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Weekend Journal Saturday August 5, 2017

Posted on Saturday August 05, 2017

 

This Week’s Price Action

Weekly Summary:

  • Wild Summer trading range forms potential bullish pattern to take us to 2500.
  • Very little bearish thesis at this point, but outline my thinking in bottom line

 Stuck in the trading range as it attempted ot break the diamond, with no follow through. The break of this range continues to be the most important thing to watch. Still could go either way. 

SPX 


 

 
QQQ – Bullish range breakout attempt seems to be holding up after some initial selling pressure. Holding the vwap from the gap up. As long as this little triangle holds and does not break lower, the trend remains higher with an upside target of 152. 

IWM – Looking to set a higher low here at the vwap from the 5/18 low. This continues to be a choppy uptrend, but better to look to buy down here against the 138 low than to chase it up near the trendline. 

XLF – This is a good example of why I have incorporated vwap into the strategy so much. While I still look for the patterns, it has added very safe entry points. After last weeks inverted hammer, XLF gapped up, (similar to what XRT did on the daily Friday, which is a trade I pointed out to prepare for in Thursday’s report). It is now breakout out of two bullish pattens with targets of 26.28 and 27.70.   

XRT – Did what we wanted and prepared for in Thrusday’s report. A gap up above the ope on the inverted hammer. Holding long against my entry point of 40.84 

Under the surface you can look at it like this. 

XME – If it is ever going to acquire it’s 38 target from the weekly chart, this is the place to start finding buyers. Here we have a retest and clean hold of the 200DMA and the vwap from the Feb High and June Low. Failure here and it may make a better short than a long, but this is a very low risk level. You can go long against Friday’s low, that is how I am playing it.

Immediate term XME chart

COPX – Copper Miners

GDX – Below the VWAP from all 3 recent swing points. Until that area becomes support instead of resistance, I lean bearish from a risk reward perspective. 23.75 would have to become support for me to think long. Looks like an excellent low risk short to me.

NGE – Inverse H&S in motion, target 24.31

IBB – Many are looking for a deeper pullback in IBB. I continue to see lots of support right here at 315 and then into 310.60. These are the areas of interest to me. Additionally, lots of technical aligned to take it to fill 338 gap first. That area will be a better place for a correction back to 300. Immediate term (30 min) still in downtrend so looking for that be broken around here or 310.60.

Setups to Watch 

ONCE – Weekly inverse H&S targeting 110.78. Immediate term pennant. Look for a move above the vwap from the gap up or buyer into the VWAP from the prior swing high, currently at 76. Notice how price is being contained between the two. Buyer into or just below support or on break above. Not in the middle of the range. 

RICE – Weekly chart cup/handle. Immediate term Inside Day above the vwap from the July low. Lean long into and above Friday’s low. Below Friday’s low, it needs more time but remains bullish on the weekly.  

NFLX – Technically targets have been acquired on the weekly. However, this close to 200, you know the stock wants it. Currently being resisted by vwap from the gap up and being supported by vwap from prior swing low as it creates what looks like a bull flag. Look for a trade on a pullback into 175, or an inverse H&S to form just below the vwap from the gap up around 183. 

The Bottom Line:  
I have a busy weekend ahead, but got up at really early to put this report together. At this point based on the current price action, it is still hard to build anything but a bullish thesis so I remain in that posture.

When would I feel a bit more cautious?
When the SPY breaks both the VWAP from the July breakout (Thursday’s low) which has clearly held as support throughout this consolidation. Additionally a strong break below the range (7/27 low). While the measured move would only be 1% lower, it would change the current market dynamic in that sideways consolidation broke lower, rather than higher. This is something we have not seen since the election. While the price action continues to point higher, those are the levels we really need to watch. As long as we hold those areas, it’s very hard for me to not remain extremely bullish at least into that 2500 target area. There is no doubt one day things will change, but let them. As bad as financials felt last weekend, they gapped up and ran last week, because for now, the buy the dip mentality is still in place and working. I outlined several ideas this week that I am watching. As always, send me your questions comments or ideas. 

All of the charts and commentary below are provided as information only and do not constitute a trade recommendation nor investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise

 

 

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