OT: Stock Market Information

[Jeffreauxdawg]

Since our last thread was hijacked. Here is some useful information for many. My last post was about don't fight the Fed, but everything else says that this market is a bit overcooked. Well Powell came out this morning and said he can't fix everything and problems lie ahead.. So the market didn't fight the Fed on that either.

About 11:30 this morning an important S&P trendline I have been watching for almost 2 weeks was broken. This line hits several important points since March and this is the first time we went south of it since April 8th. It makes a neckline for a head and shoulders pattern. A head shoulders pattern is a very bearish signal once the neckline is broken. The yellow line is the neckline. The redlines represent the next significant levels of resistance.

View attachment 16168

Any trendline of significance will act as support or resistance to the market. I was confident in this trendline and traded against it all afternoon. Once we broke through, it became solid resistance for the rest of the day as you can see here.

View attachment 16169

What makes this particularly significant is that this neckline matches up almost perfectly with the 50% Fibonacci retracement levels. You will also see that the other two redlines line up with the next 2 fib retracement levels.

View attachment 16170

What does all of mean? Well as long as we are on the south side of the yellow line I have a bearish bias. If we gap up over it tonight, then I will look to see if we can reestablish it as support. If not, I am all cash as of this afternoon in my trading account. I will look to make short trades until we establish a new resistance level.

Just something to share. Going to let someone pick this apart.

Last time I posted a pattern it was a rising wedge that we broke through for about a day. State U mentioned the wedge as poor pattern, which it is... So he said that the Fib 50 retracement level was more important... He was right. Now we have a head and shoulders, which is the most reliable pattern and it's really close to the Fib 50 level too...The next few days could be showtime for the bears.

ETA. That trend/neckline should be in the 2830 range in the morning. If the bears make a break below 2790 early... Watch out. If we get above 2830 and hold for a little while, the bulls win the day.

 

[57stratdawg]

Good stuff. Been a rough couple days.

 

[TheStateUofMS]

Nothing wrong with the patterns you're pointing out. I love technicals, but if they were always right, there'd be no point in fundamental analysis. Sometimes you can identify several patterns within a chart as well and they conflict with one another at times. I use a lot of indicators to try and confirm the chart pattern such as volume (can't be a breakout without volume confirming), relative strength (stock oversold or over bought), money flows, moving averages (I prefer exponential over simple moving averages), short interest %, MACD is a big one too, etc. For stock picking I'll use the charts to try and identify a good entry point, but usually if I'm going long a stock, it's going to be 75% based on the company's fundamentals. A bad chart used to frighten me.

I'd say I'm a novice when it comes to fibs. I do find them to be valuable to me personally, but I'd still consider myself a novice at fibs, so I could be wrong here but I would draw my fibs using the S&P low on 3/23 (2191) to the S&P high on 4/29 (2954). It's hard to tell from the picture though, but here are the retrancement levels I get when I use the figures I just gave (again I could be wrong, so not trying to take a shot at you):
View attachment 16177

You could call it a head and shoulders top too on a short term trading scale. Several folks would, but I'm looking at the market as more of a range right now: S&P 2,450-2900ish.

I was telling clients when we were in the midst of -7% days we were in an "information vacuum" and markets hate uncertainty. Once we started getting more info (testing, case count, death count, treatments, vaccine development, lock downs, etc.), the market would likely put in a panic low. Soon thereafter the economic fallout would start to become quantifiable and the "information vacuum" would start to dissipate although tons of other uncertainties would remain in place. After than panic low, you likely get a furious rally you want to be a part of (so no need in selling out of the market completely if you have 1-2 years of liquidity on hand. Re-balancing and increasing equity exposure to high quality companies in the midst of the sell off was the way to go), but after that initial rally off the panic low, the market would likely trade sideways in a range for a good while until we get more info that definitively says whether we're getting out of the woods in the not so distant future (market may break out to the upside) OR we're not sure when we're getting out of the woods (market heads South again) any time soon.

As of now that market pattern has played out.

