Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy Government PANICs! Sterling Collapses! - 19th Mar 20
Coronavirus Market Crisis - Nowhere to Hide! - 19th Mar 20
Coronavirus Most Likely GDP Economic Outcome for Q1 and Q2 2020 - 19th Mar 20
How COVID-19 Leads to 2008-Style Bank Crisis - 19th Mar 20
Coronavirus Impact on Global Economic GDP Numbers - 19th Mar 20
Bticoin Crash Big Channel Review - 19th Mar 20
Gold is Doing Its Job…Silver Will Come Back as a Safe-Haven Asset - 19th Mar 20
The Chartology of Coronavirus Deflationary Event - 18th Mar 20
Fed Slashes Rates to Zero and Introduces QE in Response to COVID-19. Will Gold Rally Now? - 18th Mar 20
Coronavirus - Nothing to Fear but Fear Itself - 18th Mar 20
The Stocks Bear Market Is Upon Us... Or Not - 18th Mar 20
US and UK Coronavirus Containment Incompetence Resulting Catastrophic Trend Trajectories - 17th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Stock Market Swing Baby, Swing!

Stock-Markets / Stock Markets 2016 Jan 22, 2016 - 05:13 PM GMT

By: Gary_Tanashian

Stock-Markets

This article assumes one is trading the up and down swings in the stock market.  Swing traders are just one segment of a market population that includes those sitting in cash (and/or risk ‘off’ vehicles like Treasury Bonds), maintaining longer-term short positions, our always bullish friends, the “stocks for the long-term” contingent and of course, the indomitable Gold Bug “community”, focusing as ever on one asset class while a world full of other assets is in motion.

“Let’s go let’s go, he’s no batter, he’s no batter… (pitch comes to the plate) SWING BATTER!!!”


That was the exact line we were coached to use in little league.  Picture it, eight kids out there on every pitch taunting the kid at bat with with a canned line in high pitched, pre-pubescent voices.  Yeh, that was intimidating.

Here in the all grown up world of the stock market we need the same consistency, although the timing of a “Swing” command is much more exacting.  With market volatility what it has been, you’d have to get lucky to call (to the day, let alone hour or minute) the exact bottom or top to any bear or bull swing in the markets.  Indeed, I have been expecting a short-term bottom for a while now, initiating a long position on SPY last week (and adding to it this week), but only adding more long positions (and covering some shorts) over the last two days.

So what is a market swing?  It is a lurch in the bullish or bearish direction within a trend.  It is important to know that the bull bounce (swing) we have been managing is within a bear trend now, so bull positions, assuming a bounce manifests, should be considered temporary.

Below we review the S&P 500 from the perspective of daily and weekly time frames.

I was not buying (actually, I did) the breakdown below critical support and indeed noted “SPX has dropped below the critical support area that you, I and everyone else now sees.  What a perfect time for a whipsaw and bounce.” in an NFTRH update.  A short-term whipsaw is what it appears to have been.

This quote above was not bravado, it was the weight of the probabilities based on other indexes like the DJINET (unbroken and at support, as noted in public posts at Biiwii) and the SOX (hit 562 with our ‘swing low’ support zone at 540 to 560, which is massive long-term support).

Assuming a bounce is in the works, as the probabilities (and now, today’s pre-market) indicate, the minimum expected bounce area is 1915.  It does not seem like much, but for those who positioned during the downside, it could be a decent little trade.  First, SPX has to break the Wedge.  In that case, the downward spike below support would be a scout for future bear activity.  Meanwhile, much will depend on incoming technical, macro and sentiment data.  A bounce to SPX 2000 would be a gift for would-be bears.

Aside from over sold technicals, there was pervasively over-bearish sentiment, approaching the configuration of last summer’s fright fest.  We projected a bounce back then because the market needed a sentiment reset, and boy did it ever get one.  From Sentimentrader:

Sentiment is not a timer, but it is a probabilities enhancer; a condition that must be in place in making a swing limit point (in this case to the bearishness).

Back on the charts…

The weekly chart shows that SPX plunged down below the summer lows (thus creating whipsaw potential to purge out the remaining bullish holdouts) but has bounced from flimsy looking (but critical) support defined as the October 2014 lows.  Here we note more clearly the potential best bounce (swing) objective of 2000, which includes very well defined resistance and a couple of down-turned moving averages that have supported the bull market in the past.

So ladies and gentlemen, there is our best ‘swing’ objective.  I and I assume those NFTRH subscribers who chose to step up to the plate can consider that a ‘sell’ or re-short level of high confidence.  Meanwhile, with the way this market has been bucking we cannot rule out a weaker bounce or continued volatility in the short-term.

The chart directly above shows an index in an intermediate bearish trend.  The best opportunities are likely to be bearish in the first half of 2016.  Proceed accordingly.

A final note on swing trading; I read an adviser the other day who stated that if you are down less than the market in 2016, you are winning.  A swing trader who stays disciplined would seek to debunk that notion and make gains in both directions, while being cognizant of the probabilities at all times.  I am moderately positive for 2016 but now that the market is in motion (i.e. volatile), hope to increase that performance as the year goes on.

Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates (including Key ETF charts) and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com.

By Gary Tanashian

http://biiwii.com

© 2016 Copyright  Gary Tanashian - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Gary Tanashian Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules