Top Advisors Corner

October 2014

Top Advisors Corner

Tim Ord: The Ord Oracle - October 30, 2014

by Tim Ord

Monitoring purposes SPX: Sold 9/30/14 at 1972.29= gain .003%;  Long SPX on 9/25/14 at 1965.99. Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11 Long Term Trend monitor purposes: Flat  The chart above goes back to mid 2007. The bottom window is the Bullish percent index for the NYSE. It has been common for the SPY to have strong declines when the Bullish Percent index turned down less than 65% stocks are on Point and Figure buy signal.  This condition appeared at the September top.   It also has been a bearish condition for the market when the Read More 

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Martha Stokes: Dark Pools Accumulation

by Martha Stokes

High Frequency Traders HFTs are usually easily seen on stock charts with huge gaps, long one day candles, and spiking volume patterns. However their counterpart which is the long term mutual and pension fund institutions, are often harder to see and identify. The stock chart for CA Inc. (NASDAQ:CA) is a good example of why many technical traders are confused as to what to search for when trying to find Dark Pool activity.  This is especially because of the sudden velocity runs these giant funds tend to create, when professional traders and HFTs discover the giants have been buying up Read More 

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Jack Steiman: Hesitation Ahead of The Fed

by Jack Steiman

The market has had a nice run-up ahead of the Fed meeting that begins Tuesday and has the economy on the agenda on Wednesday. With QE3 ending next month, market bulls want to be able to count on a QE4 to support the economy should things fall apart globally or in our own back yard.  If Ms. Yellen gives any hint that she won't keep rates low for basically years to come, the market will likely get taken apart. The only reason we hold up is because of Fed action and/or perceived action if need be. Given that she understands this fully and recognizes the market damage to come if she Read More 

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FinGraphs: Our Intermarket Perspectives

by Jean-Francois Owczarczak

Greetings from Geneva Switzerland! “Buy the dips”, they say, and watch the market take off like a hot air balloon.   SPY is back above its second week of October breaking points, AAPL is making new all time highs and last months record levels on US Blue Chip Indexes have never felt so close.  On other international markets, the snapback does give some breathing space.  This year’s Bull market tops (for some indexes, all time highs), however, are still quite a ways away.  Many of them are still well within the scope of a Daily secondary correction down (please note Read More 

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Martha Stokes: Technical Support vs Fundamental Support

by Martha Stokes

How To Determine Where Price Will Find Support During A Downtrend Technical Traders often forget that there are two different perspectives on support and resistance. There are Fundamentalists who do not use stock chart analysis, and the Technical traders who rely solely on technical pattern analysis for their decision when trading stocks. Support created by the Fundamentalists, behaves differently than support created by Technical traders. It is important to be able to discern which type of support it is on the stock chart, or if both groups were involved in the sideways action Read More 

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Gene Inger: The Inger Letter - October 24, 2014

by Gene Inger

Slice & dice volatility - dominates this week's activity. Not to be overlooked at all: this approaches the fiscal year-end of many funds; so they tried their best, may yet-again, to deliver the best results they can to close-out their year. That contributes to both protective rallies OR declines (as we outlined). When we stepped-aside our hugely profitable short-sales early last week (as the Dow washed-out by over 400 points intraday, and our overall short-sale in the S&P was ahead by more than 100 handles, which is truly huge) we didn't 'turn bullish'; but simply called for a Read More 

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Tom McClellan: Deflation Is Getting Too Popular

by Tom McClellan

 I cannot believe the volume of the news stories I am seeing in the financial media, with people worrying about impending deflation.  And as any card-carrying contrarian knows, when a topic gets too popular, you are near a turning point.   To check that observation, I went to Google Trends and did a quick search on the term “deflation”.  What Google does is to then come back with a chart showing interest in that term over time among the news media.  And sure enough, October 2014 is showing the highest reading since late 2010, and the month is not even over yet Read More 

