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Posts: 5,160
Reply with quote  #1 
2016-05-26 15:51:56 thespookyone: Good evening. Two things from me, if you will. First thing is, I love my job. I'm anxious to trade every morning. I'm totally "in the moment" while I do it all day-so I see a lot of helpful things I wasn't looking for. And this morning I thought of you Dave, and how I came to you many years ago looking for "a better widget". I was a profitable trader, and a pretty fine Ewaver. Unfortunately, as a stand alone tool to trade with it was about as much a weapon against the market as those small screwdrivers you adjust your glasses with. You sir, by teaching me internal mechanics, and their nuance, have provided me a louisville slugger to replace my old tool. I can never express how grateful I am for your teachings. (NO, I'm not going anywhere, just needed to say thanks.)
2016-05-26 16:00:09 fib1618: good day
2016-05-26 16:00:12 fib1618: how is everyone?
2016-05-26 16:00:34 thespookyone: Great, thx. I need a favor. I have a chart I really like on the daily FLS Since the pattern is upside down, I don't know how to read the volume correctly, to know if it's proper. Can you tell me how to read that volume on the daily, please? I'm pretty fair with patterns, but guess I never learned how to read volume upside down [smile]
2016-05-26 16:01:10 fib1618: Well...thank you very much're making me blush! [smile]
2016-05-26 16:01:35 thespookyone: You're the best in this field, without a doubt.
2016-05-26 16:01:42 fib1618: give me a couple of moments and we'll take a look at the chart
2016-05-26 16:01:49 thespookyone: thank you
2016-05-26 16:03:59 fib1618: OK...besides Lew's request...any other questions or comments before we get started??
2016-05-26 16:05:58 fib1618: OK...let's start with Lew's chart request on FLS
2016-05-26 16:07:23 fib1618: the basic key to volume is that it should expand in the direction of the path of least resistance
2016-05-26 16:07:37 fib1618: and it should contract during corrective sequences
2016-05-26 16:08:26 fib1618: the daily chart going back of February of this year shows a run up to just above the 200 day EMA in the middle of March
2016-05-26 16:08:51 fib1618: with above average volume confirming the break
2016-05-26 16:09:10 fib1618: now...with me, personally, I like to use a 34 day EMA for the average volume component
2016-05-26 16:09:31 fib1618: continuing with the thought
2016-05-26 16:09:55 fib1618: when we include the "insight" of a 20/50/200 EMA's to the mix
2016-05-26 16:10:09 fib1618: we also see that the 20 and 50 were still below the 200 in March
2016-05-26 16:10:36 fib1618: this would then suggest that much of the higher than average volume at that time was those who were the unwilling buyers helping prices push above this longer term resistance line
2016-05-26 16:11:08 fib1618: and the price pattern retraced in order for these two lower time EMA's to catch up
2016-05-26 16:11:35 fib1618: long as the daily volume does not exceed that of the top in March
2016-05-26 16:12:02 fib1618: this would then suggest that we're going to continue to firm...that there are, on balance, more buyers than sellers
2016-05-26 16:12:10 fib1618: and that the correction should be shallow
2016-05-26 16:12:23 fib1618: during this process
2016-05-26 16:12:40 fib1618: we also saw a sag in the 20 day EMA and it attempted to challenge the 50 EMA
2016-05-26 16:13:17 fib1618: and once this was successful (again it doesn't have to touch the 50 only snapback toward it)
2016-05-26 16:13:27 fib1618: prices then began the challenge of the March highs
2016-05-26 16:13:49 fib1618: and this time both the 20 and 50 must also move above the 200 in order to for the pattern to remain constructive
2016-05-26 16:13:51 fib1618: and...
2016-05-26 16:14:02 fib1618: you must have above average volume on the rallies
2016-05-26 16:14:09 fib1618: and below average volume on the pullbacks
2016-05-26 16:14:26 thespookyone: Wow, thanks much, very thorough, super take! Am I wrong to see a large inverted head and shoulders there?
2016-05-26 16:14:32 fib1618: not finished [smile]
2016-05-26 16:14:39 thespookyone: sorry
2016-05-26 16:14:41 fib1618: want pattern?
