Ace Stock Trader- Sector SPDR ETF and IBD 50 Charts! Plus market picture charts! Updated 12/3/13<
$SPX - Default Style
I thank you for your votes and support. On this board, WE are here to make profits in the stock market--pure and simple! By the way, I am an Associate Member of the Market Technicians Association (MTA). -Mike
-01a-Dow Jones Industrial Average ($INDU)-A look at the Devil's Cross
The 3 most recent Devil's Crosses (20-100 down-cross) led to significant sell-offs....in fact, each of the previous 3 Devil's led the Dow down to the 400 moving average line. The 400 MA line is the long-term bull/bear line, and usually not well known by amateur technicians. You can see how each Devil led to the 400...and how each tag of the 400 zone led to a bounce-back for the Dow. In some cases over the years, the 400 MA line failed to hold support...examples include the 1987 and 2008 crashes. The 20-100 was the final warning to get out before those two crashes occurred.
-01c- iShares Barclays 20+ Year Treasury Bond Fund (TLT)
The TLT bond fund broke decisively through the neckline of a prominent Head-n-Shoulders on September 14th in the wake of the Federal Reserve's decision to begin QE3. However, powerful forces, including the Federal Reserve itself, have managed to support the right shoulder and create a TRIPLE RIGHT SHOULDER as we entered year 2013. Nonetheless, the general H&S pattern remains intact with no change in the general pattern. Major moving average down-crosses have reversed by April 2013 suggesting that the long bonds will be a good bet going forward. If so, then the US stock market could be in trouble. It's no surprise as the Fed is struggling to keep rates low at least until Year 2016 so that they don't have to sell off long bonds at market rates. (See my blog on 'the Twist' by googling 'Ace Talking Stocks' and click on the blog link.) So, will the Fed managed to keep bonds at low interest rates for a long time (as in Japan)? Keep in mind that conservative investors have been cubby-holed up in US treasuries for a long, long time...the low yields of the long bonds are risky in themselves as the risk of financial loss is great should these bonds sell-off in earnest. However, the average retail investor has no real concept of this risk. The next big test for long bonds comes in late May or early June when the Congress must approve the raising of the debt ceiling limit to new unfathomable heights--any mis-step at that time could cause an immediate bond bust which could also flatten stocks. (Updated April 13, 2013)
-02- US Dollar Index - Cash Settle (EOD) ($USD)
US dollar fails to survive its 2 year uptrend line! It also fails to hold an intermediate Head and Shoulders pattern in early October 2013. This could put markets on edge. For more insights, visit my blog and our trader's forum at www.blog.acestocktrader.com ...or simply google these 3 words: ace talking stocks.
-02b- Nasdaq 100 Index ($NDX)-Dynamic Buy-Sell INVESTOR Signals
This chart is designed for INVESTORS, not traders. Using the popular Nasdaq 100 Index, there are certain buy-sell signals I watch for in terms of LONGER TERM TRADES or INVESTMENTS. This Index should offer good clues as to when to be long in the market....and when to exit or go short the market.
The 13-50 moving average crossovers are one such signal--this crossover serves as the accleration signal on my Mo-celerator charts, but it is also an important buy signal for INVESTORS who don't want to chase every short term signal.
Also, I watch for the 13 day EMA line on the Chaikin Money Flow (CMF) Indicator with the CMF set at a 34 day lag on INDEX charts. I have found over time that when the 13 ema line on this graph crosses above the zero line, that this serves as confirmation of stronger, longer trend. It works especially well to the long (buy) side, and a negative crossover is often 'a final get out' signal if somehow you have not listened to earlier exit signals, which many investors do not do because they don't want to miss the next surge higher....I understand this as part of my portfolio is invested for the long term too.
