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

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

AMZN – Which Way for the Next Positional Trade??

I did well trading AMZN last year for what I thought were possible 3-5 day bullish moves.  I typically look for expansion phases that are beginning or about to begin when I have looked for these bullish moves.  Here is what I am seeing currently …

AMZN – Daily Chart 

The daily chart has set-up what looks like at first glance a nice bullish consolidation pattern (a pennant or wedge).  The Trend Strength histogram has pulled back from an extreme trend strength warning, and is now in a spot that gives better odds to an expansion phase beginning.  The Relative Strength indicator on the right shows that R/S is also making a bullish consolidation pattern similar to price … so all is fine for bulls to play for a 3-5 day move higher here in early 2018 right?  Well, don’t forget to check your odds of the daily chart pattern with the weekly chart …

AMZN – Weekly Chart 

The best daily chart setups occur when the weekly chart is pushing in the same direction.  Can we say that here with AMZN?  Actually, I think that odds of a relatively big daily chart move to the upside are not great odds wise here in early 2018.  The price momentum on the weekly chart is relatively stretched to the upside so the weekly chart could actually be losing steam here early in 2018.

That weekly chart could lead to chop on the daily chart, while the bigger time frame consolidates and builds up energy for the next push higher.  All-in-all, I think I will stick to intra-day trading AMZN here early in 2018, both to the upside and to the downside as well when the charts are lined up for a good intra-day move.

Always try and confirm the daily chart with the weekly when considering multi-day positions.  If you are trying to swing a trade positon for several weeks, then that monthly chart has to give you the go-ahead as well.

Cheers … Leaf_West

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

BA Update – September 14, 2017

BA has been a monster stock for the DOW and the daily chart looks like the trend strength consolidation pattern looks like it has completed its pull back into the Chop Zone and therefore, in a position where the next expansion phase could begin at any time here …

BA – Daily Chart

A key thing to watch on this next move will be the relative strength indicator … note that the momentum of the R/S indicator looks like it is curling higher (bullish).  Volume is also perking up here and yesterday saw the total daily amount get above the 20-day SMA (also bullish).

BA – 195 Minute Chart

I have an audio alert set at about $1.00 below the break-out level on the daily chart, but I also have an audio alert set on the break of the consolidation pattern upper trend line …

Bottom Line – BA looks like it could be getting ready to begin another expansion phase on the daily time frame.

Cheers … Leaf_West

Potential Wedge Patterns …

I mentioned in a blog post yesterday that I was looking for the overall market to have a bit of an oversold relief bounce this week … today really just confirmed that the short-term selling is probably all exhausted, and I am still looking for a bounce into month-end.

If we are indeed going to bounce, I like looking to any of my continuation scans (bull-flags, wedges) for possible long candidates …

Here is the TC2000 logic behind my 195-min wedge scan …

The first condition has price closing for 5 consecutive candles below the 20-period linear regression of the upper channel of the stock price highs x 1.0095.  The second condition has price closing for 5 consecutive candles above the 20-period linear regression of the upper channel of the stock price highs x 0.9905.

The next two conditions set the requirements for the “wedge” style consolidation pattern … the top linear regression line has to be downward sloping and the bottom linear regression line has to be upward sloping.

The final condition looks to the bigger trend and ensures that we are looking only at stocks that are trending higher overall.

Here is the results when I apply that scan on my main scan list of about 600 names …

There are 12 names that meet my scan conditions on the 195-min time frame.  The far right column actually measures the 3-day relative strength of each stock versus the SPY ETF.  0.0x equates to the stock exactly matching the SPY 3-day return – any number greater than 0.0x is a stock showing strength that I like to look for.

AAPL is a stock interesting as it appears that investors are becoming more and more comfortable with the iPhone 8 launch actually happening on-time in mid-September.  I am expecting the stock to continue to do well into month-end and probably right up until the end of the first week in September (September 8th).

AAPL 195-Minute Chart

You can see the wedge that is drawn with white lines automatically on the price chart … price made a nice little inside candle today with the last 195-min candle, which could mean that end of day pause was a consolidation pause that precedes an expansion phase push higher starting tomorrow or Wednesday.  The Relative Strength vs the SPY Indicator in the right panel shows that AAPL looks fine here and bulls should be fine adding to or starting a multiple-day positional trade once we can break this wedge pattern.  The upper wedge pattern line is at $161.67 … set your audio alerts!!

Note the linear regression lines on the R/S chart … I use those for several scans I like to run on that indicator.  I will go over some of those as we go forward into the busier fall trading season.

If you use TC2000, drop me a request via email and I will send over to you the pre-built scan conditions so you can incorporate it into your post-market review of the markets.

Cheers … Leaf_West