2016-05-26 16:14:43 fib1618: lol
2016-05-26 16:14:57 fib1618: wait a sec so i can pull this all together for you
2016-05-26 16:15:09 fib1618: we had a high on May 2nd
2016-05-26 16:15:38 fib1618: that again needed both of the EMA's above the 200 in order for prices to continue higher
2016-05-26 16:15:40 fib1618: and so
2016-05-26 16:15:45 fib1618: we pulled back again
2016-05-26 16:15:55 fib1618: but this time, with the 20 day already above the 200
2016-05-26 16:16:13 fib1618: this acted as a magnet for prices as it moved lower
2016-05-26 16:16:23 fib1618: and for prices to remain in and around the 200
2016-05-26 16:16:27 fib1618: also just below that
2016-05-26 16:16:29 fib1618: we had the 50
2016-05-26 16:16:44 fib1618: which acts as our intermediate support area
2016-05-26 16:17:05 fib1618: notice again...the below average daily volume during this pullback
2016-05-26 16:17:29 fib1618: it's very much like attempting to pass time so that the pattern itself can move into a bullish configuration so that it can trend
2016-05-26 16:17:36 fib1618: so in the last day or so
2016-05-26 16:17:58 fib1618: we rallied on Monday to the 20 day EMA
2016-05-26 16:18:14 fib1618: and then broke above it on Tuesday with increasing volume
2016-05-26 16:18:45 fib1618: and then on Wednesday we had a high volume break to the upside with both the 20 and 50 finally moving above the 200
2016-05-26 16:19:08 fib1618: so with today's pullback coming in at "below average"
2016-05-26 16:19:27 fib1618: this would instruct us that the pattern is now ready to rally to the upside...that the path of least resistance is UP
2016-05-26 16:19:44 fib1618: confirmation of this should come by Tuesday
2016-05-26 16:20:12 fib1618: and we should see daily volume come in greater the end of April for a confirmation
2016-05-26 16:20:19 fib1618: so you buy a little now
2016-05-26 16:20:55 fib1618: and then go "all in" with your specific allotment if it meets the criteria of a higher high than the end of April AND with expanding volume
2016-05-26 16:20:59 fib1618: pattern wise, and going back to February of 2015
2016-05-26 16:21:39 fib1618: we do have the components in place for an inverse head and shoulders
2016-05-26 16:21:59 fib1618: with high volume on the left shoulder
2016-05-26 16:22:03 fib1618: high volume on the head
2016-05-26 16:22:10 fib1618: and declining average volume on the right shoulder
2016-05-26 16:22:33 fib1618: so taken together between the ebb and flow of money as it pertains to price
2016-05-26 16:23:02 fib1618: the volume pattern is showing confirmation both in the area of supply and demand within the EMA's and the right shoulder
2016-05-26 16:23:37 fib1618: any break above the the late April highs then, especially with high volume, would provide an upside target of...
2016-05-26 16:23:58 fib1618: around $62
2016-05-26 16:24:22 fib1618: the pattern, overall, looks and is acting constructive
2016-05-26 16:24:31 thespookyone: Yes,Sweet!  you gave what I wanted, and more, [smile] Pattern on that inverted had me intrigued It's a fair sized inverted there... $62 is a fair pull from here
2016-05-26 16:25:05 fib1618: $62 is also horizontal resistance from early 2015
2016-05-26 16:25:11 fib1618: so it all balances
2016-05-26 16:25:18 fib1618: from this point
2016-05-26 16:25:32 fib1618: as long as volume expands on the up days
2016-05-26 16:25:37 fib1618: and contracts on the down days
2016-05-26 16:25:39 fib1618: the trend is up
2016-05-26 16:25:55 fib1618: you can play with the EMA time period on the volume
2016-05-26 16:26:05 fib1618: but 34 days works well
2016-05-26 16:26:14 fib1618: any other questions?
2016-05-26 16:26:25 thespookyone: July 50 calls are at 99 dollars. I took some 55's today at $13 for a moon shot.
2016-05-26 16:26:32 fib1618: [smile]
2016-05-26 16:26:42 fib1618: 55's are July as well?
2016-05-26 16:26:47 thespookyone: yes
2016-05-26 16:26:55 thespookyone: but, cheap
2016-05-26 16:27:16 fib1618: so you'll be looking to expand to another island after this?
2016-05-26 16:27:34 thespookyone: and I think in this situation, it may accelerate a bit, price wise
2016-05-26 16:27:41 thespookyone: I guess so LOL
2016-05-26 16:27:49 fib1618: well, at least you have time for this kind of forecast to happen
2016-05-26 16:28:05 fib1618: the whisper will come with any pullbacks
2016-05-26 16:28:18 fib1618: if daily volume expands on may want to lighten up
2016-05-26 16:28:33 thespookyone: cool, I'll listen carefully
2016-05-26 16:28:52 fib1618: if and when it should be able to pick up the rhythm pretty quickly
2016-05-26 16:28:59 fib1618: watch the EMA's
2016-05-26 16:29:08 fib1618: all these little nuances are important
2016-05-26 16:29:17 fib1618: they're like the dashboard of your car
2016-05-26 16:29:24 fib1618: each one tells you something different
2016-05-26 16:29:32 thespookyone: yes sir, nuance is everything
2016-05-26 16:29:34 fib1618: but all are needed to get you where you're going
2016-05-26 16:29:43 fib1618: OK...let's get SC up and get started
2016-05-26 16:30:06 fib1618: I lied...checking the BETS first
2016-05-26 16:30:33 thespookyone: Thanks very much. You know I play for singles and doubles-but I may try and get some wood on this pitch [smile]
2016-05-26 16:31:05 fib1618: sitting down?
