Trends going into 7/18/2022 and Financial Stocks Leading the Way
So, I ended up taking a L on my weekly trade to see the 12-Hour show a downtrend signal. Obviously in hindsight, when I saw it flashing at 3730 I should have just sold out, but it had hours left and even with some pullback, I didn't expect things to flip so much.
The 4-Hour has now yet again reversed course to an Uptrend this morning. Having done trend trading for 2 years, I've never observed the 4-Hour flip without showing any progress so many times in such a short duration.
Friday, the Financial Sector of the S&P saw massive buying. After leading the plummet just days before because JP Morgan and Stanley Morgan missed earnings by a large margin, even they joined in the chorus of buy crazy for financials as the sector rose 3.5%.
There are more financial earnings come out this morning here shortly, and I'm guessing the market has ultimately believed that these companies are making earnings, and if not, they believe the forecast going forward looks amazing.
I can't say I can understand this sudden risk taking behavior with all the negative news pouring in, but I will at least respect it. I'm currently just neutral in my outlook going into this week, and no longer bearish.
It seems the most reliable trend to follow the last month has been the 30-minute trend, which is also unusual. That being said it has certainly run the usual duration of a trend, and it is time to pass the baton off to another timeline.
The Bullish Outlook;
I'll be looking for price to return to the 4-Hour trendline of 3882. This will allow many indicators to cool off on being close to overbought, and allow a firm launch upward. We have managed to break that downtrend line that has been coming since April, and so the short return down and propel upward would show a firm dedication to continue this bullish trend.
The Bearish Outlook;
There is RSI Divergence on the Daily timeline. While we haven't closed out up here in the 3900s for this day, you can clearly see that RSI is in an upward trend for higher highs, however, we don't have higher highs. We actually have lower highs. On the bottom of the price action, our daily has only closed out with higher lows, so the higher low RSI is consistent and not showing any divergence. There really aren't any trends that support a downward movement yet however, with the only trend being the 6-Hour downtrend pulling things back down. We are however, still in a Daily Downtrend and a Weekly Downtrend, and the bears in the market have been dormant now for over a month. Also, given how suddenly dominant of a trend showing it is, I'll be looking for the 30m to show a downtrend if things to start to move downward.
Overall concerns;
The Low Volume over the last month is an issue. There is a serious difference between June 20th to today and the market for most of the year. Only a period in March saw such low volume trading for this long (large rally that died off and ultimately led to new lows). In terms of long-term direction, if this recent bull rally fades, I'd expect a battle between the 6-Hour and this 4-Hour Uptrend, and look for things to bounce between 3786 and 3880.
Additionally, I'll be watching for the price to pull up enough to drag the 6-Hour into an uptrend. It doesn't appear that will happen by 0700 EST, so I'd look for it to happen by 13:00 EST. This week, and perhaps next week, are really going to be the catalyst drivers for direction going into the rest of the year.
The 4-Hour has now yet again reversed course to an Uptrend this morning. Having done trend trading for 2 years, I've never observed the 4-Hour flip without showing any progress so many times in such a short duration.
Friday, the Financial Sector of the S&P saw massive buying. After leading the plummet just days before because JP Morgan and Stanley Morgan missed earnings by a large margin, even they joined in the chorus of buy crazy for financials as the sector rose 3.5%.
There are more financial earnings come out this morning here shortly, and I'm guessing the market has ultimately believed that these companies are making earnings, and if not, they believe the forecast going forward looks amazing.
I can't say I can understand this sudden risk taking behavior with all the negative news pouring in, but I will at least respect it. I'm currently just neutral in my outlook going into this week, and no longer bearish.
It seems the most reliable trend to follow the last month has been the 30-minute trend, which is also unusual. That being said it has certainly run the usual duration of a trend, and it is time to pass the baton off to another timeline.
The Bullish Outlook;
I'll be looking for price to return to the 4-Hour trendline of 3882. This will allow many indicators to cool off on being close to overbought, and allow a firm launch upward. We have managed to break that downtrend line that has been coming since April, and so the short return down and propel upward would show a firm dedication to continue this bullish trend.