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Tim Ord: The Ord Oracle - October 23, 2014

by Tim Ord

Monitoring purposes SPX: Sold 9/30/14 at 1972.29= gain .003%;  Long SPX on 9/25/14 at 1965.99. Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11 Long Term Trend monitor purposes: Flat  The top window is the SPY and the window below that is the TICK/TRIN ratio.  When this ratio stalls out near +100 than in generals everything is OK internally in the market and the market is expected to move higher if not break to new highs.  When the TICK/TRIN ratio moves to -100 or lower (recent low hit near -230) than market moved sideways (more or less). This ratio Read More 

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David England: Time for a correction-Audit

by David England

On October 12th I wrote, “To signal an upcoming correction, turn off the hype from the national media and watch two simple items:  my blue signal line and longer-term trend line.  Remember the saying “The trend is your friend?”  It works in this situation also.  When or if the price breaks down through my blue signal line and the black-slotted red line and fails to rally back above them, this represents more selling than buying and can signal lower prices ahead.” Today, we will analyze the updated weekly S&P 500 chart to see if my system signaled lower Read More 

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Watching AAPL, Keeping an Open Mind

by Jack Steiman

I'd anticipated a snapback off the 10% down-move on the S&P 500, with a retrace to around the gap at 1928, or thereabouts. Thus far, the market is playing out as expected. Of course, we could go somewhat higher or lower than my target. It's just that you have the confluence of gap, moving average, and a 50% retrace, all coming together at that approximate level.  When a market wants to do something, it's very hard to deny it. For instance, there was absolutely terrible news from market and economic leader International Business Machines Corporation (IBM).  They actually Read More 

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Gene Inger: The Inger Letter - October 21, 2014

by Gene Inger

The death of the Bear - now proclaimed by so many money managers might be premature (that's the subject of this weekend's report, after a fabulous two weeks during which we basically harvested downside S&P gains in-excess of 100 handles, if not more; and with that under-belt; we're excited about the next phase outlined to our regular daily readers; you're invited to join).   Take note: some technicians who finally acknowledge the pattern's historical significance, by moving as I forecast below a rising-trend-line 'containment zone', previously restraining S&P declines for Read More 

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FinGraphs: Seeing the Markets in Three Dimensions

by Jean-Francois Owczarczak

Hello everyone!  Talk about the deepest equity market correction since Spring 2012 and it raises three questions:  is it the beginning of the end of the 2009-2014 Bull market?, where will this yet secondary correction find support? what can be expected from the current bounce?  Three different perspectives for three different investment or trading horizons.  Yet, all of them interplay. Considering all three, puts the market into perspective. Hence, at Fingraphs.com, we present all charts over 3 time horizons “Markets in 3D”, thereby providing an at Read More 

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Martha Stokes: How To Differentiate Fundamental Support From Technical Support

by Martha Stokes

Reading A Chart’s Support And Resistance Levels Requires More Analysis Than Price Patterns This week’s stock discussion is regarding Avis Budget Group, Inc. (NASDAQ:CAR) a mid-cap stock, with how support levels vary according to which market participant group dominated during the sideways action. Support is usually a sideways pattern, but occasionally support can also be found using a moving average IF the stock is in a Peaks and Valleys Trendline pattern. However the new order systems used by 80% of the market which is the professional side, have altered how price patterns develop which Read More 

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Tom McClellan: Summation Index Rate Of Change

by Tom McClellan

 When the McClellan A-D Summation Index makes a big move in a short amount of time, that action contains important information.  This week, I’ll show a pair of charts that help to make this point.  The Summation Index changes each day by the value of the McClellan Oscillator.  My mother Marian McClellan was a math major in the 1950s, when it was a lot less fashionable for women to undertake that avenue of study than it thankfully is today.  Back in the 1950s, they did not typically teach integral calculus in high school where most of us learned it, but she Read More 

