be careful not to lose to much of the profit you have made over the last 8 weeks, hoping the market will continue up. Have no emotion, trade the picture.
Market Update – US Dow Jones DJ30
Posted by: | CommentsThis market “refuses to die”,
What a rally! No matter what the bad news is, disappointing jobless claims, Goldman Sachs fraud investigation or even volcanic ash over Europe, the Stock Market participants are in good spirits.
Now I am not a “perma” Bear, but now is a time to be a little careful. We have just kicked off earnings season and things are looking positive so far. But lets be clear about this, we need an amazing round of earning reports, including revenue growth, not just earnings growth due to companies cutting expenses by making more and more people redundant. Why do we need a great earning season? We need it just so we can maintain these levels in the Stock Market.
The last time I checked the Price Earning of the S&P500 was at 21. Historically, a P/E of the major US indexes has not been sustainable over 25. In 2000 we reached a PE of nearly 45 on the S&P500 and we all know what followed. So, I would not say the market is at a huge discount today. However, there are still plenty of bargains.
Technical Analysis of the Stock Market
As I has discussed many times in the lessons on RSI / TSV / ROC / Momentum, we need to look to divergences of the Price & Price / Volume indicators with price. I believe we have one such divergence occurring with the SP-500, DJ-30 and the NASDAQ Composite.
RSI Divergence DJ-30
Now I am not saying cash in your chips right now, the market is in a short / medium term uptrend. Simply be on maximum alert and keep your stop losses tight.
As Charles Dow said…
“A trend is in effect until it gives definite signals of a reversal”
We do not have a definite sign of reversal yet. We have simply some early warning signals.
