Daily Bull Flag Scan …

I’m not really looking for swing trades here in the current market, but I did look at my daily time frame bull flag scan results earlier today.  The best looking bull flag identified to me was for CHRW the $12.7 billion transport company.  Here is the bull-flag setting up on the daily chart …

CHRW – Daily Chart

You can see the nice little bull-flag set-up on the price chart … price is just underneath the 20SMA and its signal line so if price is going to break this flag pattern, it will also return to the bullish side of the moving averages.

The Relative Strength indicator on the right-side panel shows how well CHRW has held in during all of the selling in the market over the past week or so … impressive.

The last quarterly earnings report was released on January 30th and revenue was up 16.1% which was a nice little beat … earnings also beat expectations ($1.08 vs $0.84).  If the global economy is indeed accelerating as well as most pundits are saying, transports including CHRW should have the wind at their backs for the next several quarters.

CHRW – Weekly Chart

The weekly chart shows how price is still above the weekly ATR support level … the trend strength histogram is still in the extreme trend strength warning zone, and that is the only thing negative I can say about CHRW’s charts.  Normally, an extended weekly chart would turn me away from getting long a stock based on a daily chart pattern, but the monthly chart is not extended so I think that any consolidation on the weekly chart could end up being shorter in duration than normal and indeed may  be complete when this daily bull-flag pattern breaks to the upside.

CHRW – 195 Minute Chart

If the daily chart is going to break the bull-flag pattern higher, it will need to first break the 195-min ATR resistance level at $93.61 … I have an audio alert set there, and I will revisit this stock when/if that ATR level is taken out.

Cheers … Leaf_West

TC2000 …

One of the traders that follows me has reached out to get more info on how I use TC2000 … I have been really busy on some personal business lately (and will be for several more months), but I have committed to get him copies of my TC2000 page formats over the next couple of weeks.

Because I thought it was timely with the more volatile markets we are now facing, and because I had a little bit of time today, i decided to write a PDF on how I use TC2000 for intra-day trading … I have posted it under the Education Tab as well, but you can access that TC 2000 PDF by clicking here.

Cheers … Leaf_West

Energy Has Found its Resistance Level …

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

 

Has the Next Leg for Bonds Begun? …

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

Crude is Right Near the End of this 3-Wave Structure …

Lots of people waking up to the move that crude and energy stocks have made since I talked about a possible swing low in energy stocks back on August 29th (see post here and here).  Like happens often, the market pundits and talking heads starting recommending the sector as we push into resistance levels/zones (i.e., the SLOT).  Here is how I see the charts …

Crude Futures – Daily Chart

Crude is pushing right into the measured 1.272x target for the 3rd wave of the move coming off of the low made this past summer … I see 3 nice waves to the move and three minor waves in the bigger wave 2 and the terminating wave 3.

So for traders that don’t trade crude futures, how do they capitalize on this end to what could be only the first leg higher in crude in a bigger commodity rally that could play out over the next several years?

S&P Energy Sector – Daily Chart

The light blue warning candles that my software is painting, warns traders of an extended move in price away from the slower moving averages … the “return to the mean” effect is telling traders to take profits here in the short-term and/or sell some short-dated at-the-money or near-the-money calls for XLE or ERX the leveraged bullish ETFs for the energy sector.

3x Bullish Leveraged Energy Sector ETF – Daily Chart

The January monthly $40 calls for ERX can be sold for just under a dollar today …. I will look to sell some of these as well as looking for intra-day moves to the downside, as the intra-day moves lower are likely to be bigger than the shorter-term moves higher.

Cheers … Leaf_West

Today will Be a “Fade the Highs” Kind of Day …

I always try to get a sense of what type of day it is possibly going to be well before the start to the start of the regular cash trading session.  Today it looks like the NASDQ will be the kind of market where it will be ok to try and fade any push to new highs after the opening.

NASDQ Futures Contract (NQ) – 7 & 12 Vision Renko Charts

The bigger time frame charts are in a nice bullish trending position … we have now recorded a negative divergence signal on the 12 Renko chart, and we have pushed above the 1.0x Standard Deviation level on price momentum for the 7 Renko chart.  To me that 6617.50 level is likely going to be the high for today and probably for the rest of the week.  To me that means it will make more sense to try and look for short entries intra-day today and possibly tomorrow.  Longs will probably only work on larger oversold intra-day signals …

NASDQ Futures Contract (NQ) – 2 Vision Renko Chart

The 2 Renko chart painted some dark blue candles with pink divergence dots … this is another good sign that the pre-cash session highs are likely the high for today.

Cheers … Leaf_West