dereckcoatney

dereckcoatney

A beautiful bear flag on the Brazil index. I haven't much to add about that, except that, like the Canadian TSX, the strong counter rally after the June high and subsequent drop has broken the channel from the February high to the June high. Also, very locally, the most recent price action has formed a wedge similar to the one on the S&P 500: The long-term...

dereckcoatney

Canada's TSX is an interesting index. The stocks listed in it represent roughly 70% of the market cap of all publicly traded Canadian companies. For perspective, the last data I could find puts the S&P 500 at around 83% in the US. As with many indices, it formed a nice wedge from the March lows, but there are some special differences here: the island top...

dereckcoatney Updated 

Toyota, much like many stocks and indices around the world, has an all too familiar flag formation off the March lows. Toyota's is very clean in structure, with two distinct "humps" inside of it. I very much expect this to break down. In the first crash, it broke a long-term trend line (red) that dates back about eight years. That will be easily broken again...

dereckcoatney

As I've mentioned before in my previous posts on Bitcoin, I do not trade it but watch it with great curiosity to see how it might behave if the markets totally fall apart again. I expect those forces to be a resumption of the deflationary forces that are trying to exert themselves. In that scenario, if that is what we are facing, I expect this asset to fall with...

dereckcoatney

I'm a little agnostic on the metals, because on the one hand, unprecedented central bank interventions should lead to inflation, and these are the two most accessible and obvious hedges against that. On the other hand, I believe that the deflationary forces trying to assert themselves in the world were abruptly arrested by those very interventions. So, do we go...

dereckcoatney

On the WTI Crude chart, I detect a head and shoulders topping pattern probably forming. Look for this to pullback from here.

dereckcoatney

On the long-term weekly chart, the dollar index looks to have formed a triangle. Since it is not symmetrical, and considering the fundamental landscape (I believe the markets will deteriorate quite dramatically soon), I believe this will turn out to be a continuation pattern, leading us to the upside. That said, the short-term chart looks bearish, so perhaps we...

dereckcoatney

On January 22nd, the 10-year US treasury yield fell out of a flag and we all know what happened then. Interestingly, it may be forming another flag now, and if we look closely, it may have actually broken and failed a backtest: Watch this carefully.

dereckcoatney Updated 

The top channel is so flat that it almost looks like a rectangle pattern, but today's actions brought the SPY 0.15 above the channel strike it made on the 16th of June. So, strictly speaking, this has taken on the look of a wedge continuation pattern. If this structure is valid, then that should be all she wrote. The puke into the close looked very promising....

dereckcoatney Updated 

Please see my previous post from earlier today regarding the three blowoff tops. Top of the market in February, top of the bear market rally in June, and very quite possibly today. I want to follow that post up with an observation about gaps. It's a tale of four gaps in particular, two on the SPY, two on the VIX. When the SPY first gapped down in February, the...

dereckcoatney

I guess it's letting us short it for a second time.

dereckcoatney

As the market continued its relentless push to the upside today, I noticed that channels I drew were not being retested with consolidation and that instead, price action only accelerated to the upside. This is a phenomenon called "accelerating fan lines" and they are a sign of a "blowoff top." When I saw that on the short duration scale, I laughed, because that's...

dereckcoatney

Tesla the rocket ship not only regained its wedge, but then stuck its finger in the eye of every Tesla bear by trying to revisit the top range of that wedge. That said, it had to pay a steep price for that. It now has one of the very sharpest bearish RSI divergences I have ever seen. On a swing trading time horizon, the path is down.

dereckcoatney Updated 

When the gold/silver ratio is high, gold is relatively more expensive than silver, by historical standards. Some people use this ratio to trade between the metals. For a very long-term investor, the trade works like this: when the ratio is high, buy silver, and wait for the ratio to revert towards its mean. Then, sell the silver and buy gold at a better...

dereckcoatney

If you're holding short positions, today's closing ramp stung. That said, I want to point out that we remain within a down trend channel formed from the highs on the 9th and 23rd of June. Today's short covering ramp came up to test that channel, but could not break through. We will need to monitor this overnight to see if it is tested again. That said, we are...

dereckcoatney

During the rally from the March lows, the S&P 500 (top chart) progressively made a series of higher highs and higher lows, indicating an intermediate change in trend (the long-term trend is of course still down ). Beginning from the June 8th high, we have begun the process of producing a first low, and a lower high, but not yet a lower low. I expect that to...

dereckcoatney Updated 

Bond yields absolutely did not confirm today's "rally." Despite the markets moving up, treasuries were bought. As demand for bonds increases, the price of those bonds goes up, which lowers the yield each bond returns (less interest "returned" for each dollar invested). Thus, despite the equity market's gains today, which have the appearance of a "risk on"...

dereckcoatney

Much like the major indices, the stocks on the New York Stock Exchange formed a rising wedge from the March lows which has since broken down. And, also like the other indices, it produced an island reversal top from June 5th through the 10th. Though it has found support on the 50-day simple moving average (blue), it remains far below the 200-day simple moving...