Enlarge any chart by clicking on it.

Unless otherwise specified, ALWAYS use the 15min chart to enter my recommended plays because
CONFIRMATION is a MUST. In other words, you need to see a 15min candlestick that CLOSES beyond
the entry point, then enter when it moves 10cents after the high/low of that candlestick.

Friday, September 11, 2015

SPX WEEKEND REVIEW

For a long time now the market has consistently made news-driven big opening gaps. Therefore posting day trade setups was pointless because the plays would have been invalidated right at the open. So the only thing I could do was to post swing trades until coherent price action starts again, which is likely going to be after the next FOMC announcement scheduled for Thursday.
I really hope the Fed will raise rate during this meeting so that I can stop hearing about it. It has become a major distraction now because of China's weakness. The market had priced in a September rate hike, but because of the recent weakness is China, I think the market is not so sure of a September rate hike anymore. That is a problem because the market tends to act irrationally when there is uncertainty.
Though a rate hike will cause wild volatility on the day of the announcement (given that it is not as priced in as before), it will help calm the market by removing the cloud of uncertainty that is hovering over it.

This period of wild volatility was a good time to stay out of the market. I like volatility but we are experiencing wildness not volatility. I define volatility as the market making big moves in a coherent/sequential manner. That is, the market making big moves in patterns e.g Cup-n-Handles, Wedges, Head-n-Shoulders etc. But that is not what is happening at the moment. Daily we see a market that makes big gaps but also not forming intraday setups that can be used for a quick play.

Regarding China, I believe for the next 6-8months it will make strong moves up and down in a coherent manner as it stays in a sideways range while creating an Inverse Head and Shoulder bottoming pattern before a run up begins that will last for years. So the damage has already been done. The healing process is now taking place. It is now time for long-term traders/investors to start buying Chinese stocks again. But a drop towards the end of the year as it continues forming a bottoming pattern should be expected.
Another factor regarding China is that the economic data has been very bad of late. That is a bullish (not a bearish) sign.
When folks/media start giving all kinds of reason to stay away or short Chinese stocks/ETFs that is the best time to be bullish.

SPX-MONTHLY III


SPX-MONTHLY II


SPX-MONTHLY I


SPX-WEEKLY


SPX-DAILY VI


SPX-DAILY V


SPX-DAILY IV


SPX-DAILY III


SPX-DAILY II


SPX-DAILY I


SPX-30MIN II


SPX-30MIN I


SPY-15MIN
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