Swing trading technical analysis

Level_Trader

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Daily Analysis 12-Nov

US stocks got hammered today on veterans day with the bond market closed.
Lots of negative stories hitting key individual stocks:
-> Apple -5.04% as iPhone suppliers cut forecasts
-> Goldman Sachs -7.46% driven by Malaysia looking for a refund on the investment banking fees it paid out to the bank
-> General Electric -6.88% after CEO warning about the company's high debt levels and potentially being over leveraged.

All in all, a bad day for equities.. technically the charts also look ugly. The S&P500 daily chart shows how the rally stalled around the 8 day moving average. For the S&P500 to go any higher it will need to breach the 8 day.
The Nasdaq daily also paints an ugly picture. It formed an inverse hammer having held the 200 daily moving average. It did briefly fake out last week but this is looking more like a bull trap. The immediate target looks to be 6700 around the trend line...then we will have to re-assess.
Finally, I mentioned in a post on 31st Oct that the USD is breaking out. This is firmly in play as the dollar extended gains today against the EUR and GBP. It looks like it has finally made a move above the 200 daily moving average and 9750 looks to be the next level of resistance. Notice, there may also be an inverse head and shoulders pattern that could play out. If it does, we are potentially looking at around 102-103 on the USD. Plenty of upside remaining if this trend continues.
 

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Level_Trader

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Daily Analysis 14-Nov

Equities continued their slide lower as all three major US. indices finished in the red.
Key stories/drivers:
-> Tighter regulation in banking industry expected as a result of Democrats winning the house hitting financial stocks
-> Broker downgrades on Apple with iPhone forecasts being slashed

The Dow daily chart shows we have reached the bottom trend line in the rising channel again. It has breached and closed below the 200 daily moving average. It's the same for both the Nasdaq and the S&P500.
If you look at the MACD indicator, we're only just about to cross over and head lower so there looks to be more downside coming. First level of support has to be 24500.

In commodities, crude rebounded today although it got crushed yesterday like there was no tomorrow. I've attached the monthly chart and you can see crude oil has been in decline ever since it hit that high in July 2008. It has been in steady decline ever since...note this is the monthly chart so it gives you an idea of how long this trend has been in play for!
It looks like the 77 handle we hit last month is a cyclical top and we'll continue to see further downside from here. The MACD again is only just about to cross over which is alarming. I think we could easily be back around $40 per barrel within the next 6 months. Crude is clearly a sell on any rally and any long positions should be tactical only.
 

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Level_Trader

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Daily Analysis 03-Dec:

Equities globally all gaped up overnight as the US. and China agreed to hold off on new tariffs during talks at the G20 meeting. There will be a 90 day grace period in order for the two countries to work out a deal. Whether this actually happens is still anyone's guess...
From a technical point of view, all major indices were faded but did not complete gap fill from Sunday night. I believe it will only be a matter of time before these gaps are filled. The DAX for example, gaped up only to run into resistance around 11500. It finished the day with an inverse hammer formation and looks set for some selling pressure tomorrow. The Dow, also faded and is likely to fill its gap around 25580. It probably won't stop there and will test the weekly trend line it broke out from last week around 25450.
The Nasdaq also faded and the weekly chart shows it held the 20 weekly moving average around 7100. This will probably hold and most likely gap fill will be targeted by traders at 6960. There's a lot of noise coming from France and it will be interesting to see if that starts to take over the headlines from the trade war truce... if protests and riots continue in France it could well turn sentiment and selling pressure could escalate...keep an eye on that
 

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Daily Analysis 04-Dec:
Well that escalated quickly... The yield curve has come back into focus as the spread between the short end and the long end has narrowed to the point it has spooked the market. The 2 year and the 10 year spread is at its narrowest in over a decade and whose inversion has preceded the past three US. recessions. The trade truce euphoria has quickly faded too with Trump suggesting he will revert to tariffs if the US. and China cannot resolve their trade differences.
From a technical view, I was looking for gap fill as a minimum and we got more! Wherever you look on major European indices there are bear flags in play on the daily charts. Taking the DAX for example, not only did it fill its gap at 11334 but it also held the key resistance level of 11500. The MACD has also just turned lower so further selling is on the cards. The FTSE 100 also filled its gap from Sunday night around 7020. Again like the DAX, there is a clear bear flag in play and a break below 6900 and the flood gates will open. Keep an eye on that key support level. The Dow is below both 20 and 40 daily moving averages and is below the rising trend line once again. It closed below the 200 daily moving average which sits around 25230. Expect further downside in the coming days...
 