2016-05-26 16:31:12 fib1618: +65
2016-05-26 16:31:15 fib1618: buy
2016-05-26 16:31:23 thespookyone: nice
2016-05-26 16:31:40 fib1618: again...we should remain consistent and take our cues from the final number on Friday
2016-05-26 16:31:49 mojave: last comment on patterns, if you put a - sign before symbol, SC will plot it inverse for you...
2016-05-26 16:31:57 fib1618: but to gain 40 BETS points in 4 trading days is impressive
2016-05-26 16:32:06 mojave: so -FLS for spooky
2016-05-26 16:32:28 mojave: {pattern perspective}
2016-05-26 16:32:55 fib1618: yikes...that would be confusing for me
2016-05-26 16:33:01 fib1618: but it's something handy
2016-05-26 16:33:08 fib1618: good for the TRIN
2016-05-26 16:33:16 thespookyone: thx Mojave!
2016-05-26 16:33:17 mojave: yes, VIX other stuff
2016-05-26 16:33:19 fib1618: or for P/C rations
2016-05-26 16:33:31 mojave: exactly, something in the toolbox [smile]
2016-05-26 16:33:41 fib1618: I've been a subscriber for 14 years and never knew...thanks
2016-05-26 16:33:50 thespookyone: me either
2016-05-26 16:34:02 fib1618: OK...let's see what we got to work with
2016-05-26 16:34:32 fib1618: after moving a bit higher on Wednesday
2016-05-26 16:34:41 fib1618: the NYSE CO breadth MCO moved slightly lower today
2016-05-26 16:35:02 fib1618: coming in with a reading of +12
2016-05-26 16:35:09 fib1618: looking at the components
2016-05-26 16:35:30 fib1618: and we see that they remain in a bullish crossover configuration
2016-05-26 16:36:00 fib1618: but the lack of strength here is allowing the NYSE CO breadth MCSUM to develop a "ledge" structure
2016-05-26 16:36:28 fib1618: something of which we were concerned about on Tuesday given the lack of leadership in the NYSE Composite breadth MCO
2016-05-26 16:36:51 fib1618: taking ruler to monitor
2016-05-26 16:37:18 fib1618: and we see that the snapback area for the recent upside breakout comes in at around the -15 level
2016-05-26 16:37:55 fib1618: a level that would also serve as a snapback to what the the highest failure point we saw in the pattern back in mid May
2016-05-26 16:38:10 fib1618: so if the Composite is still lagging here
2016-05-26 16:38:34 fib1618: our idea of seeing the MCSUM fall off its ledge is a real possibility on a near term basis
2016-05-26 16:38:53 fib1618: and moving to the Composite
2016-05-26 16:38:58 fib1618: we do have a small point change
2016-05-26 16:39:18 fib1618: so let's look for a dramatic move in the major market averages in the next two trading days
2016-05-26 16:39:29 fib1618: usually of around 1% or more
2016-05-26 16:40:12 fib1618: and here we see a textbook example of the formation of a ledge in progress in the NYSE Composite breadth MCSUM
2016-05-26 16:40:35 fib1618: and given that these kind of structures only lasts for no more than 4 trading days
2016-05-26 16:41:10 fib1618: unless the buyers pick up the pace, here and now, we're likely to see some sort of pullback by the time we get together again next Tuesday
2016-05-26 16:41:41 fib1618: to help to make such a determination before that time
2016-05-26 16:41:52 fib1618: if we look at the 21 day close up chart of the NYSE Composite breadth MCSUM
2016-05-26 16:42:50 fib1618: until the gap resistance zone, seen at the +800 level, is closed, than the market would be vulnerable in falling off the ledge
2016-05-26 16:43:04 fib1618: so there's a bit of work to do here near term to fight this off
2016-05-26 16:43:10 fib1618: but as we also know
2016-05-26 16:43:47 fib1618: ledges tend to form right before the end of a MCSUM declining sequence
2016-05-26 16:43:57 fib1618: this can be a move to +500
2016-05-26 16:44:02 fib1618: or it can go back to zero
2016-05-26 16:44:13 fib1618: all we know is that it's likely to be the final selling wave
2016-05-26 16:44:35 fib1618: and where we can then move into long positions with added confidence once the MCSUM turns up again
2016-05-26 16:44:45 fib1618: with the BETS at +65
2016-05-26 16:44:49 fib1618: if that holds into Friday
2016-05-26 16:45:07 fib1618: then we can go back to a more aggressive stance in our buying
2016-05-26 16:45:33 fib1618: and hope that prices pull back enough to buy at what should be wholesale pricing
