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Stocks Edge Lower Ahead of FOMCStocks dipped further into negative territory as we antipated yesterday. The S&P 500 briefly dipped into the vacuum zone we identified between 4632 and 4580, but it was able to recover quickly, and is currently clinging to support at 4632. We are seeing several green triangles on the KRI, suggesting support is forming. We anticipate stocks to range a bit before the FOMC and from there, we will see how the markets interpret the data. Some hawkishness is expected, with persistent inflation putting the Fed in a difficult spot. If they come out more hawkish than expected, we could easy punch through the vacuum zone to 4580 or below. If they are less hawkish than expected, or even dovish, then we could recover highs. It is doubtful that we will make new highs today, but the next target is 4763.
FX:SPX500
by quantguy
2
Bullish perspective on AMZN | My current setup. Today we will speak about AMZN, the bullish view, and my current setup. If I have to define my trading style, I will describe it as a swing breakout trader. A basic explanation on the way I trade would be described like this "Impulses tend to come from consolidations, so if I'm able to identify formed consolidations on an advance stage, I can start thinking in setups around the breakout on those early signs that a new impulse may be starting. Like any trading strategy, sometimes I'm right, others I'm wrong (i would describe this as 50% of the time), and the standard deviation on the wrong side can be around seven consecutive stop losses. And the last detail you need to understand in this style is the average risk to reward ratio (2) With all that said, let's take a look at AMZN: The price has been moving sideways for 469 days, On a compressive triangle pattern. We have observed 2 breakouts attempts without observing the real impulse yet. Based on previous situations where we can see the price moving similarly, the sequence I have observed is breakout followed by a correction followed by the new impulse coming. Currently, we are observing clear similarities with the previous correction in terms of formation size and time. That's why based on statistics; I'm beating on the repetition of this situation; in the next picture, you can see my current setup that was executed on the breakout of the retest (big structure) I'm currently risking 3% of my trading capital on the stop-loss. The idea is clear IF the price goes below 3160, I'm out of the trade; if that doesn't happen, I will keep holding my setup until I see the price on 4822 / Final risk to reward ratio: 3 Thanks for reading! Feel free to share your review in the comments.
NASDAQ:AMZNLong
by ThinkingAntsOk
1
Stocks Slide from HighsStocks took a sharp dive from highs as we predicted yesterday. We anticipated this because the S&P 500 was maintaining an extremely narrow range at highs, from which we would have required significant momentum to break out. We simply didn't see that, and the risk sentiment turned south later in the day, hence the selloff. We first saw support from 4668, then 4649 (where we are currently seeing support), both levels we have identified here for you. The last level in this cluster is 4632, then we have a vacuum zone to 4580. The Kovach OBV has taken a notable dip, but does appear to be starting to level off. It is likely that we will not see much action today, in anticipation of the FOMC statement tomorrow, so anticipate support and ranging in this cluster of levels identified. But if the selloff continues today, watch that vacuum zone to 4580.
FX:SPX500
by quantguy
1
Can Stocks Rally Again??Stocks have edged up to highs, hitting our exact level at 4729. The level 4668 provided good support on Friday's small retracement. The Kovach OBV is drifting higher, but this indicator seems weak with respect to the rally, and so we anticipate some resistance at these highs. If we do retrace then 4693 and 4668 should provide support. If we are able to break out, then 4763 is the next target. This level is a Fibonacci extension level from Fibonacci levels anchored on the upper and lower bounds of last night's move. We are starting to get into the holidays, so we will see if stocks have the strength for one more breakout before traders sign off for Christmas break.
FX:SPX500Long
by quantguy
CRSP on a major weekly level. What's coming next? Today we will take a look at CRISPR Therapeutics. Which are the main technical elements we can see here? a) The price is against a major Support/Resistance level, working since 2018. The price reaction on these zones tends to provide solid insight into future movements. b) Let's assume the price bounces on the current zone; what can we expect? - A movement towards the descending trendline around 100.00. IF that happens, that would be a take-profit level for me. Why? Because we tend to observe corrections once the price reaches a major level. You don't want to be insight a sideways movement for 100 days c) Let's assume that the price breaks the current level and keeps falling. What can we expect? - A movement towards the ascending trendline around 50.00. That would be the next level where I would start thinking again about bullish reversals. d) I'm a position trader. What is the most relevant level right now to develop setups? -If that's your case, I want to see first a breakout of the descending trendline; IF that happens, I want to see a correction of around 50 days. IF that is the case, I will be interested in trading that breakout for the long term. However, at the moment, we are far away from that situation, and I would stay away from this chart for long-term setups. Thanks for reading! Feel free to share your view of this in the comments.
