AAPL … Looks like a Year-End Ramp Job!

Today is the “triple witching” expiration date where index options and futures expire along with stock options.  Once we get this behind us, institutional managers are free to ramp their favorite stocks into year-end.

One of the stocks that I own call options on into Dec 29th expiry is AAPL …

AAPL – 195 Minute Chart #1

To me it looks like the third wave of a 3-wave price structure is about to officially break the ATR resistance level and “signal” the beginning of the final push into year-end.  $180 is my target … the market likes nice round numbers in part because of stock option strike prices.

AAPL – 195 Minute Chart #2

The Trend Strength histogram looks like it has completed the majority of its consolidation/pullback into the Chop Zone, and that should allow price to make its next push higher.

Price Momentum and the Moving Average Spread Indicators look like they are in a good position as well to get long AAPL into year-end.

Bottom Line – All that we need now is for Trump to not fuck up the last push into year-end!!

Cheers … Leaf_West

What’s Going on in Bonds?

Bonds have not been doing much at all in 2017 …

30-Yr US Treasury Yields – Weekly Chart

The high in yields came in about 3.20% and the low of the yearly range at about 2.60%.  We have spent the better part of the last 6-months in about a 20bps range – like watching paint dry.

30-Yr US Treasury Futures Contract – Weekly Chart

The weekly chart for the 30-yr futures contract has painted 6 yellow warning candles in-a-row here … things are getting unsustainable, and maybe we get some fireworks in bonds to coincide with a little pullback in equities in the new year?   Nah … not possible, right?  Didn’t think so.

20-Yr+ US Bond ETF (TLT) – Weekly Chart #1

The TLT is not quite as tightly wound as the futures contract, but it looks even more like it wants to break higher than even the futures contract does.

20-Yr+ US Bond ETF (TLT) – Weekly Chart #2

The downward broadening pattern for the weekly chart in the TLT shows us that a potential big trend reversal could be close at hand if the upper resistance line can get taken out … could that be one of the bigger trades for 2018 – a rally in bonds?  No one is expecting it, as everyone is betting the strengthening global economy will lead to lower bond prices.

If that is the case, why have bond yields been falling?  Must be that transient factors driving inflation measurements lower these past few months!!

Bottom Line – keep your eyes on bonds going forward here for the next couple of months.

Cheers … Leaf_West

GS Update – December 14, 2017 …

My favorite Fast Money talking head, Dan Nathan talked about GS on today’s show so I called up my bigger broadening price pattern to see if I can see the bearish outlook that Dan sees …

GS – Weekly Chart #1

Price is back testing the upper resistance line of the broadening price pattern on the GS weekly chart … with the strength shown in that kick-off move, I would have to assume that price is going to push to new highs.  Question is whether or not we can go much higher if the overall market has any kind of a hiccup during early 2018.  I ask that because of my post yesterday that talked about the extreme trend strength warning on the S&P 500 Index (the first since July 1995).

GS – Weekly Chart #2

All of GS’s weekly chart indicators are pointing higher …

GS – Weekly Chart #3

And it looks like the R/S is about to break out of a consolidation pattern … I love when it does that!!

GS – Weekly Chart #4

I have an audio alert set to warn me when the R/S indicator makes a break higher …

Cheers … Leaf_West

S&P 500 Painting Extreme Trend Strength Warning on the Weekly Chart …

The weekly SPX chart is painting a dark blue candle this week that signifies that the trend strength histogram has pushed above the 100 level and is therefore now in the “extreme” trend strength warning zone …

This is a big deal on a weekly chart – the last time the weekly SPX did this was in July 1995, which was about 6 months into the multi-year internet/tech craze.  There are lots of extreme trend strength warnings on moves lower, primarily because declines are more emotional than grinds higher in the market.

S&P 500 Index – Weekly Chart

So what does all this mean?  Has the S&P 500 just broken out higher out of a trading range and about to go on a 5-year rocket ship ride higher like the craze we saw back during the 1995 – 2000 time period?  Maybe, but I would argue that we are not just breaking out of a trading range here in late 2017.

I heard on CNBC this morning that the DJIA is on the way to finishing the current calendar quarter and register the largest quarterly gain ever in % terms as well as in the total points added.  I think also that I recently heard or read that 2017 is going to be the lowest volatility year on record.  All is good right?  Bitcoin is dominating the news, Trump is making American great again, and the new Saudi leaders are bringing back movie theaters to their country.

What could possibly go wrong in 2018?  It has to be a replication of the prior 12 months right?  ……. Right??  This mornings inflation numbers reconfirms that there is no inflation in the US (cough cough … except in financial assets) and therefore, there is a chance that the FOMC’s decision this afternoon is to stay pat, but to warn the markets, that they are data dependent and stand on guard against inflation if it were ever to raise its ugly head again.

My recommendation is for traders to not assume anything and to just stand on guard and watch price action even more closely this coming year.

Cheers … Leaf_West

CRM Update – December 13, 2017 …

One of the issues facing traders right now is the pending holiday season which typically sees less active markets.  That lack of conviction or volume in trading can often bring about “fake” movement in stock prices and that can lead traders from getting sucked into getting involved in a longer-dated trade when they should be holding off and waiting for more confirmation.  Is that the case here in CRM? Continue reading

JPM Update – December 11, 2017

One of the best things traders can do as the day winds down is to look at the 30-min charts to see which stocks are setting up for a possible expansion push higher the next trading day.

One of the stocks I noticed today that could be a stock in motion tomorrow is JPM …

JPM – 30 Minute Chart

Maybe tomorrow it coils even tighter, but the two biggest stocks in the XLF Financial Sector ETF (JPM and BRK.B) look like they are coiling and getting ready to make an expansion push higher.

Cheers … Leaf_West

TSLA Update – December 11, 2017 …

TSLA just took out the prior pivot high that I was talking about last Friday (click here).  I have begun positioning for the next move lower by selling Dec 29th $355 calls.  I have started small as is typically the case and will add to the position over the next couple of days.  I received a credit of $0.90/share.  I typically also day trade/follow a stock more closely while I am waiting for the pivot high and change in trend direction to get underway in earnest.

I will be tweeting/posting when I become more convinced that the new trend direction has begun.  The stock may stay elevated until year-end, but I don’t think we are going to get above $350 before year-end.

Cheers … Leaf_West

Is GDX Breaking Down or Making a Final Thrust into Support?

I have an audio alert set on GDX right at the bottom of my SLOT support zone (78.6% Fibonacci support level) … it activated this morning.

GDX – Daily Chart

As we head into the FOMC interest rate decision next week on December 13th, the market is almost 100% sure that rates are going higher … if that happens, the US dollar should receive a steady bid, and that would lead to a decline in US$ priced commodities like gold.  If that happens, gold miners will be sold and as the chart above suggests, price will begin to trend lower.

What if the Fed does not raise rates?  That would definitely be a surprise to the majority of the market participants, and likely lead to a huge short covering rally in gold and gold miners.  Price for GDX will have completed 3 pushes down into that support event, and be a great level to trade long off of.

I have had my trading hand slapped a couple of times of late, and the best advice I can give anyone here is to sit tight and wait for the FOMC meeting next week.

Cheers … Leaf_West