TSLA Update …

TSLA has been my favorite stock for trading during 2018 … I have made several posts about TSLA’s set-ups and I am looking once again at zones where resistance can be expected,  Here are the charts …

TSLA – Weekly Chart

The rising/broadening price pattern is still intact but the median line is likely to be formidable resistance here soon.

TSLA – Daily Chart

The Median Line resistance is around the $358 level.

TSLA – 195 Minute Chart

The 195-min chart is painting light blue candles warning me of an extreme move of price away from its slower moving averages.  Note that volume is tapering off as we get higher and higher on this expansion move.

Be on guard if you are long TSLA as we push into the $350 – $360 levels.

Cheers … Leaf_West

FOMC Meeting Begins Tomorrow … Looking for Precious Metals to Begin Moving

As mentioned in my update on precious metals dated June 6th (click here), silver’s chart looks like it could be interesting going forward here soon.  One of the technical analysts that I follow wrote a blog piece dated June 8th that actually discussed how silver has a history of frequently making important lows/highs into FOMC meetings (the next one beginning tomorrow) – click here to read his piece.

Saying all of this is my way of reminding traders to pay attention to silver, gold and to gold miners for the next week or so … we may be on the verge of starting an expansion phase in these sectors.  Here are some charts …

Silver Futures (SI) – Daily Chart

$17.00 is still the level that silver futures has to take out to show me that it is trying to move higher …

Gold Miner ETF (GDX) – Daily Chart

Price for the GDX miners broke the daily ATR resistance level back on April 11th … price to me has “confirmed” that break higher with the consolidation since that date.  Now all we need to see is the desire and willingness to break higher.

Gold Miner 3x Leveraged Bull ETF (NUGT) – Daily Chart

I would think that NUGT should at least get to the 61.8% level in the SLOT resistance zone … that would mean price is getting ready to make a move up to about $31.60 or about 24% higher than today’s closing price.

WPM – Daily Chart

I am long a good sized position in WPM, a Canadian royalty mining company, in my retirement accounts here in Canada.  They announced another asset purchase recently … this one in cobalt as WPM’s management continue to move away from being totally dependent in silver where they originally focused the Company’s attention.  This is probably just another sign that traders should be looking at silver after years of terrible performance/returns.

Cheers … Leaf_West

Blog Site News …

I have had some personal distractions since April 2017 that have kept me away from spending as much time trading and blogging.  Those distractions are becoming more maintained and I am ramping up my trading analysis.

Also happening lately is my son Paul’s stated desire to learn the trading business … this has given me further reason to give more effort to my blog site and its educational posts.  The first efforts will be to bring forward my educational PDFs that I had written for my prior blog sites – they may be a bit out of date, but I will eventually get to it to update them.  In the meantime, there is still some value-added to those pieces so i will put them up under the educational tab.

Click here to go to the educational tab ….

Cheers … Leaf_West

 

Bonds into Support as Stocks Push into Resistance …

My read of the current price structure for the market-leading stock sector (tech or the QQQ’s) match up pretty well with my read of the price structure for bonds … bonds are pushing into a logical support SLOT zone while the Q’s push into a prior high and a logical termination zone for the 2nd of 3-waves I am looking for from stocks.  Here are the charts …

US 30-Year Treasury Bond Future Contract (ZB) – 195 Minute Chart

I have been calling this move in bonds pretty well for the past couple of months … I think that we should see the long bond find support in the SLOT support zone – we are right at the important 61.8% that often acts as support/resistance during corrections.  The FOMC meets June 12th and 13th, and bond moves often happen/begin around those FOMC dates.  Maybe bonds bounce around here for about a week before beginning what I think will be either a Wave 2 or Wave C move to the next level of resistance.

NASDQ 100 ETF (QQQ) – 195 Minute Chart #1

Everybody is pretty hopped-up with the break by equities out of the big multi-month consolidation patterns they had been making.  When something is so obvious that “everyone” sees it I begin to worry about a massive failure/fake-out move … aside from that minor concern of mine, it appears to me that the Q’s are pushing right into an obvious level of resistance for a Wave 2 of a 3-wave price stucture.  Wave 2’s typically fail in resistance right at the 1.618x extension target … we are right there for the Q’s now.  To top off that obvious target is the fact that we are also pushing right into a prior pivot/all-time high – what are the odds that we blow right through that level and tack on another 5% or so without pausing??  I think it makes more sense to see a fake-out and consolidation/corrective price action which would set-up a more sustainable break to new highs.

NASDQ 100 ETF (QQQ) – 195 Minute Chart #2

So if my read is right, then the Q’s are making a push this week that could lead into an important pivot high followed by a pullback into SLOT support.

Cheers … Leaf_West

Bond Update …

As an update to my prior post on the bigger wave structure for bonds (click here), I think that we are likely inside the corrective wave move after the first leg higher out of the major area of support I identified in that earlier blog post … here are my current thoughts.

US 30-Year Treasury Bond Futures (ZB) – 195 Minute Chart

Based on the look of the move/candles, the move higher out of support for bonds was clearly impulsive and not corrective.  Therefore, I would expect at least another push higher by bonds after a period of consolidation/minor correction.  The next move higher is likely to be made from a bigger level of support so I would look for price to make it down somehow into the typical SLOT support zone.

The next push higher will I believe, offer another attractive risk/reward trade and one that traders should be willing to swing trade.

Cheers … Leaf_West

Bonds – Are We at Near the End of this 3-Wave Structure??