2016-05-26 16:45:56 fib1618: while the majority tend to throw in the towel at any price
2016-05-26 16:46:07 fib1618: also helping our bullish confidence comes with the aggressive activity we've been seeing in the NASDAQ and NDX of late
2016-05-26 16:46:40 fib1618: along with the firmness in the MID and SML
2016-05-26 16:46:45 fib1618: again
2016-05-26 16:46:59 fib1618: the objective has been for a tradable bottom in early June
2016-05-26 16:47:16 fib1618: and as long as the pattern cadence remains consistent to that objective
2016-05-26 16:47:27 fib1618: we'll work with that until it's proven otherwise
2016-05-26 16:47:56 fib1618: looking at the NASDAQ price chart
2016-05-26 16:48:21 fib1618: and the momentum of thrust we saw earlier in the week is allowing prices to ride the momentum that's been created
2016-05-26 16:48:37 fib1618: and the pattern is now around 50 points below its target objective
2016-05-26 16:49:05 fib1618: also of note today is that the NASDAQ breadth MCSUM has now moved back above its zero line
2016-05-26 16:49:21 fib1618: but if we do see a pullback here based on the ledge structures in the NYSE data
2016-05-26 16:49:36 fib1618: then this zero line will be looked upon as providing least initially
2016-05-26 16:50:13 fib1618: the NASDAQ breadth MCSUM pattern is more attuned to that of a fishhook as opposed to a ledge structure
2016-05-26 16:50:32 fib1618: where the ledge shows compact posting with an elevated sequence
2016-05-26 16:50:50 fib1618: while the fishhook "turns the corner" before failing to follow through
2016-05-26 16:51:09 fib1618: and from where it gets its name as it looks like a fishhook
2016-05-26 16:51:37 mojave: good write up on fishhook a couple wks back by Tom McC.
2016-05-26 16:52:04 fib1618: and with the same sentiment outcome of those trying to get cute and leading off to the upside before there's enough support to allow prices to trend in the opposite direction is available
2016-05-26 16:52:23 fib1618: they get "hooked" in...and brought to shore
2016-05-26 16:53:10 mojave: fishhook description: {}
2016-05-26 16:53:12 fib1618: we also have a small point change tonight in the NDX breadth MCO
2016-05-26 16:53:18 fib1618: thank you
2016-05-26 16:53:32 fib1618: with the pullback attempting to find support at the +50 level
2016-05-26 16:53:43 fib1618: after having moved above this important level on Wednesday
2016-05-26 16:54:05 fib1618: looking at the 21 day close up chart of the NDX breadth MCSUM
2016-05-26 16:54:52 fib1618: and you can see the difference here between a pattern that would likely settle as a fishhook from that in which there is sufficient amount of money flow for the pattern to continue to move in this same direction
2016-05-26 16:55:13 fib1618: this also comes into play when the MCO, as it did on Wednesday, moves above the +50 level
2016-05-26 16:55:23 fib1618: so for the fishhook idea to be taken off the table
2016-05-26 16:55:37 fib1618: the NASDAQ breadth MCO must also move above this important +50 level as well
2016-05-26 16:55:43 fib1618: and if this can be done
2016-05-26 16:56:29 fib1618: this would then take the pressure off any performance problems for any structures that may look "ledgy" in their appearance
2016-05-26 16:56:30 fib1618: again...
2016-05-26 16:56:51 fib1618: everything must work together in order to reach a specific goal
2016-05-26 16:57:05 fib1618: take that away...and the market will sag with its bear market default
2016-05-26 16:57:20 fib1618: for now
2016-05-26 16:57:34 fib1618: the next technical objective for the NDX MCSUM is the +250 level
2016-05-26 16:57:38 fib1618: but between here and there
2016-05-26 16:58:22 fib1618: we have an itty bitty blip resistance area at the +200 level on March 10th to contend with
2016-05-26 16:58:24 fib1618: take that out
2016-05-26 16:58:30 fib1618: and the +250 level will go with it
2016-05-26 16:58:32 fib1618: and with that
2016-05-26 16:58:45 fib1618: the opportunity for prices to challenge the highs of last fall
2016-05-26 16:58:51 thespookyone: postings look pretty good there, no?
2016-05-26 16:59:00 fib1618: yup
2016-05-26 16:59:09 fib1618: we're expanding...
