AMZN is paying the price during this market correction for being so widely held and for having run so hard for so long. Where is support likely to re-appear? No one, knows and I think that will depend almost entirely on when the tech market gets a bid finally.
Here are the levels I am looking at …
AMZN – Weekly Chart
The weekly broadening price formation has seen price pullback to the upper support/resistance line. Will price find meaningful support here at around $1375?? Maybe …
AMZN – Daily Chart
On the daily chart, I can see what looks like a nice band of prior volume in the $1125 – $1200 zone … with that zone in mind, I decided to sell some OTM put options that expire before the next earnings date (April 26th). I sold some of the $1150 puts that are going to expire on April 20th.
AMZN – 195 Minute Chart
I continue to trade AMZN as my main focus intra-day, but I am not yet prepared to hold any long/short position overnight. Selling some OTM puts at that $1150 level is a much safer way of making a multi-day bet on what will happen to AMZN over the next couple of weeks.
Cheers … Leaf_West
I wrote two pieces about energy stocks and crude oil prices back on August 29th (click here) and on September 14th (click here). The call on crude oil and energy stocks were pretty good if I do say so myself. Both crude and energy stocks are at areas where I think they have found obvious levels of resistance.
Crude Oil Futures Contract – Daily Chart
Crude has made a beautiful 3-wave price structure out of a downward broadening price pattern. My software is painting dark blue extreme trend strength warning candles with pink divergence dots right as price has pushed into the 1.272x – 1.618x extension target zone for Wave 3. As good a spot for crude to begin a corrective pull-back price structure as any.
S&P Energy Index ETF (XLE) – Daily Chart
As I suggested back in late August, energy stocks made it all the way up into the median line of the upward sloping weekly broadening price pattern. Crude and energy stocks are going to crush a lot of dreams here over the next couple of weeks I would think.
Cheers … Leaf_West
In my post dated January 2, 2018, I noted that AMZN was sitting right in a spot where traders should expect a positional move in the stock (click here to review that post). Here is the daily chart from that post … Continue reading
When you look at the weekly chart for bonds, you have to think that maybe, just maybe, the great Central Bank manipulation to global interest rates is coming close to the beginning of the Great Unwind. Here are some weekly charts to ponder …
20-Plus Year US Bond ETF (TLT) – Weekly Chart
Price is still contained within the weekly downward broadening price pattern … we are in the middle of the 7th consecutive “contraction” warning signaled by my software painting the weekly candles yellow. What follows contraction? Typically it is a new expansion phase …
The Price Momentum indicator has shown that price has been in a squeeze for 16 consecutive weeks, which is pretty unreal, and almost all bond portfolio managers are likely fast asleep at the wheel and not prepared for what is going to happen next.
The Moving Average Spread Indicator is looking like it wants to make a second, lower cross-over, which typically is the sweet spot where the best shorts are made.
Where is support for price inside the weekly broadening pattern? It is around $106.50ish … which is about 14% lower than yesterday’s close.
What would a 14% drop in bonds mean for all those equity holders who are maxed out with their margin accounts?? Probably a little bit of pain!!
Cheers … Leaf_West
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
I still believe that my current read of the TSLA bigger price structure is correct and I am looking to get on the books another short position going into year-end. Here is my read of the charts … Continue reading
TSLA is making its product announcement on Nov 16th about its EV semi-truck. They are likely to try and leverage that announcement into some type of an equity underwriting as the cash burn of the Model 3 is quite intense right now, and I think it is only going to get worse, so Elon would be smart to take advantage of any positive news to shove a bunch more equity down traders’ throats at these obscene price levels (>$300).
I continue to like TSLA to the short side, and I am looking to add a bearish trading position again over the next several days as price bounces into resistance …
TSLA – Weekly Chart
My bigger target in the medium term is that lower support level on the broadening price pattern at around $240. Before that next leg lower, we need to find resistance a little higher up to suck in some more of Ron Barron’s money.
TSLA – Daily Chart
The median line at around $323 or the daily ATR resistance at about $330 should be the upper lid on any price bounce this week into that expected equity financing.
Cheers … Leaf_West
I last updated TSLA on October 17th (click here) last week. The firing of the weekly price squeeze looks like it is starting and as I thought, it looks like the squeeze is going to fire to the downside. That would make it 4 in a row to the downside. I continue to hold bearish option positions in TSLA. Here are the charts … Continue reading
HD is acting pretty well today considering the tape is just kind of choppy. The 15-min and 65-min chart resistance ATR’s have been broken today, so I decided to take a closer look to see if I should be looking to positionally or swing-trade HD here soon. There next quarterly report is not due until Nov 21st, so maybe we are about to start a ramp into earnings, which often happen in large-cap market darlings. Here are the charts … Continue reading
I wrote an update on AMZN yesterday that raised the possibility of the stock making a possible Wave 2 high of a new possible trend or at best a Wave 2 high of a large sideways consolidation pattern (click here). The stock is about $13 below where it was when I wrote that blog post and it looks like it is possibly testing a break of the weekly broadening price pattern that I have been tracking for AMZN.
You might say … whoop-t-do, price is breaking some imaginary price pattern!! I say beware when price breaks price patterns, because it could be the early warning of a change in trend. Here are the charts … Continue reading