I have been waiting for the TLT to break below the low from February 21st to possibly begin the completion of its current bigger time-frame price structure … today price broke below that $116.51 level and I think the next swing trade in bonds will be to the upside.  Here is what I am seeing. Continue reading

Where the Rubber Meets the Road …

Yesterday I took a look at the break to a new minor high in the tech-heavy QQQ ETF and mapped out three possible scenarios for price as we go forward.  Earlier today I looked at both the SPY and IWM (small-cap stocks) ETFs … small caps are actually breaking out of their consolidation pattern and late on Monday, price on the 195-min chart flipped from yellow/contraction warning candles and signaled the beginning of a new trend expansion phase.  The SPY chart is the index that I like to follow the closest to track what the “overall” market is doing, and it is lagging the QQQ and IWM – we are still below the prior minor pivot high, and we are still in a trend strength contraction zone.  Here are the 195-min charts …

IWM – 195 Minute Chart

SPY – 195 Minute Chart

Bottom Line … small caps will be important to watch, but the SPY is the one that matters most I believe.

Cheers … Leaf_West

Where to Next?

The NASDQ 100 Index has just broken above an important level and we should see in short order, what the market has in store for investors.  Here is the daily chart and three possible roadmaps for the tech market …

NASDQ 100 Index ETF (QQQ) – Daily Chart

The April 18th pivot high for the QQQ was $167.00 … that level was taken out with today’s price action.  By doing so, you have taken out an obvious prior high/resistance level, and one that the entire market will take note of.  Many algorithm trading programs will attack breaks of obvious resistance/support levels, and that is why you often see the market break to new minor highs/lows before reversing.  In essence, the market traps traders playing the initial break, and you see those “weak hands” get rinsed out of their positions by the stronger, more sophisticated trading entities.

So basically, now that price has broken above the prior resistance level, we are either going to fail and reverse, or we are going to gather momentum, and have the MOMO traders jump on this latest move and we should gain steam as we march towards prior major highs.  I have labeled this bullish scenario as #1 on the above chart … the move off of the last low will need to push through the “ABC” extension target zone of $170.05 – $173.69 if we really are headed to new highs.  Typically, I would expect for price to make a new minor high, and then pull-back slightly to test that break – if the move is real, it will trap sellers at the high and steamroll through them.

Scenario #2 is the bullish scenario I would rather see unfold … in this case, price will fail at this break of a prior pivot high and head down to SLOT support.  From support, price would begin moving higher thereby trapping traders who think that a Heads & Shoulders pattern was about to confirm and price was about to head lower.  It is this outsized opinion and short position that fuels the bigger, more sustainable move to new highs.  In essence, bigger corrective moves prior to an attempt to break higher usually leads to a higher odds chance of that break succeeding.

For the possible bearish scenario, (Scenario #3) I would think that we need to fail here as price moves above the obvious prior minor high, likely in the extension target zone.  Price would then correct lower and slice through minor SLOT support at the $160.92 – $156.86 level.  As price breaks below the prior lows, there would be an outsized chance that price was just setting up an even bigger squeeze that could fuel a move higher, but more likely, this type of move would signal some bigger corrective pattern or even the beginning of a bigger trend lower.

Bottom Line … in any of these case, traders should be paying close attention to closing daily and weekly charts to see what type of move is confirming itself.  I will try and update what I see as we go along.

Also, note that my charting software is painting the past 4 daily candles yellow, which visually warns me that trend strength has contracted to the point where trend was now officially in the “Contraction” zone – what follows contraction?? Expansion does … should be an interesting next couple of weeks/months.

Cheers … Leaf_West

Will Q1 Earnings Season be the Impetus for Price to Break-Out of this Consolidation?

The stock market has been doing a good job of late chopping up shorter-timeframe traders.  Here is how I see the market …

S&P 500 Index ETF (SPY) – Weekly Chart

The above weekly chart highlights the fact that we are clearly in a corrective pattern for the SPY off of an extreme trend strength warning signal (dark blue candles) made by charting software … we are now in a position of having the ATR in resistance, so until we can get a better idea of this weekly price structure, it behoofs traders to take caution with their overall exposure to equities.

S&P 500 Index ETF (SPY) – Daily Chart #1

The daily chart shows that we are in a bigger consolidation pattern and are no longer trending … traders have to be more nimble in this type of trading environment.

S&P 500 Index ETF (SPY) – Daily Chart #2

Even if you are a big equity bull, it is not clear yet that the corrective pattern is complete … the C-wave of the correction did not actually go down to make a new lower low below the A-wave low.  Typically that last push to a new minor low is necessary to take out stops and set-up the squeeze higher out of the corrective pattern.  Also, the market usually makes one fake-out move to the upside to get the weak hands out of their shorts and to get the naive bulls more aggressive.  If that happens here again with this price structure, I would expect price to push higher for the next week that would peak above the trendline off of the two prior highs – that break would get many traders further committed to new longs as they “play the break higher”.  The market tends to bitch-slap this early break-out attempt.

I would then think that the market pushes down to make that new C-wave low … that is when we will see if this is indeed a corrective pattern and we can therefore make a more legit move to attempt a break of the prior highs.

S&P 500 Index ETF (SPY) – 195 Minute Chart

The bigger question I am still monitoring, however, is whether or not we are making an ABC correction or whether we are making a bigger 1-2-3 price structure that is part of a much bigger distribution pattern or even the marking of a very important market top.  If we are making that bigger move, then look for SLOT resistance to hold and price to turn lower.  Maybe that move lower starts after monthly OpEx or even closer towards the end of April??  We shall see …

Cheers … Leaf_West