2016-05-26 16:59:15 thespookyone: yep
2016-05-26 16:59:48 fib1618: the SPX breadth MCO also pulled back today
2016-05-26 17:00:20 fib1618: but note in the 21 day close up of the SPX breadth MCSUM how this pullback has given the look of potential failure
2016-05-26 17:00:58 fib1618: with the gap resistance in the +650 area
2016-05-26 17:01:02 fib1618: again
2016-05-26 17:01:08 fib1618: until this gap is closed
2016-05-26 17:01:27 fib1618: which corresponds with the MCO lows of last Thursday
2016-05-26 17:01:40 fib1618: we will remain vulnerable to a bearish ambush
2016-05-26 17:02:12 fib1618: or at the very least...being swiped at
2016-05-26 17:02:28 fib1618: (and bear paws are pretty big)
2016-05-26 17:02:43 fib1618: (and have claws as we know)
2016-05-26 17:03:11 fib1618: the OEX breadth MCO failed at the +25 level today
2016-05-26 17:03:26 fib1618: and like the rest of the MCO's
2016-05-26 17:03:45 fib1618: is now going through the motions of snapping back to or towards its zero line
2016-05-26 17:04:06 fib1618: good news though with both the SPX and OEX MCO's
2016-05-26 17:04:16 fib1618: is that we did take out the mid May highs on Wednesday
2016-05-26 17:04:45 fib1618: so we have now accomplished some important objectives in the last couple of days
2016-05-26 17:05:02 fib1618: that help in reaffirming that the price lows of last week are important ones...blip resistance...the zero line...and the spike highs of April/May
2016-05-26 17:05:26 fib1618: the Dow breadth MCO also peaked out at a +24 on Wednesday
2016-05-26 17:05:46 fib1618: and the problem here is the lack of texture since last Thursday's low point
2016-05-26 17:06:33 fib1618: so a snapback here could carry us to the -40 level and still remain constructive
2016-05-26 17:06:46 fib1618: the more underlying texture we build
2016-05-26 17:06:52 fib1618: the stronger the internal foundation
2016-05-26 17:07:16 fib1618: we'll call it a small point change in the MID breadth MCO
2016-05-26 17:07:48 fib1618: and here we can see that we are now just entering the MCSUM gap resistance area
2016-05-26 17:07:56 fib1618: so with another firm day on Friday
2016-05-26 17:08:02 fib1618: and we'll likely close this gap
2016-05-26 17:08:12 fib1618: this also means
2016-05-26 17:08:19 fib1618: that if the sellers don't step up here
2016-05-26 17:08:33 fib1618: they will lose any control they had previously in this index
2016-05-26 17:09:08 fib1618: looks like an inside range day on the SML
2016-05-26 17:09:23 fib1618: while the SML breadth MCO couldn't hold above the +25 level today
2016-05-26 17:09:39 fib1618: and wound up with a reading of +17
2016-05-26 17:10:11 fib1618: with what looks to be solid support at the -20 level
2016-05-26 17:10:22 fib1618: where we had that one day blip lower
2016-05-26 17:10:31 fib1618: and where the previous declining tops line also intersects
2016-05-26 17:11:07 fib1618: and a small pullback as well in the TM breadth MCO
2016-05-26 17:11:39 fib1618: while the TM breadth MCSUM has now reached the lower limits of its MCSUM gap resistance area
2016-05-26 17:11:45 fib1618: and looking, structurally, very much like a simple ledge
2016-05-26 17:11:49 fib1618: so...
2016-05-26 17:12:05 fib1618: it would appear that we had our technical reflex rally
2016-05-26 17:12:12 fib1618: and now that we're out of energy
2016-05-26 17:12:16 mojave: another super-low volume day
2016-05-26 17:12:24 fib1618: the buyers are now looking around for additional help to keep things going
2016-05-26 17:12:50 fib1618: the volume itself is very much like we expected on Tuesday with the holiday weekend coming up
2016-05-26 17:13:05 fib1618: in fact...the majority may had already left by lunch today
2016-05-26 17:13:16 thespookyone: agreed
2016-05-26 17:13:39 fib1618: since we have to spend hours going through security at the airport because "all of a sudden" TSA can't handle the load
2016-05-26 17:14:19 fib1618: I'm waiting to see who will the first airline to offer their own security
2016-05-26 17:14:29 fib1618: boy...will they get business
2016-05-26 17:14:38 fib1618: but I digress
2016-05-26 17:14:41 fib1618: sectors
2016-05-26 17:15:04 fib1618: the XLY breadth MCO found resistance just below the +25 level on Wednesday
2016-05-26 17:15:22 fib1618: with the 10% Trend snapping back toward its zero line
2016-05-26 17:15:37 fib1618: and the 5% Trend finding resistance at this same level
2016-05-26 17:15:58 fib1618: here too...we have all the makings of a ledge formation in progress on the XLY breadth MCSUM
2016-05-26 17:16:33 fib1618: and today's reversal bar pretty much suggests that all those that were going to buy (or cover) have done so