NASDAQ:CRSP
by ThinkingAntsOk
1
Stocks Drift Lower Ahead of CPIStocks have been subtly trending downward after topping off just under highs at 4729. The 4700 handle did not hold very long and we quickly declined back to comfort in the 4600 handle. We are currently seeing support at 4668, and have a long way to go to retrace this rally, should momentum peter out. The Kovach OBV has flattened as we await CPI data. Watch out for CPI data this morning. Higher inflation has been a persistent worry for the past few months, and it does appear to be factored in, but a large deviation from expectation could certainly still move the markets. The Federal Reserve is in a difficult position, potentially being forced to raise interest rates on an already shaky economy to combat inflation. If we see more forward guidance from Powell, this will definitely have an impact on stocks. The S&P 500 does have support from levels below in the 4600 handle, but below those, there is a vacuum zone to 4580.
FX:SPX500
by quantguy
Trade Idea on ROKU | What I want to see before tradingToday we will take a look at ROKU. What can we see from a technical perspective? a) Currently, ROKU is on a Drawdown of 60% from the previous ATH on JUL 2021. And if we take the first top on February 2021, we have been on a drawdown period of 290 days + b) The main bearish structure we have right now is the descending channel. While the price stays inside that structure, I will keep thinking that the price is on a solid bearish trend. However, based on past behavior, I think we may see a breakout soon. c) OK, what do I want to see before trading if the breakout happens? So, the first filter is the breakout, and after that, I want to see a 5 to 10 days structure with the proportion you can see on the chart (yellow ABC flat pattern). d) IF all the previous filters happen, I will open positions on the green horizontal line (new local high), stop loss below the correction, and target the last broken ascending trendline. e) The risk I will be taking on a setup like this is between 2% to 3% of my trading capital. The expected duration of the setup (if everything goes as expected) is between 30 to 60 days. f) It's important to say that if the filter doesn't happen then, you don't trade :D that simple. And if the filter happens and the trade is executed, the odds of being right is around 50%. However, the risk to reward ratio we will be looking for here is around 2.5 Feel free to share your view of the current situation in the comments! Thanks.
NASDAQ:ROKU
by ThinkingAntsOk
1
Stocks Awaiting Key Macro DataStocks seemed to have topped off just below highs. Persistent risks like the impending Evergrande default, Fed tapering, and Omicron seem to be completely shrugged off. However we do appear to be in a sideways correction between 4668 and 4729. We are seeing both green and red triangles on the KRI corresponding to the upper and lower bounds of this range and suggesting a narrow band for the price action for now. Tomorrow is a big data day, as we will have CPI and Michigan Consumer Sentiment. It would make sense for stocks to hold the range in anticipation of this data. But if we do break out, 4729 should provide resistance. If we break down from this range then there is a cluster of levels below ending at 4632. Watch the vacuum zone below that to 4580.
FX:SPX500
by quantguy
Can Stocks Make Highs Again??Stocks have rallied for two straight days, breaking through several levels of resistance. We have spanned almost two handles, from 4500 to 4600, and are facing resistance just below 4700. In particular, we are starting to see the price action round off around resistance at 4693. The Kovach OBV has turned up notably, but appears to be rounding off with the price action. Stocks are looking top heavy with this rally somewhat a surprise in the face of consistent fears such as Omicron, Fed tapering, inflation and the supply chain. If we do retrace, then we have a cluster of levels below in the 4600 handle to provide support. Watch the vacuum zone below 4632 down to 4580. If momentum continues, then 4729 is the next target.
FX:SPX500
by quantguy
Retest after breakout | AMAT Today we will take a look at AMAT. What are the main technical elements can we see here? - First, we have the 200 days main structure that the price broke on November - After the breakout, we observed a retest (typical behavior after a structure of this size are broken) - Now, we are ready to define a level where I will consider that this chart configuration has upside potential towards the 2nd fibo extension or the higher trendline of the channel. - IF the price makes a new ATH, I will consider that confirmation for the bullish view. Invalidation level will be below the retest - IF everything goes as expected, I think we may see a movement with a duration of 100 to 150 days towards the target. What are the odds of this view being right? I would say between 45% to 50%. Are you trading this setup? No, I'm not trading this setup; currently, I'm exposed to the max amount of open positions my system allows me. However, I think this is a solid scenario from a technical perspective; the expected risk to reward ratio is about 2. As I mentioned before, the odds of this movement happening based on this type of formation are between 45% to 50%. (All you need to create an edge on the market) What happens if the price never reaches the activation level and keeps falling? You simply cancel your view. What happens if the prices reach the entry-level and then go straight to my stop loss? You simply absorb a stop. That's why it is essential to manage risk and define a % on each setup you will take; my risk management goes between 1% to 3%. Thanks for reading! Feel free to share your chars and view them in the comments.
