Wednesday, June 10, 2015

Pfizer Breakout Watch

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Above is Pfizer 2-hr chart, if break out is confirmed. Measured Move Target: $35.67

Tuesday, June 09, 2015

BOUNCE Target: 210

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Evidences of a bounce are shown in charts above, with first bounce potential target: 210s.

Saturday, June 06, 2015

Up Day Monday

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Right click to open image in new tab, left click to enlarge 

This chart above I use to spot short term divergences after a run up/down. For better visualization, I highlight focused area with pink rectangle, which is the current down leg. Now look at the lower panel indicators which are market internals. clusters of red areas reveal selling strength. The lower the red peaks the stronger the selling pressure. Currently, price has been making lower lows, however internals clearly has been reverting course, from extreme low to positive or close to being positive. This kind of divergence is called positive divergence, which usually leads to a bounce, at least a day or two. In addition, on price panel, the blue positive trend line connecting previous lows and price action toward lower BB, (price tags below and closes above lower band), suggest a likelihood of a bounce is high.
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Hourly Chart #1:
Finally price achieves measure move as mentioned in previous post which negates my view of it as being WEAK, (for now) . However it still has taken too much time to achieve target, and the current selling seems exhausted and slowed down on Friday close based on indicators from the daily chart above. 

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Hourly Chart #2:

So my expectation is a bounce first, at least one or two up days. How big of up days will help me to assess better of the current down leg. If the up move is huge then a retest of the all-time high is likely the case, and at least a lower high on daily shall be expected. If the next up day(s) is small range bar(s), then current down leg may have leg(s) and the expecting bounce might be a retracement of the down leg to burn off short term selling exhaustion.

VIX Negative Divergence: Negative divergence in $VIX likely  results in short term weakness in VIX which means at least a bounce in equities.

Without further ado, an UP day Monday is my call. If down at open, I am planning to add more weeklies calls and likely sell to close before the close. As for other long positions, I will decide after close on Monday.

Thursday, June 04, 2015

Is Pullback Done?

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From the hourly chart above, there has been 5 down legs since the first strong leg down (RED BOX) from high to low,  none has achieved a 100% measured move. Had price achieved 100% measured move from last leg down, target would be 209.09. Today low is 209.75.  Also these down legs are overlapping. To me these are signs of weakness and tiresome in the pullback

Next is price displacement from high to low, it has taken price almost twice the amount of time, Refer to three pink boxes for length of time. Usually for a strong impulsive leg down it shouldn't take that long. Just my observation that this run has taken little too long

Also based on my observation, the pull back seems complete or near end at least on the hourly time frame, because typically the initial and last leg down are the longest legs, and mark the start and end of the run, which may be the case here.

Above are my observations of short term price action. No guarantees that my call is 100% accurate. In case I'm wrong, price should continue down and exceeds the 100% measured move. Then I'll  switch my bias stance to be with the bears. Otherwise, a technical bounce is what I'm expecting soon.

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From the daily chart above, I see a potential bearish pattern in case price breaches the Trend Line where I label 3-push pattern.  But for now I don't want to project such a far outlook without price confirmation.  Even if price is there now, it is very likely to bounce. The reason I'm presenting that pattern here is to let us be aware of its potential in case it is the chosen pattern by the market.

The daily chart above also suggests a high likelihood of a bounce, at least one or two days, based on low extreme readings and 50SMA also a good spot for price to bounce from past price actions. If the bounce is what price wants, I expect at least lower high on daily or a retest of previous high if bounce is strong enough.

Lastly, be mindful that more often than not price does not go straight up or down. There are always hints or clues from charts to let you know before trend change is confirmed.  Because of these reasons, I will not rush or panic to sell my long positions if further weakness continues. I will maintain my long positions until nearest bounce to unload them before trend changes to avoid suffering unnecessary loss.

Wednesday, June 03, 2015

Tiring Bears

Daily charts of US major averages are starting to look better. Small Cap decisively breaks out w/ solid follow through candle. Nasdaq retests previous high. NYSE Composite, Dow Jones, and S&P 500 each penetrates the downward trend line during early today action, however, a follow through day is needed for confirmation.  Overall market shows signs of improvement at least based on price action alone.
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Above is the hourly OHLC bar chart which I'm using to explain as why I think that bears seem tired. As you can see after a strong first leg down (red rectangle box), price consolidates up then pushes down with four overlapping small legs, but it still can't achieve 100% measured move at the end of the fourth leg. Instead price reverses course and makes a short term higher high today. 
Based on observations from the hourly chart, I believe bears may be tired and may be not so much left on the down side, because price has spent too much time and too much overlapping with little to show for. On the other hand, bulls breaks the declining trend line, makes higher high, then bounces off 50% fib, which shows that this bull might have more leg(s) and a retest of today high is quite possible. 

By the way the analysis here is solely based on price action using hourly price bar chart, without any visual aids like moving averages, price channels, Bollinger bands, or other technical indicators known to man, or proprietary programs, or other correlations like put-call data, breadth, and market internals, and etc. Just price alone sometime is good enough and is always the PRIMARY indicator I use to decide buy and sell.