Ready for the Charts to Resolve Themselves …

It looks to me like the market is not sure what to do next …. earnings are expected to be great for the remainder of the year, in part because of the tax reform pushed through by the Trump administration.  The next corporate earnings reporting season begins in a couple of weeks, and with the first quarter’s OpEx getting behind us with the conclusion of this week’s action, I think that the market is going to resolve the mixture of signs that it is currently presenting us.

Here is what I mean by that …

S&P 500 Index ETF (SPY) – Daily Chart

The S&P 500 daily chart has clearly pushed higher of off the early Feb correction lows … while price has pushed up into resistance, the trend strength histogram has pulled back in a corrective/consolidation move.  That indicator is now in the Contraction Zone and after a contraction phase, traders should expect an expansion phase to follow.

Will price expand higher or lower … I think the market wants to go higher, but earnings and the marginal buyer of equities is going to have to help things out going forward.  Typically I like to see how the other parts of the market are doing to get a sense of which way the S&P 500 wants to go.  Before I do that, let’s take a look at the 195-min SPY chart.

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

You can see more clearly that price has really only pushed up into the SLOT resistance zone, and has not really finished resolving itself yet.  The indicators included on this chart clearly indicate that bulls need to be a little careful here getting too big too quickly with their position sizes.  There will be a time to make bets for the next expansion phase, but right now is not the time, or at least that is how it looks to me.

NASDQ 100 Index ETF (QQQ) – Daily Chart

Tech stocks have without a doubt been the market darlings for quite some time now.  I won’t show them here in this post, but the FANG stocks don’t look like they are going to be able to lead the market here for the next little while.  Another sector of the market may need to step-up to the plate here for the next break higher if that indeed is what is going to happen.  The Tech Sector represents about 26% of the total market now so Tech is undoubtedly an important driver going forward.

Russell 2000 Index ETF (IWM) – Daily Chart

The IWM ETF has bounced up to the prior high … the next couple of weeks into earnings season will be an important catalyst for the small-cap index if price is going to break out sustainably into new-high price territory.

Cheers … Leaf_West

TSLA Update – March 16, 2018

I last wrote about my short in TSLA on March 1st (click here) … I still have my September monthly TSLA $350 Puts and I continue to write OTM puts and calls while I wait for the real big push lower down into the next obvious level of support.  Here is an update of the charts.

TSLA Weekly Chart – as posted on March 1st

TSLA Weekly Chart – current

The weekly chart has not really started its next major push lower yet, but this week’s candle will be making a new lower low out of the consolidation activity since that March 1st date.  The daily and 195-min charts look like the next expansion phase lower could be happening once we get the March monthly OpEx behind us.

TSLA Daily Chart

You can see that the daily ATR support price is at $324.06 … TSLA is trading today below the $323 level so it is likely that the daily ATR support level is going to be broken with today’s close.  The R/S indicator also looks like it is going to give a sell signal some time in the near future.  I like to see price and relative strength confirming each other.

TSLA 195-Minute Chart

None of the operational data that has been announced this month has really supported an operational turn around at TSLA … lots of senior management have recently left TSLA and that typically is not a great sign/signal for bullish equity investors.  The next major event for TSLA will be the quarterly auto sales figures … they are typically released within the first 5 days after the quarter ends, so that should make the start of April a pivotal one for the battle between the bulls and the bears in TSLA.

Cheers … Leaf_West

Possible Weekly Pivot Reversal Candle in TSLA??

I have been waiting for the right time to begin shorting TSLA again, and today is the day where I decided to begin.  Here is how TSLA’s weekly chart looks to me …

TSLA Weekly Chart #1

The weekly chart has been in a position of ATR resistance for quite a while now … while that has been the condition, relative strength vs the SPY has made a nice looking bear flag or pendant/wedge pattern, and  money flow continues to leave TSLA.  I think this week has a nice chance to be a pivot candle for price to begin heading lower in earnest.  The early February weekly candle was the warning shot and I was waiting for a failure bounce to the upside to begin a put position and begin getting more active at shorting the stock outright (especially intra-day).

Price has hugged the median line from the broadening price pattern and to me it looks like we could be about to break lower and head down to the lower support line as a first real support level.

TSLA Weekly Chart #2

So price made a nice bounce right into the SLOT resistance zone and now it is likely, in my eyes, to begin the next leg lower.  Will that be the “C” wave of an ABC correction pattern, or will it be the next major leg in the death knell of TSLA, i.e., the 2nd wave of a bigger 3-wave pattern.  If it is just a ABC, then price will likely find support around $265 … if it is a bigger move lower, then $230ish is the likely bigger support level.

TSLA 195-Minute Chart

We didn’t go on to make a new higher high before we look like we made a second break of ATR support … this is the “double-crossover” I like to see when trying to catch inflection points.  The 195-min candle closed a couple of minutes ago and it is still holding on … the next candle closes at today’s cash market close (4pm – $336.10).

TSLA 65-Minute Chart

The 65-min chart is in the position of resistance now and Tuesday’s high ($359.99) will not be broken if my price structure read is correct.

Nothing in my following of TSLA’s fundamentals makes me think that we are going to see a great 2018 operationally, so this could very well be a pivotal year for TSLA’s stock price.

Cheers … Leaf_West