“Be patient with yourself. Self-growth is tender; it’s holy ground. There’s no greater investment.” – Stephen Covey
’17 Charts
Chart Book
“It is unproductive to think that the world has been unfair to you. Every tough stretch is an opportunity.” – Charlie Munger
Here are some charts from our chart book to complement the ones we posted yesterday.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily video morning call into N.Y. with a more detailed live discussion on all the charts and ideas we highlight/review in the weekly outlook and here on the blog, you should check out our Daily Webinar Group.
Still Waiting for Jackson Hole
“The gap between what you say and what you do, between what you promise and what you deliver, is like a drain in the road. The drain is where water escapes, just as your power will seep away if there is a difference between your words and your actions. Ask yourself everyday, were your thoughts, words and actions aligned? Ask someone else what they saw in you too. Feedback is the food of all positive change.” – bkwsu.org
As we discussed in our latest weekly outlook video, we’ll just have to be patient as we wait for Draghi and Yellen out of Jackson Hole on Friday. We’ll be paying attention to see if Yellen can muster up some courage and show a hawkish side instead of reverting back to her dovish nature and if Draghi will act on the continuing improving picture in europe and disappoint the status quo.
Here are some overview screens for equities, GBP and risk on/off monitor:
As always, there is no substitute for real-time/live action; if you are interested in attending a daily video morning call into N.Y. with a more detailed live discussion on all the charts and ideas we highlight/review in the weekly outlook and here on the blog, you should check out our Daily Webinar Group.
Pause
“We cannot see our reflection in running water. It is only in still water that we can see.” – Taoist proverb
Tuesday and Wednesday candles in the ES are telling you where we’re at; basically, market is not sure if it’s time to book gains and get real or simply ignore everything and continue ramping…
Our base-case hasn’t changed; market is in a topping phase where charts like Dax, Nasdaq, Amazon, Google and Tesla have already topped. Market internals continue to look weak and charts like JNK, IYT, XRT and IWM are not painting a picture on strength and stamina… keep an eye on these.
As recently discussed, we’ll be keeping an eye on XLF into opening flows today. Extremely interesting chart location…
No change to what we have been discussing on the FX side, don’t forget to keep an eye on the GBPJPY swing, we’re approaching a pivotal level in the middle of the broader range we have seen for the most part of this year.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily video morning call into N.Y. with a more detailed live discussion on all the charts and ideas we highlight/review in the weekly outlook and here on the blog, you should check out our Daily Webinar Group.
Patience is a Virtue
“Virtue is persecuted more by the wicked than it is loved by the good.” – Buddha
As we wait for some kind of a healthy correction in the equities markets, ‘patience is a virtue’ comes to mind. However, seasoned traders will know that despite this being true, it is far more important to get your sizing right than to be patient. You will not be able to give yourself the luxury of patience and waiting if you get too big.
Back to the charts. What are we focused on? Techs and Small Caps; not looking to perky whilst the Dow is still enjoying experimenting with levitation into the ‘Trump 22,000 Level’ or should we say ‘22,000 Top’? Maybe just wishful thinking on our part but you have to admit that it would be pretty poetic…
You really have to be paying attention to not only the way the RUT has been trading but especially to the intraday price action on all of the big tech names… it’s a big tell on the state, strength and conviction of these recent low vol ramps we have been seeing. Ignore this at your own peril. Furthermore, as we have been discussing repeatedly, we also believe it would be a mistake not to keep an eye on recent action in the Dax, Transports, Financials and so on… a lot of cracks in the system.
As a general reminder, we are not looking for a crash. We are not looking for the next secular bear market. We are not looking for the end of the work. We are just humble students of the markets and price action trying to highlight what we are seeing and were the risk are going forwards. Clearly, the ramps can continue but the ‘risk’ in terms of ‘velocity and magnitude of moves’ are clearly to the downside. We’ll try to expand on this in the next weekly outlook video.
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Interesting Times Ahead
“If you look around, complacency is the great disease of your autumn years, and I work hard to prevent that.” – Nick Cave
Old time blog readers have sat through more than enough rants about who looks at the Dow when talking about the market so we’ll avoid going down that route but it would be a shame not to save this tweet and add the accompanying chart:
Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!
— Donald J. Trump (@realDonaldTrump) August 1, 2017
Back to trader talk, here is where we are in terms of context:
S&P Futures have posted range of <1% for 18 days in row. Run's extended once in at least 20 years, on 30 Jan-17 (run lasted 22 days) #stocks
— Context Analysis (@MarketsContext) August 1, 2017
Now that Apple earning are out of the way and as discussed in our latest weekly outlook video, we’ll have to see how the data flow into the rest of the week shapes up. Overall the ramp higher continues but as we have been highlighting (keep an eye on updated charts posted on Twitter), there are still a lot of signs of weakness in many tech names and the transports chart is downright ugly.
Very nice action on Crude at the key pivotal 50 level, keep an eye on 48.20s for the next leg of this move as it tries to get some traction.
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Waiting for NFP
“It is better to be late, and catch the right worm, than catching the snake’s tail.” – Benjamin Lee
Highlighted in our latest weekly outlook video, the real action is probably waiting for us towards the back end of the week. As discussed, context is key and markets have a tendency to press the pain trade as far as possible, especially in low liquidity o/n times and as market participants wait for high risk events to hit the wires.
Experienced traders understand that markets tend to behave in a healthy manner the majority of the time but this does not mean that they do so all the time. Even if this latest comment may seem trivial, it is very hard to build a long-term career as a traders unless one really understands this and adapts accordingly. We’ll keep the rants for the Daily Webinar 😉
Nothing much to add from what we discussed, so we will just leave you with a selection from our chart book:
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
The Chop Zone
“An investment in knowledge always pays the best interest.” – Benjamin Franklin
We have been talking about expecting to see the VIX spike into the 13/15+ area before it manages a sub 9 daily close but little did we know that the fight would be concentrated inside the 10 to 9 range. Talk about chop and tight compression… as we have been saying, it’s just a waiting game; who is going to give up first.
On the currency front, as highlighted in recent video outlooks and charts, the focus remains around those 200WMA for most pairs with DXY giving you the best overview of the gravitation pull/pain trade currently in play.
In non 200WMA currency news, we would also start to keep an eye on this very important structural resistance on cable.
On the tech front, despite this aggressive o/n Nasdaq ramp (can’t stop won’t stop), we would still be keeping an eye on NVIDIA today and into the end of the week.
Note for active 50Scouts members: make sure you keep an eye on your inbox for a free pass to tomorrow’s daily webinar session (make sure to check your spam folder too).
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Mid Week Update
“The secret of success is to be ready when your opportunity comes.” – Benjamin Disraeli