Also, the Dynamic chart also shows the Accumulation-Distribution (A-D) line with a 13 day EMA line...the crossovers on the 13-dma serve as an additional tandem confirmation along with CMF as to whether money is flowing into the momentum stocks of the Naz 100....or flowing out. Often, the 13 ema crossover of the A-D line will occur before action shows in the CMF, because CMF captures heavy money moves, while A-D captures the early trend setters whose cash flows are not easily detectable. The CMF then serves as a confirmation of the early trend-setters' A-D signals.
Finally, my charts always include the ADX graph, which is 'the holy grail' graph for me. For investors, the signal to watch is at least a 5-pt move of the black ADX line in the direction of the new trend...once you have a 5-pt move, the trend is considered solid and firm for investors. 7/14/12
-03- NYSE - Short-Term Trading Arms Index (TRIN) ($TRIN)
I also find TRIN very useful for intra-day entry and exit points, but that chart is not shown here. This is a daily view chart.
-04- Treasury - EuroDollar Spread ($TED)-daily
The TED SPREAD ($TED) -- sometimes affectionately called 'the TEDDIE'-- tracks the yield spread between the historically 'safe' 3 month US Treasury Note interest rate and the 3 month LIBOR Rate, which is the European base lending rate for banks around the world. Generally, when the spread is low, stock markets tend to perform well. In 2008, the Teddie rose dramatically which foretold of a significant and damaging credit event which eventually came to pass and led to a generational low in stocks in early 2009.
In mid-2012, we saw here that the TEDDY was falling dramatically, which led to the general call to get bullish in stocks. Since then, we have seen the US stocks (and other global stock markets) rally considerably in that time, even as many investors remained on the sidelines cubby-holed into US treasuries and other debt instruments.
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http://talkingstocks.acestocktrader.com/ ...to see the latest market commentary from TRADERS/ INVESTORS of all skill sets. Learn what's really at stake for the markets...and how to position for gains...and safety!
My stock charts are offered as an example of my current trade ideas and are intended for illustrative purposes only. Investing/ trading in stocks is speculation!
-05- NYSE Summation Index (Ratio Adjusted) (EOD) ($NYSI)
The Summation Index ($NYSI) is an accumulation of McClellan Oscillator readings which helps to smooth out the volatile swings found in the McClellan. The Summation Index is popular with sophisticated traders for spotting significant tops and bottoms in recent trends.
For me, the key graph on the Summation has always been the RSI(14) oscillator...as you can see, the oscillator tends to call tops and bottoms off of significant multi-day trends.
I watch for readings under 30 (oversold) and over 70 (overbought) and the confirmation is usually provided by a break back toward the middle as the RSI line crosses over the 30 or under the 70 mark. Keep in mind that the NYSI can remain overbought (or oversold) for a very long time. This is because major TRENDS can over-ride the cyclicality of the markets, which is what RSI tracks. When trend continues higher (which reflects herd trading), a mistake that some amateur chartists make is to assume a long or short position as soon as the overbought or oversold position is reached on the RSI. The proper time to go long or short is when the RSI begins to climb back toward the middle space (between 30 and 70), at least with the $NYSI chart, imho! That's why I watch for the confirmation signal (again, over 30 or under 70) to confirm the move out of the extremes. Often, the NYSI moves can mark a divergence from the actual movement of price on the New York Stock Exchange (NYSE), thus offering an early warning system.
-06- Gold - Continuous Contract (EOD)/Oil - Light Crude - Continuous Contract (EOD) ($GOLD:$WTIC)
Why compare Gold to the price of Oil? Both are priced in US dollars, and since many people believe the US currency is de-basing, we may not be seeing the REAL influence of gold to oil. By comparing the two directly, we eliminate the Dollar's influence to see what is really happening between these two prized commodities.
Also, gold is a store of value, and has only minor (but growing) usage by industrial markets. On the other hand, oil is a very important usage commodity...the world would basically grind to a halt without oil. When oil is thriving against gold, it can be said that the world economy is advancing.
-06b- Copper Futures - COMEX (EOD)/Gold - Continuous Contract (EOD) ($COPPER:$GOLD)