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David England: Buy Recommendation II

by David England

It is time for another "best of breed" books that make great gifts for investors and traders. My heart is in financial education, with the goal "to teach my students how to make better-educated financial decisions.   It is rare to find a book focusing on options that is not condescending or over technical. Years ago, I ran across an author with this ability – Mr. Michael Sincere and his book Understanding Options 2E.  Sincere is a full-time columnist for MarketWatch and author of numerous books, including Understanding Stocks, All About Market Indicators, Predict the Next Bull Read More 

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Tim Ord: The Ord Oracle - October 16, 2014

by Tim Ord

Monitoring purposes SPX; Sold 9/30/14 at 1972.29= gain .003%;  Long SPX on 9/25/14 at 1965.99. Monitoring purposes Gold: Gold ETF GLD long at 173.59 on 9/21/11. Long Term Trend monitor purposes: Flat Today volume on the SPY jumped over 30% from the previous days and suggesting a “Selling Climax” was triggered today. On the chart above we have labeled previous days where volume jumped over 30% and in each case the market was near a low.  Most “Selling Climax” lows are tested and would expect today’s low to be tested before a worthwhile rallies starts.  Also notice that Read More 

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Jack Steiman: Splat ... but Well Off the Lows

by Jack Steiman

The market was primed to go higher today as Intel Corporation (INTC) and CSX Corp. (CSX), two key market leaders, were rocking after hours last night after reporting earnings. Futures were exploding higher due both to those reports and to the fact that the daily and 60-minute, short-term charts were oversold. A nice combination for the bulls to get some momentum.  Then, overnight, we got the news from overseas on their economies, plus further bad news on the Ebloa virus, which caused the futures to reverse hard, allowing for a massive gap down across the board of 1% or a bit more Read More 

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Martha Stokes: How to Use Volume Volatility to Determine Breakouts

by Martha Stokes

Chaikins Money Flow as a Volume Volatility Indicator Chaikins Money Flow CMF is commonly used as a momentum indicator, however it is also an excellent volatility indicator that enables technical traders to evaluate volatility or lack thereof during Trading Range conditions which is the hardest of all price action to trade. Trading Range price action is becoming far more common than it used to be. This is due to the changes of market structure, with institutional large lot transactions and smaller funds using Volume Weighted Average Price VWAP. Trading Ranges are wide sideways price Read More 

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Gene Inger: The Inger Letter - October 13, 2014

by Gene Inger

A 'tipping point' arrived - in the week just past. Any number of issues we've outlined for some time, contributed to the return; first of allowance for dips; to a realization of 'minor' corrections; to early stages of outright portfolio fear, as investors and especially leveraged money managers, reluctantly find fewer, if any, rationales to convey optimism; thus get compelled to become defensive. (Domestic & global analysis follow.) It is no wonder Treasury Secretary Lew Friday afternoon said 'nations must refrain from competitive devaluations', and that Read More 

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Tom McClellan: COT Data Show A Bottom For Copper

by Tom McClellan

 Last week I pointed out how the Commitment of Traders (COT) Report data for currencies were pointing to a big topping condition for the dollar.  That top appears to have arrived, and if the dollar heads downward then that should provide a boost to prices for all sorts of commodities.  A similar message comes from the COT data on copper futures, where we find that the commercial (big, smart money) traders are net long in a huge way.  That means as a group they are positioned for a big rally in copper prices.  They are often early in adopting a big skewed Read More 

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Tim Ord: The Ord Oracle - October 10, 2014

by Tim Ord

Monitoring purposes SPX; Sold 9/30/14 at 1972.29= gain .003%;  Long SPX on 9/25/14 at 1965.99. Monitoring purposes Gold: Gold ETF GLD long at 173.59 on 9/21/11. Long Term Trend monitor purposes: Flat We are Still expecting a bottom to form this week to early next week.  Today’s SPX 40 point decline produce a TRIN close of only 1.53 and in our view not high enough compared to the degree of the decline and suggests market work needs to be done.  Today’s decline also  pushed volume to the highest reading compared to the days previous and most high volume days are at Read More 