I was initially in the re-test of the panic low camp. It seems like we won't re-test unless we get worse case scenarios as real possibilities (vaccine trials fail, second wave, etc). Having said that I'll stick with a range of S&P 2,450 - 2,900ish until we get clarity. Things will be volatile for sure. A lot of people are acting on emotions in this market I feel from talking to clients. I'd say stick to your long term plan until the information changes and we need to re-evaluate.

I think in the end we beat this virus.

My last "big call" was on 3/19 and I listed a bunch of stocks to buy. I would still stick with that list, but I'm not making a "big call" to go buy right now. I think we may be getting kinda close though. There are some good values starting to show.

Good luck to all.

 

[Apoplectic_Objurgator]

i usually just look at the parking lot at walmart to determine the market future....guess that model is broken in this situation

 

[Jeffreauxdawg]

Good post. I am sticking with the fibs from the low back up to the February high vs the 2954 high... They seem to line up with the major resistance levels and I will assume that it's where the instutional money is going to come in and out. Buy I will keep an eye on the levels you have as well. We both agree on 2450. It would take something crazy to go lower than that level.

I agree 100% with your statement on fundamental vs technical analysis. I only trade fundamentally sound stocks. I use technicals to pick entry and exit points. Thanks for the input.

 

[TheStateUofMS]

Every WMT I see is always packed because WMT, TGT, HD a few other big box stores are only ones open. Taking market share of local businesses.

WMT outperforming the S&P this year and for good reason. Unfortunately this situation right now is a zero sum game for many and that gets more true every day lock downs are in place....

 

[Jeffreauxdawg]

Bulls about to make a run... Above yellow I am bullish, but if we bounce back of the red line, I am going short...View attachment 16178

 

[TheStateUofMS]

I liking T right now as a place to hang out in for a while with not too much downside. I bought in at $28.08 yesterday near the end of the day. It's around 7% above its low and yielding 7.2%. The div is safe and the core biz is strong. I was 21% cash Monday, but now down to 10% after buying into T yesterday and also started a new position in PYPL.

I also added to current positions yesterday in SRPT, PEP and CVS.

ETA: Also looking at CSCO as a place to hang out in similar to T, but with some possible upside potential and a 3.3% div. I actually bought it pre earnings yesterday and got spooked this morning when pre mkt it was below my cost. I took a small loss but looking to get back in. Even I make a mistake sometimes***

 

[Shamoan]

good call in here gentlemen. i dont understand that prediction, but ya nailed it.

 

[TheStateUofMS]

Well...what moves have you been makin, big hoss?

 

[Jeffreauxdawg]

Bulls win... today. It was a blowout. A couple of lines I added this morning really came into play. I decided to clone my neckline and take it up to the next level of local resistance and call it my go line. If we got above that I was going all in on longs after breaking the head and shoulders.

I made the call around 9:00am the bulls were going to go for it. And they did. I added in a blue line at about 11:00 am as the daily trendline and it was in play all day. As soon as I noticed that trendline was lined up to meet my go line (which it did), I took a very bullish bias. I took long positions in AMD, SQ, SMG, SMH, SPY and WY. The bears may have one more trick up there sleeve, but I think they are going to save their efforts for the top of this range 2950-2975 to make sure it doesn't get too far away from them. (I was not perfect today, I took a cocky short around 9:45 this morning convinced we would come back and test that red resistance level and we never did.... I'm done shorting this market. I am just going to move in and out of long positions.)

I second State U's T rec for buy and hold. It's a super high yield T-bill of sorts these days.

My go line is 2850ish tomorrow at market open. If we stay above until then, the bulls have probably won this game. Between yellow and green is the minefield... no idea where we are going. South of yellow means another day of fighting. I'm not ruling anything out yet, but it looks like another little rally back up is in order.

View attachment 16183

 

[40 acres and a mule]

Please excuse my ignorance. What is "T"? AT&T? Treasuries? I am jealous as hell of you guys. Wish I knew more. Hopefully would have made fewer mistakes.

 

[Jeffreauxdawg]

It ain't over yet, because these are no ordinary bears... Much like Pearl Harbor, the bastards are sending in second wave attack from the east at sunrise.

Before my morning run I checked in on the overnights and the attack started.. they moved right through the minefield, but hit my yellow wall (The yellow line is that all important neckline from the head and shoulders pattern.) So I went on my way.