NASDAQ:AMAT
by ThinkingAntsOk
1
Stocks Make a Run for Relative HighsStocks got a lift yesterday as investors turn hopeful again after Omicron fears subside. We broke resistance at 4580, and crossed the vacuum zone after that to 4632. Currently, we are testing higher levels, 4652 in particular. This is a relative high, and area with which the S&P has had some trouble in the past. The Kovach OBV has picked up notably, however. If momentum does continue, we should find resistance from 4668, 4693, then there is a vacuum zone to 4729. These cluster of levels should provide resistance and if momentum peters out we could easily retrace back to 4580.
FX:SPX500Long
by quantguy
I will avoid trading below this trendline | ARKKToday, we will look at ARKK, one of my favorite assets to trade. What can we see right now? The price made a new local low last week, which took us to a 42% decline since the previous ATH on February 2021. As you can see, this scenario already happened in the past, and ALL the time, we saw new ATH coming after that. That's why it's important to define what I will be expecting before taking new bullish setups on Cathie Wood's ETF. The main element I want to pay attention to is the current descending trendline. Below that level, I will assume that I'm not in a solid situation to develop setups. Therefore, I want to see a breakout of it FIRST. Most of the time, getting great opportunities is a matter of patience, and the most important thing is that we can't force the market to provide us with an opportunity; we can only wait. And, at the moment, the price is on a clear bearish trend, far from our filter. So, this post is more about "what I will not do" rather than what I'm expecting. So, my conclusion here is: Until I don't see a breakout of that descending trendline, I will not risk my capital, and I will keep waiting. Let's see how much time we should wait for that to happen. Maybe a couple of months. Thanks for reading, and feel free to add your view or charts in the comments.
AMEX:ARKK
by ThinkingAntsOk
1
Stocks hit by New Wave of FearStocks are edging lower in a zig zag pattern as every rally seems to get sold off. We have more risk off sentiment in the markets as Evergrande takes its turn as the center stage of fear stoking news. Evergande shares have tumbled as another debt payment deadline looms. We saw strong resistance from 4580, but rejected this, as confirmed by a red triangle on the KRI. We are roughly in the middle of a range between this as 4504. It could go either way, as we are still quite bearish and could see a relief rally. But we must definitively break 4580 in order to cross the vacuum zone above to 4632, which seems unlikely. From below, we should see support from 4504, then 4487 and 4462 would be the next targets.
FX:SPX500Short
by quantguy
1
Stocks Waiting for NFP DataStocks have attempted a meager rally, as news of the Omicron strain and Fed tightening seems to have been digested by the markets. We do have non farm payrolls data coming in at 8:30 AM EST, which is one of the biggest trading data points, so stocks are likely to hold off in anticipation of the results. This is a particularly meaningful reading, as investors look for a barometer on the faltering economy. We are seeing resistance from 4580, as this is a particulary auspicious level. We have a vacuum zone above this back to 4632. From below, we should see support from several levels below. Lows at 4504 should be considered a min lower bound for now. The Kovach OBV is very bearish, despite a rally attempt by the S&P 500, but we will need to wait for US jobs data this morning before it decides a direction.
FX:SPX500
by quantguy
1
Three Reasons to Be Bearish of StocksThree factors are weighing in on stocks lately. We have the persistent boogeyman of the new Omicron coronavirus strain that is vaccine resistant and has been weighing on global markets all this week. Also, Fed Chair Powell has made some hawkish statements about rates and tapering in response to inflation. Finally, the OECD has voiced a gloomier outlook for the US and Europe on account of persistent inflation. Hence, stocks plunged further breaking support at 4580, but bottoming out at 4564, the level just below. We are seeing a green triangle on the KRI here confirming support, and are currently getting a lift at the time of this writing. We've bounced through the vacuum zone and appear to be running out of steam just under 4632. This level will prove formidable, and we have several levels to break after that before considering highs again. The Kovach OBV is still very bearish, but this could indicate that we are oversold and confirm the relief rally we are seeing right now. If support levels don't hold, 4545 will be the next target from below.
FX:SPX500Short
by quantguy
Inside the current correction on SQToday, we will take a look at Square INC. The main context for the price is the previous corrective structure (white lines). In August, the price apparently made a breakout which then got back into the structure once again, creating a secondary structure (yellow lines) We always work with the idea that the price moves between zones of the same degree, so, in this case, we expect the price to reach the lower zone of the current structure (support level) IF that happens, we want to observe a breakout of the inner trendline (white line inside the yellow structure). IF that happens, we will wait for a small retest, and then we expect a bullish movement towards the higher zone of the current correction (shared area between the primary and secondary corrective patterns.) The filters we are using to validate our view are: a) Contact with the support level b) Breakout of the inner descending trendline c) retest IF all the previous items are true, then: d) Wait for a bullish impulse towards the higher zone of the correction if we observe a clear breakout of the small retest we are looking for. Thanks for reading! Feel free to add your view/chart or any comment about this. ;)
NYSE:SQ
by ThinkingAntsOk
8