The Bearish Outlook;
There is RSI Divergence on the Daily timeline. While we haven't closed out up here in the 3900s for this day, you can clearly see that RSI is in an upward trend for higher highs, however, we don't have higher highs. We actually have lower highs. On the bottom of the price action, our daily has only closed out with higher lows, so the higher low RSI is consistent and not showing any divergence. There really aren't any trends that support a downward movement yet however, with the only trend being the 6-Hour downtrend pulling things back down. We are however, still in a Daily Downtrend and a Weekly Downtrend, and the bears in the market have been dormant now for over a month. Also, given how suddenly dominant of a trend showing it is, I'll be looking for the 30m to show a downtrend if things to start to move downward.
Overall concerns;
The Low Volume over the last month is an issue. There is a serious difference between June 20th to today and the market for most of the year. Only a period in March saw such low volume trading for this long (large rally that died off and ultimately led to new lows). In terms of long-term direction, if this recent bull rally fades, I'd expect a battle between the 6-Hour and this 4-Hour Uptrend, and look for things to bounce between 3786 and 3880.
Additionally, I'll be watching for the price to pull up enough to drag the 6-Hour into an uptrend. It doesn't appear that will happen by 0700 EST, so I'd look for it to happen by 13:00 EST. This week, and perhaps next week, are really going to be the catalyst drivers for direction going into the rest of the year.
Comment:
BofA Earnings in - Missed both EPS and Revenue by a small amount.
Comment:
As far as I can tell, looks like Goldman Sachs beat EPS and Revenue.
Comment:
Last big one of the day, Charles Schwab, beat Earnings and Revenue as well. Appearing the suspicion that forecasters were withholding updated forecasts to be false.
Comment:
Usual abhorrently low volume open we've been seeing for some time now... and with no direction really here so far. Shocker. Perhaps because the rise overnight was a bit much for the opening. Prepare for a whipsaw day with some potential direction at the very end of the day.
Comment:
Scalped myself a short from 3903 to 3890. I hate scalping... but it meets my daily money target. We are nearing that 4-Hour Uptrend line, I'll be watching it there for a buy
Comment:
As you read News headlines today, realize how much BS is out there...
The Index was HIGHER prior to the earnings reports. In spite of so many headlines saying that the earnings sent stocks up. Since the earnings, it has only declined. News headlines are such a joke...
The Index was HIGHER prior to the earnings reports. In spite of so many headlines saying that the earnings sent stocks up. Since the earnings, it has only declined. News headlines are such a joke...
Trade active:
Went long at 3881
Trade closed: stop reached:
Was stopped out at 3883 after it backtracked... So now where are we going? 30m downtrend is signaling...........
Comment:
Ah yes, these super low volume 10 point moves.. I just can't get enough of them.
Comment:
Interestingly enough, while I watch this whacky market... Of the three tops we had, the first couldn't get past a 12-Hour Uptrend, the second then didn't get past the 6-Hour Uptrend, and at this point, the third hasn't gotten past the 4-Hour Uptrend.
Comment:
30m is Downtrend
1-Hour is Downtrend
2-Hour is signaling (closes at 15:00 EST)
1-Hour is Downtrend
2-Hour is signaling (closes at 15:00 EST)
Comment:
Where is the Buy the Dip rally today? What, did we finally start acting rationally now? After all this time?!
Comment:
So, if I can understand this decision making lately...
Record inflation and potential recession looming... Risk On
Apple slows down hiring, but is still hiring... Risk Off
Got it... LoL
This market lately... I luckily took my daily quota and just sat out today. Guess I should have bought in when it passed the 4-Hour Uptrend, and not tried to catch the actual trend.
the 4-Hour didn't flip, but basically once a 5m trend had developed down, hours later it took down the 15m, then it just spiraled with the 30m and 1-Hour. Took out the 2-Hour and 3-Hour also. If this continues and reverses the 4-Hour again, I will literally just be scalping for lunch money until this madness is over, heh.
Record inflation and potential recession looming... Risk On
Apple slows down hiring, but is still hiring... Risk Off
Got it... LoL
This market lately... I luckily took my daily quota and just sat out today. Guess I should have bought in when it passed the 4-Hour Uptrend, and not tried to catch the actual trend.
the 4-Hour didn't flip, but basically once a 5m trend had developed down, hours later it took down the 15m, then it just spiraled with the 30m and 1-Hour. Took out the 2-Hour and 3-Hour also. If this continues and reverses the 4-Hour again, I will literally just be scalping for lunch money until this madness is over, heh.
Comment:
If you're gonna buy in overnight, I'd look at how it acts at the 3845 level. the 3-Hour failed to close above and that is about where the 2-Hour started. Although at this point, perhaps 30m and less are the only trustworthy trends.