View attachment 16186

But as I said, these are no ordinary bears. They didn't give in and as of this post, we are back in the bears territory.

View attachment 16187

Will see what happens at the open and how everyone reacts to the retail sales news... Seems like worse news is better for the bulls.

Important numbers for the day on the S&P

Above 2850 bulls territory
2830-2850 no man's land
2790-2830 bears territory
Below 2790 watch out

 

[TheStateUofMS]

T is the symbol for AT&T yes.

 

[TheStateUofMS]

Nice work. It's all good until, like you said, "bombs are dropped." US-China technology war heating up this AM. What was safe yesterday is now in the blast zone.

ETA: I really don't care much for overnight futures. They're wrong all the time. They shouldn't be ignored, but they aren't reliable. "Futures Fake Out" is what I find myself constantly saying and that goes for futures up big and down big.

 

[Jeffreauxdawg]

Nice work. It's all good until, like you said, "bombs are dropped." US-China technology war heating up this AM. What was safe yesterday is now in the blast zone.

Now a tech war? Great. Of course I loaded up on AMD and the SMH yesterday.

 

[TheStateUofMS]

https://www.cnbc.com/2020/05/15/us-...ut-huawei-off-from-global-chip-suppliers.html

I really like AMD. Lisa Su their CEO is top notch.

 

[Shamoan]

Only move I made yesterday was selling VTIQ. Bought at $18, sold at $26. Sold a bit early, but I’m taking my win and moving on.

 

[TheStateUofMS]

Took a shot on SRNE this morning at $4.03. They claim to have a Covid anti body.

https://www.foxnews.com/science/cov...rmaceutical-coronavirus-antibody-breakthrough

View attachment 16188

ETA: sorry if the red is blurry. Article might be better for most.

 

[Seinfeld]

How do y’all feel about some of the online retail ETFs like IBUY and ONLN? I know that nothing’s ever fully “safe” in times like these, but that sure seems like a space that’s going to continue to do at least do ok through the rest of this mess.

 

[TheStateUofMS]

Sold the 6/19 $4 Call for $2.00 against my shares as well. Looking good at the moment. Highly volatile trade.

 

[TheStateUofMS]

Hmm interesting never heard of them, but there's an ETF for everything these days. Sounds like a pretty good theme.

I like ONLN a lot more than IBUY based on the top 10 holdings. IBUY's fee is higher too (.65% to .58%)

 

[TheStateUofMS]

That's great man. Focus on the % gain and keeping that proper behavior. Rarely do we ever hit the exact top and bottom of something. You will sometimes, but go ahead and get it out of your head that your somehow going to be a really good market timer.

ETA: Just looked at VTIQ. Never heard of them. Looks very sketchy.

 

[Jeffreauxdawg]

I'm going to look at those ETFs too...

I think the bulls are about to pull the string on the bear trap. Volume has been low and plenty of stocks are up, but FAANG+Msft are all down. Nice reversal signal candle on the 15 minute chart. When money pours into the big boys the market will jump.

View attachment 16190

 

[TheStateUofMS]

That long wick on the last candlestick is favorable for a low potential low and resumption of trend though!***

 

[Shamoan]

I saw a thread about it (purely speculative) on tigerdroppings money board. It was a small position as I continue to learn the ropes. Glad I got in and now out.

what apps do y’all use and what’s a good “analytics for dummies” starting point?

 

[TheStateUofMS]

Here's a beauty of a chart and one I have owned as a long and traded at the same time for a while: SRPT

View attachment 16192

This one has a good looking inverse head and shoulders on it. It's also got the golden cross (50ema bullish crossover of the 200ema). MACD and RSI both bullish and volume has been good. You could say it's double bottomed too. It's put in a higher low on a longer scale. A lot to like here. And like I said previously, tech analysts could draw many different bullish charts on this, just depends on what works for you.

It also has some catalysts upcoming from trial data from drugs currently in their pipeline. They already have a drug on the market and have many other promising partnerships. CEO and management are great too. They're in Gene Therapy (which is hot right now) with a primary focus on Duchenne's Muscular Dystrophy.

PFE is trying to develop their own drug for DMD as well, but so far hasn't been proven to be as good as SRPT. PFE reported some drug data today and SRPT is up nicely bc PFE drug not as good as SRPT's.

