Not sure what to call that pattern!
Thursday, August 11, 2011
It has to be a new candlestick pattern...
Strange pattern in the S&P Futures over the last 4 days!
Not sure what to call that pattern!
Not sure what to call that pattern!
Tuesday, August 9, 2011
S&P Futures - These are big candles
Pretty amazing pattern in the S&P futures - matching black and white candles in consecutive days. And big ones at that! This does not happen in a rational market though!
We also happened to run almost exactly into a Fibonacci retracement yesterday (and crossed another one rather abruptly). There is a 50% retracement over our head at 1188 that served as confluence line back last November. Resistance level was more around 1200 though and it is of course a psychological line!
Click to enlarge
We also happened to run almost exactly into a Fibonacci retracement yesterday (and crossed another one rather abruptly). There is a 50% retracement over our head at 1188 that served as confluence line back last November. Resistance level was more around 1200 though and it is of course a psychological line!
Click to enlarge
Sunday, August 7, 2011
Oil 8/7/2011
Here are some quick charts for oil. First a retracement chart anchored on the lows of last May and the highs and May 2011 (interesting, exactly one year between lows and highs).
I have circled in green the congestion points around Fibonacci lines. On Friday we bounced off the 61.8% line (traditionally the best retracement target) at around $85. That line (not a retracement line then) had acted as support back in February!
Looking at the standard set of indicators (Stochastics (15.3), MACD (12,26), RSI (15) and OBV), we can see some positive signs as both the Stochastics and RSI made turns on Friday's price action.
As an aside, I circled in green where OBV punched through the support line on August 1 (pretty decisively actually) which was a giveaway that we should have expected a bad correction! The other indicators were pointing down already, but the volume action was very telling and confirmation!
Click to enlarge
I have circled in green the congestion points around Fibonacci lines. On Friday we bounced off the 61.8% line (traditionally the best retracement target) at around $85. That line (not a retracement line then) had acted as support back in February!
Looking at the standard set of indicators (Stochastics (15.3), MACD (12,26), RSI (15) and OBV), we can see some positive signs as both the Stochastics and RSI made turns on Friday's price action.
Click to enlarge
As an aside, I circled in green where OBV punched through the support line on August 1 (pretty decisively actually) which was a giveaway that we should have expected a bad correction! The other indicators were pointing down already, but the volume action was very telling and confirmation!
SPY - August 7, 2011
Here are some quick charts for SPY on this Sunday before what could be a very interesting Monday!
The first chart show the Fibonacci lines anchored on the lows of 2010 and highs of this year. We can see that on Friday we bounced off the 50% retracement line after a very shaky day. A correction to the 61.8% line (around 115) would actually make sense historically.
On the technical side, we have some positive signs and some scary negative ones. Below are charts for Stochastics (15,3), MACD (12,26), RSI (15) and OBV.
Stochastics are showing a bounce after Friday's action which reflects the fact that we finished way off the lows of the day. But the other indicators are not so optimistic. Clearly, MACD is usually lagging. But look how OBV cratered on Friday! We are at lows going back to July 2009 except that OBV was on the way up then, not down!
At the same time, we are clearly way oversold and indicators such as RSI are at level not seen since last July and we did bounce from there. But I could not predict a bottom here. This is looking very much like last May and June when we had a couple of big down days (4 days with over 3% losses including 2 over 4%) and then some rallies, but it took 4 attempts to make a bottom and we lost more than 15%... A similar loss would put us around 117.
[Update] - One more chart to illustrate where we are now:
The dotted parallel lines are a standard regression channel with a width of 1 Standard Error on each side. This covers 200 days. The red, blue and green lines are associated with a n-th order Polynomial fit (in this case 3rd order) with channels at 1 and 2 Standard Errors on each side. In both cases, we are way outside the channels which does not happen that often.
The first chart show the Fibonacci lines anchored on the lows of 2010 and highs of this year. We can see that on Friday we bounced off the 50% retracement line after a very shaky day. A correction to the 61.8% line (around 115) would actually make sense historically.
Click to enlarge
On the technical side, we have some positive signs and some scary negative ones. Below are charts for Stochastics (15,3), MACD (12,26), RSI (15) and OBV.
Click to enlarge
Stochastics are showing a bounce after Friday's action which reflects the fact that we finished way off the lows of the day. But the other indicators are not so optimistic. Clearly, MACD is usually lagging. But look how OBV cratered on Friday! We are at lows going back to July 2009 except that OBV was on the way up then, not down!
At the same time, we are clearly way oversold and indicators such as RSI are at level not seen since last July and we did bounce from there. But I could not predict a bottom here. This is looking very much like last May and June when we had a couple of big down days (4 days with over 3% losses including 2 over 4%) and then some rallies, but it took 4 attempts to make a bottom and we lost more than 15%... A similar loss would put us around 117.
[Update] - One more chart to illustrate where we are now:
Click to enlarge
The dotted parallel lines are a standard regression channel with a width of 1 Standard Error on each side. This covers 200 days. The red, blue and green lines are associated with a n-th order Polynomial fit (in this case 3rd order) with channels at 1 and 2 Standard Errors on each side. In both cases, we are way outside the channels which does not happen that often.
BAC in a freefall
I have read multiple articles related the current Bank of America troubles and looking at the chart, we see a scary looking future! Here are the links to the articles I refer to:
Bank of America Death Watch
Is Bank of America at Risk of a Death Spiral
Here is the latest chart of BAC with a Fibonacci retracement coming from the lows of 2009 to the highs of 2010. I have circled in red where the lines acted as resistance and support. Last week, we punched decisively through the 61.8% retracement. This could act as resistance ($9.28) should we experience a rally while the next line of support is at $6.31.
The stock is in technical hell, oversold in just about all the indicators, but amazingly enough, even with last week's huge move, it has not bottomed out in some indicators yet. This could indicate more pain to come!
I would certainly stay away from that stock while the legal and financial dust clear up!
Bank of America Death Watch
Is Bank of America at Risk of a Death Spiral
Here is the latest chart of BAC with a Fibonacci retracement coming from the lows of 2009 to the highs of 2010. I have circled in red where the lines acted as resistance and support. Last week, we punched decisively through the 61.8% retracement. This could act as resistance ($9.28) should we experience a rally while the next line of support is at $6.31.
The stock is in technical hell, oversold in just about all the indicators, but amazingly enough, even with last week's huge move, it has not bottomed out in some indicators yet. This could indicate more pain to come!
Click for a larger image
I would certainly stay away from that stock while the legal and financial dust clear up!
Thursday, August 4, 2011
Yes, we are oversold
Here is a daily chart of SPY with from top to bottom William %R, TRIX and RSI. I have circled in green the last lows for TRIX and RSI and these go back to last July! These indicators are not standard, they are adaptive and smoothed but the actual ones will show something similar!
So yes, we are currently oversold and the last time it was that bad, we bounced back 6% in 5 days. So there is hope! On the other hand, macro conditions are not exactly conducive to a big bounce!
So yes, we are currently oversold and the last time it was that bad, we bounced back 6% in 5 days. So there is hope! On the other hand, macro conditions are not exactly conducive to a big bounce!
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