2016-05-26 17:16:44 fib1618: so we'll call this sector neutral for now
2016-05-26 17:17:21 fib1618: the XLP breadth MCO was able to move back above its blip resistance area today
2016-05-26 17:17:37 fib1618: but only by the slimiest of margins
2016-05-26 17:18:01 fib1618: the XLP breadth MCSUM continues to move net sideways overall
2016-05-26 17:18:18 fib1618: but with a pattern of bottoms above bottoms controlling the overall trend
2016-05-26 17:19:02 fib1618: so we'll call the price pattern itself constructive
2016-05-26 17:19:20 fib1618: with any further strength in the MCO suggesting that we can go back to accumulating stock
2016-05-26 17:20:21 fib1618: after moving above its zero line earlier this week, the XLE breadth MCO has now snapped back to this same zero line
2016-05-26 17:20:37 fib1618: and with the 10% component also snapping back to the 5%
2016-05-26 17:20:48 fib1618: we should see a rally attempt here by Tuesday
2016-05-26 17:21:21 fib1618: notice also how the XLE breadth MCSUM is playing tag with the +750 level on the 21 day close up chart
2016-05-26 17:21:32 fib1618: while the daily chart seems to be flat lining in this same area
2016-05-26 17:21:59 fib1618: upside price target there remains at $70
2016-05-26 17:23:16 fib1618: with any print below the intraday lows of last Thursday calling the current uptrend into question
2016-05-26 17:23:48 fib1618: the XLF breadth MCO is missing its "get up and go"
2016-05-26 17:23:57 fib1618: more like it "got up and went"
2016-05-26 17:24:26 fib1618: though the XLF breadth MCSUM remains constructive
2016-05-26 17:24:51 fib1618: negative crossover on the components too
2016-05-26 17:24:58 fib1618: makes it a toughy
2016-05-26 17:25:02 fib1618: stand aside
2016-05-26 17:25:39 fib1618: the XLV price pattern got our expected upside breakout out of its symmetrical triangle
2016-05-26 17:26:01 fib1618: but the XLV breadth MCO wasn't able to move above the +25 level
2016-05-26 17:26:33 fib1618: with the XLV breadth MCSUM trying to hold the +500 level
2016-05-26 17:26:37 fib1618: but it sure is a mess
2016-05-26 17:27:10 fib1618: with the likelihood of a snapback toward the apex of the triangle
2016-05-26 17:27:30 fib1618: it's time for this sector to prove its worth
2016-05-26 17:27:55 fib1618: so a buy stop at .10 above today's intraday highs seems prudent given what we have to work with
2016-05-26 17:28:20 fib1618: the XLI breadth MCO couldn't make it above +25 either
2016-05-26 17:28:50 fib1618: and we had a large reversal bar because of this as prices attempted to move to all time highs
2016-05-26 17:29:04 fib1618: oh sorry
2016-05-26 17:29:07 fib1618: that was the XLB
2016-05-26 17:29:27 fib1618: but the XLI did have a reversal bar as well
2016-05-26 17:29:37 fib1618: but it was more pattern exhaustion than anything important
2016-05-26 17:30:07 fib1618: the XLI breadth MCSUM is also at the lower limits of its gap resistance zone
2016-05-26 17:30:19 fib1618: and the +750 level as well
2016-05-26 17:30:28 fib1618: one more wash out it would seem it needed here
2016-05-26 17:30:54 fib1618: maybe back to $55.25?
2016-05-26 17:31:17 fib1618: as mentioned before
2016-05-26 17:31:28 fib1618: we have a large outside range reversal bar today on the XLB
2016-05-26 17:31:41 fib1618: with a zero line snapback in the XLB breadth MCO
2016-05-26 17:32:02 fib1618: and that was after a +49 reading on Wednesday
2016-05-26 17:32:09 fib1618: so...near term negative...short term positive
2016-05-26 17:32:30 fib1618: but we need to see better action above the +50 level in the MCO for the intermediate term boys to take over
2016-05-26 17:32:55 fib1618: the XLK breadth MCO made it to the +50 level today
2016-05-26 17:33:04 fib1618: with a small point change
2016-05-26 17:33:14 fib1618: given that this is the sector that led to the market reversal this week
2016-05-26 17:33:40 fib1618: we should watch this one as our proxy on the potential back and fill we're likely to see
2016-05-26 17:34:25 fib1618: but, for now, there's enough in the tank to take us to the April price highs
2016-05-26 17:35:08 fib1618: so we'll watch for any signs of "something else going on" that would need our attention
2016-05-26 17:35:40 fib1618: and the XLU breadth MCO looks to be building a foundation now
2016-05-26 17:35:53 fib1618: after collapsing to the -114 level last week
2016-05-26 17:36:13 fib1618: as we talked about then, that should set an important price low
2016-05-26 17:36:47 fib1618: but until the XLU breadth MCO gets above its blip and zero line resistance
2016-05-26 17:36:56 fib1618: prices are likely to just move sideways for now
2016-05-26 17:36:59 fib1618: so...
