Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
BREWING FINANCIAL CRISIS 2.0 Suggests RECESSION 2022 - 28th Jan 22
Financial Stocks Sector ETF XLF $37.50 Continues To Present Opportunities - 28th Jan 22
Stock Market Rushing Headlong - 28th Jan 22
The right way to play Climate Change Investing (not green energy stocks) - 28th Jan 22
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Weekly Update: Trading by Numbers

Stock-Markets / US Stock Markets Nov 11, 2007 - 02:46 PM GMT

By: Dominick

Stock-Markets It was nice to see more of our membership coming in tune with the rhythm of Wall Street this week rather than always being stuck a move behind. The gems in the Nasdaq finally turned into trash this week and, with the help of the financials, had the whole market trading lower. We don't tend to buy high-flyers or sell into holes, but this week really had most Ellioticians scratching their heads.


Now, just as some big names are calling this the end of the bull market, we're willing to go it alone and say this is probably closer to the end of the selling than the beginning, and, if that assessment is correct, we'll be seeing the market turn soon and rally hard, quite likely taking us to new highs.

Don't mistake this outlook as a bias, though –we have levels that need to be reached to get us into the trade and will get us out if wrong. It's just that we've had this decline as one of our possible patterns off the July highs and as we reach the target, there's enough evidence in the charts to keep alive the likelihood of a reversal. And if we do get that rally, don't forget where you heard it first!

But in the meantime, until we have confirmation, we're going to continue trading our numbers as we've done for the past several weeks. The last update outlined several key numbers and how they've been respected by the markets. The chart below, posted Wednesday morning, shows how our numbers, represented by the red lines, continued to unfold in the S&P futures.

As you can see, Monday's rally peaked at 1516, one of our levels, but sold off to end the day at 1506, another target area. Tuesday's strong open brought us to a double top, again at 1516, and 1506 served as crucial support later in the day before rallying again to the 1516 level. Once 1516 was decisively taken out, our next target was 1525, which was met and retested at the close. Our tried and true method for keeping profits, TMAR (take the money and run) resounded in the forums and chatroom at that point as active traders were sitting on nearly 20 points of profit. Seeing gold, oil, and the euro all making new highs, which clearly did not bode well for stocks, helped reinforce this decision to sell at our target number into the close.

And the profit-keeping technique, which was described and emphasized in last week's update, proved its worth yet again as we woke Wednesday morning to a large gap down. The Nasdaq chart below was included in last week's update and was part of our suspicion that there would be opportunity to play the long side this week, with an eye focused to its terminal pattern.

Well, as you probably know, the tech high-flyers like GOOG, RIMM, AAPL, BIDU, all took a beating late in the week and brought the index to its knees, probably truncating the pattern. This was a scenario we'd contemplated a few weeks before when we examined a 1987 analog and studied the divergence between the Nasdaq and S&P during that period. Essentially, we knew they'd have to come together either through selling in tech or a rally in the S&P. The chart below shows how the NDX futures finished the week.

Clearly the Nasdaq had gotten ahead of itself and those who wanted to party like it was 1999 found themselves scrambling to dump the darlings that were simply must-own stocks a few days and weeks before. But so it goes in a fickle market.

Seeing tech stocks taking the brunt of the selling, and being flat from our profit-taking the day before, we were able to adjust our approach to the market and use our numbers to trade to the downside. The gap put us at 1516, no less, and losing this level decisively got us bearish and gave us an ultimate target of 1455, though we monitored the action at other key levels, like 1506, to reevaluate our position. As it worked out, the low for the week was 1454, one point below our target number.

Those waiting to get long had simply to wait on the sidelines for 1455 and ride the 30 point end of day rally that ensued off that low. You better believe we pulled a TMAR after that one!

So, as you can see, our unbiased approach allowed us to trade both sides of the market this week, using our proprietary targets to paint the market for us.

It might be time to watch commodities such as soybeans, which like gold and oil and the euro, have been ramping on the weakening dollar. An old saying has always been “Beans in the teens”, and as we see in the chart below, they are now in the teens from a recent low of 5.00. Do beans find good resistance at this trendline or do they explode to 13? We are about to find out real soon!!

And, we have numerous tools that compliment each other or sometimes take the
lead in times when other methods are fuzzy. Members that solely use these trend charts for swing trades might just be bored from making easy money as they received their stress free signal at the top and are now are waiting for a smaller time frame to hint that this daily chart might flip back up.


Strict Elliott wave would lean towards a new low next week, but as I've already stated, we believe this decline could be ending very soon. As TTC member and contributor Vince Foster wrote in last weeks update for members only, the banking index could be a major tell for the direction of the next move. And, as you can see from this final chart, it's already reacted to a strong support area and could be putting in a short term bottom. If so, make sure you've been nice, because a Santa Claus rally will be coming to town. See you next week!

Don't forget to Join now for only $89 a month!

Have a profitable and safe week trading, and remember:
“Unbiased Elliott Wave works!”

By Dominick
www.tradingthecharts.com

If you've enjoyed this article, signup for Market Updates , our monthly newsletter, and, for more immediate analysis and market reaction, view my work and the charts exchanged between our seasoned traders in TradingtheCharts forum . Continued success has inspired expansion of the “open access to non subscribers” forums, and our Market Advisory members and I have agreed to post our work in these forums periodically. Explore services from Wall Street's best, including Jim Curry, Tim Ords, Glen Neely, Richard Rhodes, Andre Gratian, Bob Carver, Eric Hadik, Chartsedge, Elliott today, Stock Barometer, Harry Boxer, Mike Paulenoff and others. Try them all, subscribe to the ones that suit your style, and accelerate your trading profits! These forums are on the top of the homepage at Trading the Charts. Market analysts are always welcome to contribute to the Forum or newsletter. Email me @ Dominick@tradingthecharts.com if you have any interest.

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual. Check with your licensed financial advisor or broker prior to taking any action.

Dominick 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