 

[idog]

forgive my lack of education on this topic - i don't understand all the lingo/graphs but the vibe i get from all this is that you expect a positive trend? if i am correct then what do you expect to happen when the extra unemployment benefits end but the unemployment numbers do not dramatically improve? i saw a stat yesterday that they expect 40% of the sub-40k jobs lost to remain unemployed. i'm no analyst but i expect another bottom in august/september. thoughts?

 

[Seinfeld]

Yeah, what’s funny is that I had no idea they existed either up until about 3-4 weeks ago. I really wanted to get in on some individual online retail stocks like Amazon, but I just don’t have enough in my “for fun” trading account to be spending $2200 on a share of anything. So I started to do a little research and lo and behold, an article recommended a few of these ETFs for people in my situation, and I think I may jump on a couple

 

[TheStateUofMS]

SRNE over $6 holy smokes

 

[Beretta.sixpack]

I like AMD as well.....here are a few other ive bought last two weeks:

past couple of weeks i have purchased AMD, Exxon, Chevron, and ADPT.....

I have a love for Chevron and Exxon....blue bloods that are down, and have a high dividend, and high score....this is my strategy currently....blue bloods way down....

i am taking a beating though on them, but plan on holding a while..

 

[TheStateUofMS]

Just open a brokerage account any where. It's free to open and trade at most big companies now. Their quote pages will have lots of research information, but you also have to search on your own for good material information about a stock from various sources. It's not all going to be in one place. Articles posted on yahoo, cnbc, marketwatch, Barron's, etc all have lots of information.

An underrated spot to check is the company's "investor relations" page as well on the company website. From there you can see press releases, earnings calls (audio and transcripts), company presentations in power point form, SEC filings, etc. This is always a good resource.

 

[Jeffreauxdawg]

Here's a beauty of a chart and one I have owned as a long and traded at the same time for a while: SRPT

View attachment 16192

This one has a good looking inverse head and shoulders on it. It's also got the golden cross (50ema bullish crossover of the 200ema). MACD and RSI both bullish and volume has been good. You could say it's double bottomed too. It's put in a higher low on a longer scale. A lot to like here. And like I said previously, tech analysts could draw many different bullish charts on this, just depends on what works for you.

It also has some catalysts upcoming from trial data from drugs currently in their pipeline. They already have a drug on the market and have many other promising partnerships. CEO and management are great too. They're in Gene Therapy (which is hot right now) with a primary focus on Duchenne's Muscular Dystrophy.

PFE is trying to develop their own drug for DMD as well, but so far hasn't been proven to be as good as SRPT. PFE reported some drug data today and SRPT is up nicely bc PFE drug not as good as SRPT's.

Well done.

 

[Jeffreauxdawg]

This afternoon may be the end of the fight. If Jordan can come in and close it out the bulls may win the series. The green line definitely has become the battle line. What's also weird is that the early morning trendline for both yesterday and today took us almost right to the green trendline. Yesterday we crossed right at the close. And today, it seemed like there was no chance and we had a nice after lunch rally that tookk us right up to the intersection of the morning trendline and the longer term local trendline... I don't know what that means, but I have heard that the market knows where it wants to go every day.

View attachment 16194

ETA. If we jump the blue daily trendline and hold it for a candle or two (15 minute candles) it's game over. We have tested it 5 times since the lunch hour. It's obviously the last line in the sand for the bears.

View attachment 16197

 

[Shamoan]

I’ve got both HD and LOW and am curious when y’all think I should get out. Got HD at $203 and LOW at $95. They are both near pre-rona highs but their earnings release next week and I’m expecting them to crush estimates. Thoughts?

 

[TheStateUofMS]

I like more HD more overall, but both good companies. LOW might have more upside, but HD a little more stable. LOW has a great tech savvy ceo and he's done well there.

I would prefer HD over LOW. Don't sell your HD. That's a long term hold. A great company to build a position in. Add to it on bigger pull backs ( at least 10% from whatever the recent highs are).

You can make your own decision. Research both and figure out which one you like best. I know personally I never go to a Lowes. I always go to HD. That means NOTHING though!