2016-05-26 17:37:29 fib1618: our expected firmness for this week as we move into the holiday weekend came in with only a Monday hitch
2016-05-26 17:37:38 fib1618: and as we also expected
2016-05-26 17:37:58 fib1618: we're not seeing enough broad based strength to look for a tradable bottom for now
2016-05-26 17:38:26 fib1618: there are signs, however, that we're in the beginning stages of a new advancing price structure
2016-05-26 17:38:51 fib1618: as the secondary issues that trade on the NASDAQ continue to perform nicely
2016-05-26 17:39:06 fib1618: sectors showing strength this week are the XLP, XLE. XLK and XLU
2016-05-26 17:39:34 fib1618: with the others trying to gain some footing
2016-05-26 17:39:38 fib1618: and because of this
2016-05-26 17:40:03 fib1618: will likely be the areas that will lead the markets lower during this anticipated pull back
2016-05-26 17:40:14 fib1618: let's see how the OBV's are doing
2016-05-26 17:40:56 fib1618: CVI's warned us of a price top by today...check
2016-05-26 17:41:05 fib1618: STVO's now getting "overbought"
2016-05-26 17:41:59 fib1618: and we'll call the VTO's fairly neutral for now...but look for the last couple of days of strength to show up over the near term
2016-05-26 17:42:22 fib1618: overall...too far, too fast on the volume side
2016-05-26 17:42:33 fib1618: so a couple of days of digestion is indicated
2016-05-26 17:42:50 fib1618: NYSE TRIN at 1.45
2016-05-26 17:43:00 fib1618: Open 10 at 1.04
2016-05-26 17:43:04 fib1618: fair enough
2016-05-26 17:43:27 fib1618: NASDAQ continuing to show good strength with a .76
2016-05-26 17:43:44 fib1618: whoops
2016-05-26 17:43:48 fib1618: not surprisingly
2016-05-26 17:43:54 fib1618: Open 10 is now at .80
2016-05-26 17:44:02 fib1618: and minimally "overbought"
2016-05-26 17:44:18 fib1618: TM TRIN at .99
2016-05-26 17:44:29 fib1618: Open 10 at .86
2016-05-26 17:44:32 fib1618: so...
2016-05-26 17:44:40 fib1618: given the MCSUM structures and their position near their gap resistance areas
2016-05-26 17:45:05 fib1618: along with "overbought" readings in the STVO's
2016-05-26 17:45:12 fib1618: and the NASDAQ Open 10
2016-05-26 17:45:22 fib1618: let's look for a period of back and fill in the market's effort to fill the vacuum of moving too fast and too far
2016-05-26 17:45:59 fib1618: next week is the first week or month
2016-05-26 17:46:02 fib1618: so jobs data is due
2016-05-26 17:46:18 fib1618: and given this new found fear of rate hikes in June by the FED over the last week
2016-05-26 17:46:38 fib1618: players are likely to take a more defensive posture on their trades until more information if available
2016-05-26 17:46:41 fib1618: technically
2016-05-26 17:46:53 fib1618: there doesn't seem to be a need for any further rate hikes coming
2016-05-26 17:47:19 fib1618: as the interest rate sensitive players continue to support the debt market
2016-05-26 17:47:29 fib1618: on the other side of the coin
2016-05-26 17:47:35 fib1618: gold has taken a real hit this week
2016-05-26 17:47:44 fib1618: which would indicate a contraction in liquidity
2016-05-26 17:47:58 fib1618: so we have a battle here as to who may be right
2016-05-26 17:48:07 fib1618: let me look around a bit
2016-05-26 17:48:41 fib1618: gold down $34 for the week
2016-05-26 17:49:08 fib1618: moving below the apex of its symmetrical triangle
2016-05-26 17:49:13 fib1618: so something is going on there
2016-05-26 17:49:15 thespookyone: do you think the metals/miners will perform inverse to the market at this point, or with it? Also, I really think the miners need one more low to see a bottom, what is your opinion of that?
