Markets Macro Technicals Sven Henrich

October Charts Part I

October 18,  2015 

Updated monthly charts below:

SPX M RUT M COMPQM DJIA M NYSE M


October 17, 2015

OPEX price jam indeed. We’ll have additional info this weekend, but for now some weekly charts of interest:

SPX F

IBB W DAX W NYSEW INDUW SPX W


October 15, 2015

Well, the bull flag we posted earlier indeed played out:

ES4

OPEX magic: QED.

OPEX m

Good luck tomorrow!


$ES updated: Potential bull flag on the 4 hour.

ES


$IWM this week:

IWM


$ES recovery has been restrained by the .618% Fib since the August, ahem, circuit breaker constrained correction. It is magic OPEX week (see below). Let’s see what “they” can do:

$ES


Central banks are capitulating across the board. Overnight we are seeing the ECB’s Nowotny admitting that QE is failing to reach the 2% inflation target and he is calling for new measures. Australia looks ready to cut rates as well and the US Fed is seemingly admitting the obvious via their mouthpiece Hilsenrath: They can’t raise rates.

That’s just the news overnight and futures are loving it, OPEX is saved. Magic. But really it’s just repeating its standard script.

Most of all rallies in 2015 have been OPEX front runs, usually commencing near the beginning of the month and peaking shortly before or after OPEX. News headlines, earnings, fundamentals, whatever measuring stick you want to use seem mere sideshows in a script that is executed on a very programmed basis. January and August were the notable exception.

But who are you going to believe? Those that tell you we have free markets or your lying eyes?

OPEX


October 14, 2015

Earnings season is off to a rough start. $JPM, $NFLX, $WMT, etc. Problems everywhere. This week’s rejection of price coincides at critical junctures outlining structural potential for much further downside ahead.

$SPY: The recent gap up and ride above the daily 5EMA with decreasing volume looks similar to 2 previous structures. Both resulted in a decline below the original gap:

SPY

All this rejection action is coming in context of larger H&S patterns that have been forming on indices and important stocks (charts from Mella):

$SPX M

$AAPL


$IWM: Follow up to yesterday’s chart: Lower highs:

IWM


Is $WMT, the largest retailer and employer in the world, an irrelevant outlier or a leading indicator? Just curious:

$WMT

$DJIA


$HYG:IEI vs $SPX

HYG

Another rejection at $SPX 2020. Mortgage applications missed and so did retail sales. While consensus appears that the lows are in one can’t help wonder about the potential downside energy that would be released were the lower support line to be broken:

SPXD

VIX D

SPX M

NQ

October 13, 2015

$ES: 2020 $SPX held again despite a brief breach. The reversal was led by small caps. The structure remains interesting to say the least:

`$ES


Yesterday it was the ZWEIG thrust today it’s the SKEW everybody is buzzing about with a record reading above 148.

For those not familiar with the SKEW index it is an option based indicator that measures perceived risk of a coming price event and the figure above suggests a 15% probability of a 2 standard deviation event in the next 30 days.

The sudden surge after this rally makes one wonder if someone knows something. I don’t know and I can’t trade on it. Why? Because the previous record read came on October 16, 1998 with a reading of 146.88.

But what happened after that reading? Nothing, markets went higher:

1998

It’s all interesting stuff, but I can’t base my trades on that. I stick to what we know best: Our charts and signals.


$IWM: What’s that trend?

IWM


$ES:

ES


Signal chart update:

200AR BPSPX NYSI


October 12, 2015

Boring inside day. Earnings starting in earnest tomorrow. Despite the big rally over the past 10 days the banking index appears only mildly enthused:

BKX W

$HYG. Interesting spot to turn:

HYG


$VIX down 10 days in a row. Never made it to 11. Complacency back or simply a retest of recent lows?

$VIX


Watching that $DJIA & $YM:

DJIA

$YM


Seemingly unnoticed this past week: The weekly $NYMO printed a super rare reading of +88. How rare? Only 4 times before in the past 16 years. Why so rare? All came in context of larger corrections. The result in 75% of cases: New lows

NYMO2

Put the $ES chart in context:

ES


October 11, 2015

Monthly Chart update: 

The recent rally has pushed monthly charts into key MA resistance making the next 3 weeks still a key battle zone for control:

SPX DJIA COMPQ $NYSE

RUT


October 10, 2015

Some select weekly charts below but first the daily $ES chart to consider:

ESD

SPXW RUTW TRANW DJIA W


October 9, 2015

More charts this weekend, but for now:

$NQ pushing against supply within well defined trend lines:

NQ


No, it’s not a 2011 or 1998 type of bottom. If it is a bottom. Why? The structure of lasting bottoms prior to 2012 tend to look differently:

$SPY

They all have one thing in common: A lower low. The last “W” or double bottom was in 2008 and that famously didn’t last. After 2012 all key bottoms have been “V”s. What’s this here then?


An 8% rally in 9 days and all we get is 79 new highs versus lows?

HL

$NYAD showing lower highs on the advance:

NYAD


Since everyone is all of a sudden bullish in the media and on twitter I’ll at least offer a potentially variant view on a couple of charts. Price still has to confirm either way:

$ES da

$YM hit its 61.8% Fib on day 9 of an uninterrupted advance:

$YMD


October 8, 2015

How overbought is this market? Check the historical daily and weekly $NYMO charts:

$NYMO D $NYMO


148 handles in 8 days for 8%. The massive squeeze continues unabated and right into resistance. Charts are short term heavily overbought and complacency is setting back in as lows and Ws are called everywhere. And why not? Bad news is good news and the Fed will remain easy. Right?