 

[Jeffreauxdawg]

forgive my lack of education on this topic - i don't understand all the lingo/graphs but the vibe i get from all this is that you expect a positive trend? if i am correct then what do you expect to happen when the extra unemployment benefits end but the unemployment numbers do not dramatically improve? i saw a stat yesterday that they expect 40% of the sub-40k jobs lost to remain unemployed. i'm no analyst but i expect another bottom in august/september. thoughts?

What you see me posting are my own charts that I am creating. This is called technical analysis. Basically there are so many people, doing so many things in the market, that patterns tend to develop. All I am trying to do is interpret the patterns so I can determine when to get in or out of the market.

One example is because portfolio managers of mutual/hedge funds want to be diversified. Every so often they will rebalance to make sure they don't have to many eggs in one basket. Those guys have so much money, they can't sell a single position in a single day, or even a week in many cases. Those guys tend to get in a pattern and do this together. Ever seen a stock have a great earnings report, but go down for a few weeks in price? Well that's a good time for a fund to unload a bunch of shares since there are so many willing buyers

It seems like voodoo, but it's similar to following rules in blackjack. Don't hit if the dealer has 15 etc... Somebody else invented this stuff, I just follow their rules... Or at least try to.
Here's an example today. I created a trendline on my daily S&P chart at 10:15 am this morning projecting what I considered the daily trend. If you follow the blue line, it would suggest that the S&P would close the day at 2872.

View attachment 16198

We finished at 2864 ish.. So it's pretty close. We kept getting hammered around 2860 and it kept us from getting there. I will post another reply to show why. But here's the end of day chart.

View attachment 16199

Now with that said, there is not a lot of long term forecasting that can be done with technical analysis. If I could,bi would be a trillionaire. But this thread started because I saw a pattern called a head and shoulders that if completed, would make for a pretty good chance of a major decline. The market has just about defeated it in my opinion, so I think we may be headed back up next week.

To your ultimate question. I do think that we should see a pullback. But I also understand why the market is capable of going higher. Ultimately, the vast majority of large public companies are going to survive this crash. Can we say that about the smaller, private companies? So in the long run, the public companies are going to gain market share from the smaller companies that close the doors. Not to mention, the businesses that benefit the most from this sort of thing are the big boys in the market. Microsoft, Apple, Amazon, Google, Facebook.

 

[Jeffreauxdawg]

Well this is my last post on the pullback this week. To humble brag a bit, I feel like I read the tea leaves well, but the markets are a *****. I felt good about going long yesterday and put a bunch back in, including a big chunk in AMD and the semiconductor ETF (SMH.) Because of this thread, I discovered early this morning that my semi play was in trouble. I dumped the SMH and took a hit. But I held on to AMD after reading they are insulated. So, ultimately I am in the red for the week, but I am well positioned for a rally...

Now about that rally. How do you beat a head and shoulders pattern like we were facing this week? With an inverse head and shoulders pattern of course... I didn't see until after the market closed today.

View attachment 16200

Because we closed above my green "go line" the past 2 days, I am going to call that support going forward. While there is always a chance of bad news screwing everything up over the weekend, this looks like it will breakout next week... But keep an eye out Monday morning. The two necklines intersect right around market open... I feel like the bears blew their chance on this go around.... But they are sneaky bastards.

Thanks for the handful of you interacting. It's keeping me sharp. StateU got me out of some risk this morning and I will be researching Seinfeld's online shopping ETFs for the weekend.

ETA. Chart from my PC vs phone.

View attachment 16201

 

[TheStateUofMS]

I don't want that to be the impression I'm giving at all right now. I think the market is range bound for a while: S&P 2,450-2900ish. There was a lot of intra day market movement talk in this thread.

I don't think there's anything wrong with your view. It's very pessimistic, but it's also possible. If that's your view then maintain your equity exposure to whatever you're comfortable with. I think the market is probably ahead of itself at the moment. The market is expecting more stimulus and a decent recovery on the economic front. I'd hate to bet against America, but I see your concerns. I'd stay invested and let's see what happens for now.

 

[TheStateUofMS]

That was a great explanation of how the big boys build and sell positions.

What do you think of SRNE?