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David England: Time for a correction?

by David England

Today I answer: “Using your technical analysis tools, what will you be watching to see if we are headed for a correction?”  Before I answer, keep in mind a correction is a 10 percent pullback from a previous high. If 2,019 is a market top, then a 10 percent correction would take the S&P 500 to the 1,817 level. Many fear corrections; I welcome them--they can lead to many profitable trading and investing opportunities.   Per my chart, I feature a weekly chart of the S&P 500 using Japanese candlesticks. Since the beginning of 2013, the S&P 500 has successfully bounced Read More 

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Jack Steiman: No Selling Thrust ... Yet!

by Jack Steiman

So the bears had the bulls dead in the water a few days back. The long-term, up-trend line at 1950 had been taken out with some force, down to 1926 intraday on Thursday. This was it. This was their time. Bulls finally knocked out cold. Well, nice thought anyway! The index closed at 1946 that day followed by another close at 1946 on Friday.  Right after that double 1946 closing bottom the market blasted back through 1950, and so here we are again. No where.  The bears, to say the least, are fighting harder. The indexes are back testing, and for now, at least, failing at the 20- Read More 

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Tom McClellan: Commercials Betting On Big Dollar Downturn

by Tom McClellan

 The U.S. Dollar Index has recently been in one of the biggest blowoff moves we have seen in years.  The lesson of the past blowoffs is that the downward slope out of the eventual top tends to symmetrically match the slope of the advance up into it.  This week’s chart shows us that the commercial traders of various currency futures contracts are already making a huge bet on a dollar decline.  The indicator in the chart is one that I created several years ago by combining the commercial traders’ net position in multiple currency futures contracts into a single Read More 

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W.H.C. Bassetti: October 4, 2014

by W.H.C. Bassetti

Gold and silver are in extended downtrends.  Worse for gold it has just broken to new lows on a gap down.  Being long is an invitation to a diagnosis of masochism.  Buying these issues before they form bottoms and show strength is a good way to dispose of capital. We have been short silver for quite some time and the chart encourages us to add on to our position:   The PnF chart has a startling target for silver.  We don't know whether we believe it or not, but if realized it would be a spectacular trade. Read More 

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Tim Ord: The Ord Oracle - October 2, 2014

by Tim Ord

Monitoring purposes SPX: Sold 9/30/14 at 1972.29= gain .003%;  Long SPX on 9/25/14 at 1965.99. Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11 Long Term Trend monitor purposes: Flat  Today’s decline in the SPY produced a potential “Selling Climax”.  Most “Selling Climaxes” are tested and if tested on lighter volume can create a bullish sign. Today’s decline retraced 61.8% of the previous advance and tested the gap level of 8/15 near 195 on the SPY and a support area.  The TRIN closed at 1.75 which is on the bullish side but still below 2.00.  We Read More 

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Martha Stokes: Volume Exhaustion Patterns in Stock Charts

by Martha Stokes

Microsoft (NASDAQ: MSFT) Stock Chart Shows Why Watching Volume Pays   Volume has become one of the most important indicators, as Dark Pools took liquidity off the exchanges and market-maker limit books while High Frequency Trading seized control of the void the giant lots left behind. Although most retail traders who started learning to trade back in the mid ‘90s were told that volume was not important and that price indicators where what they needed to learn to use, nowadays the trader who doesn’t use volume is learning the hard way why it is so important. Read More 

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David England: Should I GoPro?

by David England

Today I answer: “Using your technical analysis tools, were there buy signals for the recent run with GoPro?” Let’s review one of my trading systems before looking specifically at GoPro.This system is highly effective at giving profitable trading buy and sell signals. Remember, nothing is 100 percent.  Per the chart, my trading buy signals hit when three conditions occur. First, the price must cross up through the blue signal line and green trend line. Finally, the bars in the middle (momentum indicator) chart must cross from negative (red) to positive (green). In reverse, “Where Read More