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Daily Analysis 06-Dec

Stocks recovered from steep falls in early trading as futures pointed to an ugly open after Huawei CFO was arrested in Canada at the request of the US. casting fresh doubts over the prospect of China and the US. striking a trade deal.
From a technical perspective, the recovery from where S&P500 and Dow were both down over 2% is impressive. It could potentially signal a follow through tomorrow with a bounce likely/overdue. That said, any upside is likely to be capped around the 200 daily moving average on the Dow around 25200/250. The MACD has also nearly crossed over suggesting further downside is on the horizon. I wouldn't be surprised to see a pause day to a slight up day tomorrow simply because of the recovery we've had today in major US indices.
In Europe however, the FTSE 100 broke below the key 6900 level. Any bounce will likely find this level as a key resistance level with 6500 the next target on the downside. Expect volatility to continue...
 

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Daily Analysis 10-Dec:
Volatility is the name of the game. US stocks once again recovered from earlier losses which was triggered by the following:
- Inversion of yield curve continuing to stoke recession fears
- Chaos in France beginning to attract headlines driving risk off sentiment
- Apple being hit after Qualcomm Inc won a preliminary order from a Chinese court banning the import and sale of several iPhone models in China due to patent violations
- May cancelling a parliamentary vote on her Brexit deal with the European Union

However despite all the negative news on Apple Inc, it was the tech heavyweight that helped the sector and the overall market finish higher.

From a technical view, the Nasdaq recovered to close around the key 6700 level. It retested this level a couple of times breaking below on two previous occasions only to rally back above it. It remains to be seen whether this happens for a third time. I believe we could go higher tomorrow potentially to 6750-850 before it gets faded again. This is very much a sell the rally market now. Similarly with the Dow, it first gaped lower overnight before filling its gap. The Dow has potential to go to 24560 and as high as 24700 before it runs into strong resistance.
Aside from stocks, FX made a big move today as cable crashed following May's cancellation on the vote. The US Dollar weekly potentially shows an inverse head and shoulders set up. The 200 weekly moving average remains strong support and if this inverse head and shoulders plays out it sets up a potential target of 102 (some 500 pips higher).
 

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Level_Trader

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Daily Analysis 18-Dec:

Sentiment continues to remain fragile as stocks reverse earlier gains. Energy is the big laggard today as production continues to rise whilst fears of global growth weakening is painting a bleak picture over future demand for crude.

I've included the WTI chart highlighting just how bearish the technical picture is too. Crude has been in decline ever since it broke the 200 daily moving average on 23rd Oct. It's been one way traffic ever since and its broken down further this week as it closed weak last Friday. At a minimum, crude is likely to hit around the 43 handle before it finds some solid support.

In equities, the S&P500 weekly chart shows all moving averages curving and pointing south with the S&P500 testing the February lows today. I believe we continue tracking lower and ultimately get to around 2350-2400. If we do get to 2350 level which is the 200 weekly moving average, I expect this to be a solid buy level as this major support level should hold on first attempt. If that did happen by the end of the week it is likely that seasonality then kicks in next week with lighter than average volume propping this market higher into the new year.
 

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Daily Analysis 28-Jan:

US stocks were lower today driven by weak earnings from Caterpillar and Nvidia. Earnings will be in full focus this week as some of the tech heavyweights report Q4 earnings.

The daily chart on the S&P500 suggests some bullish consolidation despite it being a down day today. We seem to be trading in a tight range with the upper and lower bounds being 2700 and 2620 respectively. Upside looks to be capped around the 200 daily moving average around 2700 (max upside 2750) and on the downside 2600-2620 would open the floodgates. The MACD is turning lower and looks concerning if you're on the long side. On the bull case, the S&P500 did gap down overnight so a beat by one of the blue chips could push the S&P500 higher and potentially enable it to reach gap fill around 2666. Stay nimble and keep an eye on earnings and updates on trade talks between the US. and China which kick off this week. I am expecting a choppy market with tight range trading until it can break out one way or another.

I am also including my weekly newsletter which contains a summary of the market action from the past week along with a technical outlook. It also contains open contract interest and upcoming macro events relating to the economic calendar. If you would like to receive this directly to your inbox on a weekly basis, please drop me a line/message and I can add you to the distribution list.
 

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Level_Trader

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Is the FTSE 100 beginning to hit a wall?

From a technical point of view the weekly chart has managed to hold onto the rising trend line which hit a peak of around 7270. If it does begin to move lower the next big support level is around 7070 followed by 7000.
Optimism of a Brexit deal being reached and the threat of a no deal being talked down is boosting GBP. This is having the opposite effect on the FTSE 100.

The FTSE 100 is made up of large international organisations where a large chunk of revenue is brought in from abroad so a stronger GBP will reduce the value of overseas earnings and therefore weigh on future earnings. The opposite will happen if GBP weakens…
Keep a close eye on GBP as this will help guide us where the FTSE 100 is likely to go.

FTSE 100 Weekly_25.02.19.PNG
 

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