To be sure the potential OPEX target is still out there:

SPX RM

Supporting the rally: Relief on the high yield front:

HYG

Yet, with markets this overbought some patterns raise major concerns:

$DJIA


Look what the $VIX just did:

VIX

$ES: Inside day so far.

ES


Interesting backdrop shaping up. Stocks are very much overbought on $NYMO:

NYMOD

While hitting major structural resistance:

SPXM1

Is the correction over? What correction:

HL


October 7, 2015

Another vertical rally closing at the highs. Are buyers aiming for a repeat of October 2014? A similar move may well result in another tag of the broken trend line:
$SPX
One key difference: Back then moving averages were sloping upwards, now they are sloping downwards.
One nagging thought: Are we to believe that the 2015 correction truly bottomed as a result of circuit breakers stopping all price discovery? You tell me.

$SPX monthly 5 EMA: Perhaps the most important line in the sand.

We discussed it again this weekend in Hanging by a Thread.

Look where we rejected today:

SPX M


$NYAD versus $SPX

NYAD SPX


$SPX: A kiss rejected? (50MA)

SPX

$ES:

ES


Updated signal charts:

NYMOD

NYSI

BPSPX


October 6, 2015

Despite a very boring consolidation day today the suspense is building. Next week is OPEX and the prospects are setting up for either a glorious rally or a glorious failure. Both options remain very much alive at the current juncture of patterns:

SPX


M1 money supply remains high and above October 2014 levels. The trend remains unbroken:

M1


$DJIA: Did today’s peak tag the upper trend line of a massive bear flag?

DJIA


Negative RSI divergence on $ES 4 hour:

$ESdiv


$IBB sporting a potential bear flag here:

IBB


People get bullish when prices go up and bearish when they go down. Illustration in point: Jim Cramer

But so it goes. Massive rally off last week’s lows and folks mispositioned for this ramp are hurting I suspect, yet price remains in the same range since the August flash crash:

ES

However, the weekly charts shows progress, especially with a northwardly turning MACD:

SPX W

OPEX is coming. For now bears look to have lost their grip. HYG improved yesterday as well:

HYG


October 5, 2015:

For the latest market analysis please visit: Hanging by a Thread.

Last week they didn’t want them, now they can’t get enough of them. Massive squeeze. $DJIA tagged its 50MA and upper Bollinger band:

$DJIA

$SPX:

SPX D


Pedal to the Metal: $NYAD

NYAD


Well, this is frankly exactly the type of rally we’ve been anticipating per the inverse pattern outlined last week (see further below October 1). But this is as vertical as it gets and so we locked in major profits today:

SPXRM2

$YM futures:

$YM


Some updated signal charts:

NYSI BPSPX

200


$ES overnight squeezed past the 61.8% Fib reaching 76 handles off of Friday’s lows:

ES$


October 3, 2015

Is this market nuts or what? Between the #NFP release and close the $ES traversed 105 handles. In one trading day. This type of action can make or break accounts.

This week were very vocal about a big rally coming.: Mella’s charts on her twitter steam (see technical charts September 29) and our member update Down & Dirty Tricks (which we made public on Sept. 30). In both updates we outlined our buy weakness strategy and we are pleased to say it worked beautifully. No doubt the NFP dump was concerning, but we hedged , covered and re-bought the early weakness and scaled out again by close. What a day and week.

Inverse pattern follow-up with Friday’s close (earlier pattern from Friday see further below):

SPX

Below are some weekly charts without commentary, but the basic message seems to be: Potential for double bottoms and possible “W” formations coming. But bulls are far from out of the woods:

IBB INDU NYSE RUT SPX 100 SPXF TRAN WLSH

October 2, 2015

What a trap. Massive daily bullish outside reversal, huge weekly bottoming candle combined with double bottom and turning and crossed MACDs. This will take some time to digest:

SPX W


Neckline busted:

SPX D2


At some point bears must ask themselves: Why doesn’t 1900 $SPX break? The answer may potentially lie in this emerging inverse pattern. A revisit to this week’s overnight highs would break the neckline and could trigger a move into the 1970 and above 2000 upon confirmation. Likewise a close below 1900 $SPX will likely negate the pattern:

$SPX


$NFP ouch:

S1

Bulls have work today it seems:

ES2


October 1, 2015

Bulls saved the day in green. Sellers could not bring $SPX below 1900. This is now the key challenge for sellers into NFP tomorrow:

RM


Early month shake & bake. $ES retraced back below 1900, but $SPX held above 1900 for now. Weakness correlated to renewed push lower in $HYG. $AAPL had a rough week, but has a potential descending bullish wedge here…unless lows get taken out…

$ES AAPL HYG


FYI: Latest market analysis here: Down & Dirty Tricks

Another big push higher overnight provided a great scale out and hedging opportunity.

$ES rejected at a new trend line:

$ES

Per our weekend analysis bears need to break lows and so far they haven’t with time running out. So the poker game continues into October with major trend lines still holding:

SPX Fork

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