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Yesterday's sideways trading left a doji in SPY and higher trading today will create a bullish Doji Sandwich pattern, marking continuation for our upside trajectory. Lower trading today would signal an Evening Star for yesterday's doji and would likely be followed by a pullback to the 8 ema in correction of the overbought condition. Of course markets can correct by going sideways and that would be just fine. Certainly we are in an up-trend and allowing the 8 ema to catch up would be healthy for that trend.
Basically I am saying that the market will either go up, down or sideways. Okay I am making a bit of a joke there. That's a pretty easy prediction, but I am also saying that in all three cases, my market timer remains green and it would take some significant distribution to change that. I find that to be an unlikely scenario at this stage. Momentum is strong. Remember that Newton's law states that:
|Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it.|
This does apply to financial markets and is the basis for the idea of trend trading. The trend will likely remain the trend unless some other force reverses that trend. Here is the SPY chart.
Thanks for all the well wishes yesterday. I am feeling significantly better although not 100%. This virus has definitely turned the corner and I am finding it easier to function this morning.
Indices found new highs yesterday after putting in doji star signals on Monday. Although they did not come off of a significant downtrend, markets gaped up back above their respective 8 EMAs and left those stars in their wakes giving us "Trader's Best Friends" and letting us know that the bulls are definitely in charge and the up-trend continues. Today's futures are flat to the green side but some consolidation here after yesterday's big move would be healthy. My portfolio continues to grow even as I have trimmed profits on the way up. I will be looking for new setups to rebuild my port as markets consolidate.
Here is the SPY chart.
Bad feeling is gone in the markets and my timer is still green and about to be more green with this pop on strong futures. Positions in my port are moving nicely and SPY will make a nice move after consolidating nicely around the 8 ema.
However, personally, I feel like crap! I have this awful cold/flu that has knocked me upside the head and I am struggling to write this report so that's all you get.
Here is a chart of the SPY.
Markets are spooked about unrest in Eastern Europe. I will not try to analyse what Putin is thinking as I am not capable of thinking like a terrorist. Needless to say, the man is a despicable, parasite who has been given way too much respect in recent years. What happens going forward is anyone's guess.
Shiny Medals are surging in defense along with oil and nat gas which are two commodities threatened by this nightmare in Ukraine. Many of the large oil and gas exploration companies will hold off their business ventures in the region as this drama unfolds causing prices to rise.
Certainly markets are reacting strongly but whether this turns out to be a knee jerk over-reaction or the beginning of a strong correction remains to be seen. All I can do is watch the tape. Currently the SPY is set to open right around the 8 ema and the previous resistance turned support level. The question today will be, "does that level hold?" Here is the chart.
Yesterday's trading brought some wonderful opportunities via Bullish Kicker Signals. Kicker Signals are one of the strongest candlestick signals and signal a strong reversal in trend. In this case, we picked up DANG and PEIX first thing in the morning when they gaped up from their recent down trend following good earnings. These trades proved to be very profitable. In one day we took partial profits of up to 30%. My February profits are now over 9% and although I had some losses in January, my overall YTD profit is over 8%. As I keep telling folks, its about the overall picture. Take small losses and larger winnings and you will be profitable overall.
Meanwhile SPY finally lifted her head and closed firmly above resistance after retesting and bouncing off the 8 ema. That resistance is now set to become support. Here is the chart.
Jobless claims came in better than expected this morning taking volatile futures from green to red to flat. Volatility has been creeping back into markets setting up to let me add back to my VXX short. Investors spooked by crazy politics in Eastern Europe while waiting for Ms. Yellen to testify today are whip-sawing markets.
But those moves are within a fairly small range and the tape continues to base out as the 8 ema catches up. I continue to watch for SPY to finish consolidating so it can take another leg higher or reject the current resistance level that it is clinging to. Yesterday's close in SPY is right on that line. Here is the chart.
Markets continue to base out as they set up for a move higher. Futures are fairly flat to the green side but many individual plays are making big moves on good news. I bought PLUG yesterday and will enjoy the ride today on Walmart news. Others in the chat room are trading PRAN which is also up nicely on an analyst upgrade. My SUNE is moving nicely also. Still watching for the breakout in the S&P as the 8 ema catches up. Here is the PLUG chart.
Futures are relatively flat after making new highs in SPY yesterday. Although the new highs did not stick and the index closed back at the resistance level. I suspect indices will take their time to base out and consolidate before heading higher. Some profit taking at these levels is not unexpected. I do note a bullish cup and handle pattern in DIA that has not yet broken the highs made in January. All in all my market timer remains green as markets find their way to higher prices while consolidating any big moves. Here are the SPY and DIA charts.
Markets seem to be quietly bullish as SPY sets to open slightly positive this morning. The environment is one of neutrality with US indices basing out near their respective highs as Ukraine works to heal itself after ousting President Yanukovych who fled into hiding on Friday. Meanwhile the economy stateside is like the little engine that could. We think it can recover.
SPY is crunching the resistance level of all time highs with the 8 ema. I am watching for it to move through or get rejected as it continues to set up. My market timer is still bullish and I will add and drop positions individually as I see fit. Here is the SPY chart.
The Morning Report - Continuing the Test $SPY $RLD $PEIX $ABTL $NBIX $CROX $AEIS $SPWR $BLOX $ARUN $MNST
SPY continues to test the resistance level of recent January highs crunching it with the 8 ema. The DIA and the IWM have room to move higher toward those resistance levels and the Q's are setting up at a whole new level. I am loathe to over-think the upcoming level in SPY while the other indices have room to move but the S&P holds the most components in the overall market and tends to be the best tell. None the less, these charts tell me that the bulls continue to hold control and that trajectory will continue higher.
Meanwhile I have been doing very well this month, scaling profits and making new ones. Here are some charts I am looking at.