Last weeks was received well so here's this week's! Hey all, below are some technical analyses for the upcoming week. It takes hours of work to go this far into detail so I hope you guys find a good bit of use out of it. There are charts involved so I'll post the link that includes them at the bottom.
Market Summary
Last week we saw the markets continue their drive to be pretty much unchanged. Any gains were sold and any sells tended to be bought, though the overall theme was selling. If you'd left Monday at mid-day you could have come back Friday mid-day and not have missed anything. It was an interesting week and volatility played exactly as we warned it would. It would explode on any weakness and then collapse even faster on the rallies. Well, /VX and the VIX both followed the story, we think that's nice of them.
Key Events for Next Week
Next week we look for any news from OPEC to jostle the oil markets and any shifts in the political race to shove the stock market around a bit. Honestly we still don't expect too much movement until something happens in the bonds or if oil gives up and crashes or commences a serious post 50 rally. Without any sort of out-sized movement in something outside the market we aren't expecting a crash--fortunately we are expecting a crash in the bond market. So if you're looking for something to play, interest rates are flat again and the curve flattens every time the bond futures rally. Principle risk is greater than it seems to many who were told bonds are a safe and long-term life investment. Too bad nobody understands finance and why 2% fees on a 1% annuity are a bad idea. By the end of the week we wouldn't be surprised to see some more selling to meet buying and the /VX futures to continue to swing out-sized to the moves in the market.
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SPX Overview
Last week we stated, “Heading into next week SPX is looking a bit better. I think we are still susceptible to red days. But for now we look slightly more bullish than bearish. The SMA’s still do not look too fantastic, which is why I think we can have selloff days however, the short term indicators look good.” For the most part this is just what we saw. Overall the week was green however, we did start the week off with some red. SPX sadly is going to mostly continue trading like this. Constant up and down days with a slow trend. For the last few weeks the markets have shown a lot of selloff days, yet overall have been trending up. We are even in a small wedge pattern right now. Heading into next week the indicators look slightly bullish. The MACYD is above the 0 line and SPX is trending above all of the SMA’s. The stochRSI is neutral right now. Look for a break in the wedge pattern, while the indicators look slightly bullish, we really didn’t get the red September a lot were expecting. It was almost a breakeven month. .
Commodities (Technical Analysis):
Natural Gas, /NG
Last week we said, “Heading into next week NG actually looks less bullish than usual. With the close under 3.00 and the short term indicators bearish, we may see a little more selloff. . . . Look for a breakout again on the close over 3.00 and a down trend on a close under the 13 SMA and 2.95.” Last week we finally had a solid break in support with NG. It closed below 2.95 and the 13 SMA. In addition it even closed below the 20 SMA. Right now the overall trend line is still bullish. We haven’t broken the long term trendline however, with the MACYD breaking down (fast MA below 0), the stochRSI under 20, and the SMA’s losing support, it looks like the short term has more selloff in it. The reason I think there is still another longing opportunity is because of two reasons. The first is it is still in a partial Steph Curry pattern. It still is well above the 60 SMA (red line). Next the long term uptrend is still trending, which is actually at the same place as the 60 SMA right now. So at about 2.79-2.80 we have the 60 SMA and the overall trend line. I think we will test this area and that will be the major telling sign of whether the bull trend is over or not.
Oil, /CL
Last week we were straight up bearish on oil. There is no way of denying that. Oil even started off the week downtrending, then an oil announcement came up. OPEC actually agreed to limit production and possibly even cut production. This is incredibly bullish news for oil. It is important to note that news can outweigh any possible technical indicators. Really the main way to play news on a technical level, is just through support and resistance. When a stock pulls a 180 in a day, the indicators go out of whack. You see this in biotech dumps a lot. With that said, for the next couple of weeks we are just going to be using chart patterns for oil. It is being traded on news and emotion. You can see it was in a small downtrend pattern, the day the news was announced it busted through that no issue at all. Right here is where the interesting play lies. We are testing the overall downtrend line right now. For the past couple of days this is where it got halted. Based on the trendline and price support, 48.50 will be the key number for a trend change. If we get a close over 48.50 I do think we will test the 52 week highs, 50 at the least. This week we added a new support line for the wedge pattern. Next week we will take out the short term downtrend line. Also while I think they are skewed from the news, the MACYD and stochRSI are both fully bullish. MACYD over the 0 line and sloping up and the stochRSI is in full breakout mode.
Gold, /GC
Last week we said “Right now gold is squeezing. It is playing inside this tightening wedge and when it breaks in one direction, it will be a massive move. Overall the long term indicators look good still so we are leaning towards a bullish breakout.” Gold actually sold off last week however, it is still inside of that wedge pattern. There was a tiny close under it, this is really important to note. While a couple of weeks ago it broke the trendline and then recovered well, it did not close below the trendline. This week it did. Heading into next week the MACYD is below the 0 line and sloping down, in addition the stochRSI also broke below 20. Gold is also closing below the 13 (green) and 20 (ornage) SMA lines. This is all overall bearish. Gold does have some hope, and that is all the support it is at right now. Right now I cannot say that a pop in gold would be a bullish trend however, I think there can be a solid one based on support. There is the 100 SMA (light blue) at 1312.8 and in general the 1,300 support line has been incredibly strong. If you look at the highlighted area gold broke the 100 SMA but then bounced right off the trendline. This time gold slightly broke the trend line and is testing the 100 SMA. Look for that same type of support. Any close below 1,300 is bearish and is a sign of a bearish trend. There is one more thing I want to touch on. I know most of you play GDX when trading gold. Look at the GDX charts, slightly different. We have actually already broken the long term bullish trend line here however, we are inside of a short term trend line that is still holding. It hasn’t broken trend yet. It has however, already broken it’s 100 SMA. Seems like GDX has actually be moving a little ahead of gold on a purely indicator basis. Which is really bizarre to be honest.
Biotech / SPBIO
Last week we stated, “Heading into next week we may see a selloff in the early week. You can see this week we got denied by the YTD highs. Not the 52 week highs, but the highs for 2016. Right now nothing has fully crossed but the MACYD and stochRSI both look extremely close, this could indicate a selloff at the start of the week. The overall indicators looking super bullish still is what suggests a dip buy.” Sure enough, we got the selloff we were expecting, and to support the notion of a dip buy, it halted right on the support line we had drawn in, then the following day bounced off. This played out really well. Heading into next week the indicators still look a tiny bit bearish however, are showing the signs of reversing. The MACYD is above the 0 line and the fast MA is sloping up now. The stochRSI is still below 20 but also sloping up. Overall the trend looks strong still. As long as there isn’t a close under the 20 SMA (orange) and 5,000 I think SPBIO still looks solid, still a dip buy. 5,375 will be a major hurdle to get over but if we close over 5,400 then I think we will trend to the 52 week highs. A close below 5,000 and our run could be over.
^ Link includes the charts and other information!
Submitted October 03, 2016 at 04:14AM by FirstAlways http://ift.tt/2dTfLs9
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