2016-05-26 17:49:42 fib1618: I we'll know more once I get the A/D data this weekend
2016-05-26 17:49:47 thespookyone: cool
2016-05-26 17:49:50 fib1618: but to answer your question with an opinion
2016-05-26 17:50:12 fib1618: history has shown that the PM stocks lead the metals more times than not
2016-05-26 17:50:16 fib1618: as of last weekend
2016-05-26 17:50:25 fib1618: the XAU A/D moved to new highs
2016-05-26 17:50:39 fib1618: but this was not confirmed by the broader based PM A/D line
2016-05-26 17:51:00 fib1618: although it was only by a whisper of 4 net advancing issues
2016-05-26 17:51:04 fib1618: but as a chartist
2016-05-26 17:51:18 fib1618: not being to find support at the previous apex is a yellow flag there
2016-05-26 17:51:38 fib1618: and we'll have to step back and re-evaluate the whole sector
2016-05-26 17:51:51 fib1618: could be money moving from gold into equities
2016-05-26 17:52:20 fib1618: as gold acts as a savings account while you wait for better performances elsewhere
2016-05-26 17:52:21 thespookyone: that's what I was thinking
2016-05-26 17:52:27 mojave: AAII bulls dropped to 18 this wk, matching Jan's 10-yr low, kinda weird
2016-05-26 17:52:43 fib1618: yea...the whole thing is "weird"
2016-05-26 17:53:19 fib1618: but on the bullish side
2016-05-26 17:53:24 fib1618: silver is not leading gold lower
2016-05-26 17:53:33 fib1618: and that usually means that this is corrective
2016-05-26 17:53:49 fib1618: I'll have to look at the charts again...and I'll come up with something this weekend
2016-05-26 17:53:54 fib1618: (hopefully)
2016-05-26 17:54:23 thespookyone: for myself, I think a bottom is in here on equities, and we probably just see a correction. My problem on the miners is I see a wave three volume signature down, but not a 5 [frown]
2016-05-26 17:54:41 fib1618: could be correctional
2016-05-26 17:54:49 fib1618: your 3 is actually a C
2016-05-26 17:55:24 thespookyone: overall, absolutely, I just feel it needs one more shot down. I was thinking I saw a 3 of C
2016-05-26 17:55:26 fib1618: here's what I would watch
2016-05-26 17:55:32 fib1618: could be
2016-05-26 17:55:36 fib1618: watch the CRB
2016-05-26 17:55:46 fib1618: watch the TSX Ventures
2016-05-26 17:55:57 fib1618: and watch the Dollar and Australia
2016-05-26 17:56:49 fib1618: the Dollar did find resistance at the 200 EMA as we figured it might last week
2016-05-26 17:57:11 fib1618: giving another example that gold and the dollar don't always play inversely to each other
2016-05-26 17:57:36 fib1618: if I had to guess fundamentally
2016-05-26 17:58:05 fib1618: I think that some very large institutions decided to sell gold on the expectation that the FED was going to raise rates in June
2016-05-26 17:58:20 fib1618: and once this becomes a non event
2016-05-26 17:58:26 fib1618: we could see a huge reversal
2016-05-26 17:58:44 fib1618: after all
2016-05-26 17:58:58 fib1618: many of these institutions were buying gold at $1080
2016-05-26 17:59:46 fib1618: during the depths of January sell off
2016-05-26 18:00:03 mojave: FT yest: "Venezuela sells gold reserves as economy worsens"
2016-05-26 18:00:08 fib1618: we'll see how it goes
2016-05-26 18:00:09 fib1618: oh
2016-05-26 18:00:12 thespookyone: agreed, how bout we scare the front running longs out first, and pick up some bear fuel? Then a huge reversal, on a volume bottom [smile]
2016-05-26 18:00:12 fib1618: there you go...maybe Venezuela
2016-05-26 18:00:23 fib1618: could be that too
2016-05-26 18:00:35 fib1618: all we know for now is that the A/D lines in the PM's remain positive
2016-05-26 18:00:53 fib1618: and I would rather give a heavier weight to that than anything else
2016-05-26 18:01:03 thespookyone: I really want in when the reversal comes..
2016-05-26 18:01:18 fib1618: if the A/D lines remain positive this week
2016-05-26 18:01:20 fib1618: nibble away
2016-05-26 18:01:26 thespookyone: thx
2016-05-26 18:01:35 fib1618: anything else?
2016-05-26 18:02:01 thespookyone: thanks for all your help tonight, and for your gift too, Mike
2016-05-26 18:02:13 fib1618: a gift?
2016-05-26 18:02:31 fib1618: oh
2016-05-26 18:02:32 thespookyone: Mike, gave us the minus sign
2016-05-26 18:02:33 SlateDrake: great chat session, much appreciated.  Loved the initial discussion around FLS
2016-05-26 18:02:41 fib1618: super
2016-05-26 18:02:49 fib1618: now go and make money with the information! [smile]
2016-05-26 18:03:06 fib1618: to be really good at technical analysis you have to keep it simple
2016-05-26 18:03:19 fib1618: and remember that all we're ultimately doing here is working with supply and demand
2016-05-26 18:03:47 fib1618: and traders decide what the fundamentals are going to be at a later time
2016-05-26 18:03:56 fib1618: bunch of cheaters we are [smile]
2016-05-26 18:04:11 fib1618: OK...I'm going to get out of here
2016-05-26 18:04:15 thespookyone: OH YEA
2016-05-26 18:04:20 fib1618: everyone have a great holiday weekend
2016-05-26 18:04:28 fib1618: and we'll go back to work again on Tuesday
2016-05-26 18:04:32 fib1618: good night
2016-05-26 18:05:24 mojave: great weekend everyone (Fri here) [smile]

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