Stock Market Indices Review for Week 35 in 2015

Aug 29, 2015 -

Stock Market Highlights - Week 35


- Fed's Fischer: Too early to decide on Sept hike.
- WTI was $45.22 and brent crude oil $50.02 on 8/28. Signs of reversal?
- Second Estimate: US 2Q15 Gross Domestic Product Expands by 3.7%.
- Buffett's Berkshire takes $4.48 billion stake in Phillips 66.
- Brazil has entered recession as country's economy contracted by 1.9%.


The Dow Jones Industrial Average (DJIA) closed at 16643.01, which was about a 200 point increase versus a week ago of 16459.75 on Friday, August 21st 2015. We are seeing a small bounce back from the lows of Monday. This volatile price action could suggest further volatile action to come. We'll need to watch to see if the price action can over take the 20DMA or if that becomes resistance. A bounce was likely as we heavily selling that led to price levels that were not seen in almost a year. 

If indeed we are in the beginnings of a correction, I'd almost want to short at the 20DMA and then put my stop just above that and a target of the Monday lows. However, we'll continue to check price action and see what happens before making any decisions. 




The S&P 500 closed at 1988.87 on Friday, August 28th 2015 versus a week ago of 
1970.89 on Friday, August 14th 2015. This was about a 19 point swing back up. We are now eyeing the 2040 level as that had been support prior and is right next to the 20DMA. It is likely that we would see a retest of that level, however we'll have to see where the price action takes us next week.  


The Nasdaq (COMPQ) closed at 4828.33 on August 28th, 2015 versus 4706.04 on August 14th, 2015. We are likely to see resistance at 4900 as that was prior support. There are a couple gaps just above current price levels that programs will be targeting to fill. 



The last two trading sessions had oil jump up. For the first time in over two months, we finally see that the downtrend has been broken. On the UCO (ProShares Ultra DJ-UBS Crude Oil) you can see that we closed above the 20DMA, however we shall see if this will hold up.


Disclosure: We have a position in UCO and UPRO at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 34 in 2015

Aug 22, 2015 -

Stock Market Highlights - Week 34


- U.S. markets tumbled more than 5% as worries mounted over state of the global economy.
- WTI was $40.45 and brent crude oil $45.46 on 8/22. Still no bottom on oil prices, yet.
- Alibaba shares plunge closer to $68 IPO level.
- Uber projects three-fold rise in 2015 bookings worth $10.84B.
- Valeant to buy female Viagra maker Sprout Pharma for $1B.




The Dow Jones Industrial Average (DJIA) closed at 16459.75, which was about a 1017 point decrease versus a week ago of 17477.4 on Friday, August 14th 2015! If you still don't believe we are in a downtrend, then I don't know what to tell you. As we had mentioned last week, in order for the bulls to take control we wanted to see price action above 17610. Well, the bears ripped that dream from the bulls. Instead we saw massive selling and the fact that it closed at the low of the day is not a good sign for the bulls. 

Though the bears appear to be in charge in the short-term, for those who are not short the market, we would want to wait for a pull back before trying to chase this sucker down. 


The S&P 500 closed at 1970.89 on Friday, August 14th 2015 versus a week ago of  2091.54 on Friday, August 7th 2015. This was about a 120 point swing to the downside. Last week, we said that it could go either way. The market decided to pick the downside and with conviction it did. 

We were ready to pick a side at the first indicator of where the market was headed. Wednesday's price action was a hint of what was to come, however it managed to hold at the 200 DMA by the end of the day. However, when the market opened just below the 200 DMA on Thursday, that was our signal to watch for downward action. We initiated a small position shorting small caps on Thursday, August 20th.


The Nasdaq (COMPQ) closed at 4706.04 on August 14th, 2015 versus 5048.23 on August 7th, 2015. We saw signs of deterioration last week and now we have confirmation. These gap downs in the last two days were even more aggressive than that of the SPX and the DJIA. Still the action suggests we are not done and the dust has not settled. Like the DJIA, this would not be a time to chase this price action. We would like to see it pull back and then enter on confirmation of further continuation of bearish action. 




FitBit Inc. (FIT) has been a mention of ours in the past few market reviews. It is a fitness band designer and manufacturer. Also one of our most profitable trades in the last two months. 

After disappointing the market on earnings, the stock gapped down. Our play was a gap fill, however we needed to see price action reverse. At the first sign of such action, we entered in and got denied at the 20 DMA, where we prompted exited. 


Disclosure: We do not have a position in FIT at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 33 in 2015

Aug 15, 2015 -

Stock Market Highlights - Week 33

- Google creates a new holding company called ‘Alphabet’ to hold a collection of companies.
- WTI was $42.23 and brent crude oil $49.22 on 8/14. See no bottom on oil prices, yet.
- Buffett's Berkshire sheds National Oilwell Varco and Phillips 66 stock.
- JC Penney's net revenue totaled $2.88B, up from $2.80B during the same period last year.
- British trader charged in '2010 U.S. Markets Flash Crash' released after bail reduction




The Dow Jones Industrial Average (DJIA) closed at 17477.4, which was about a 104 point decrease versus a week ago of 17373.38 on Friday, August 7th 2015. We've are now in a pretty clear downtrend and this is evidently favorable for bears. For the bulls, we'd like to see price action above 17610 or the 20 DMA. This would signify a return to the prior trading range. 

Though the bears appear to be in charge in the short-term, currently there appears to be no good short opportunities. We want to limit our risk to reward ratio when entering trades. One way of doing this is through position sizing. However, I digress. In any event, a move towards the 20 DMA or the 50 DMA present low risk short opportunities. In addition, I'd like to see the STO (stochastics indicator) overbought. That is the trend follower stock plan.


The S&P 500 closed at 2091.54 on Friday, August 14th 2015 versus a week ago of 
2077.57 on Friday, August 7th 2015. This was about a 14 point swing to the upside. It looks like we are just ping ponging back and forth and have formed a symmetric triangle. Typically, this means there will be a break in either direction.  

To us the SPX looks fairly neutral right now, meaning there is no clear indicator as to whether we will see further downside or upside action. For now, it appears to be consolidating horizontally. However, if we had to pick a side and just based on recent market action, more downside action could happen.


The Nasdaq (COMPQ) closed at 5048.23 on August 14th, 2015 versus 5043.54 on August 7th, 2015. Once one of the strongest in the group, COMPQ is now showing signs of deterioration. We can see a bearish head and shoulders chart pattern below. The top of the triangle being the head and the two sides being shoulders. Like the SPX it now looks like the COMPQ is in neutral territory with a hint of bearish indicator. When we see this sideways action occur, it is typically a stock picker's market. That means you will find stocks that break out and break down. You just have to be picky with what you select. This is in contrast to a bullish market where every other stock just goes up or alternatively a bearish market where just about everything goes down. 


Etsy Inc. (ETSY) is a marketplace similar to that of Amazon and Ebay, but in a niche market of handmade or craft goods. Its recent IPO allowed individual investors to purchase stock at a price of $16, which we were able to take full advantage of. The day it started trading on the market, the stock shot up to $30. Whereby we sold the day after for a hefty profit. 

However, since then the stock has missed earnings expectations and still continues to show a net loss on its profit and loss statements. The market has not been kind to it as we've seen it trade as low as $13-$14 a share. There were two opportunities to take advantage here. The first in July and the second in the following month August. First, in July we saw a reversal of the downward trend and in August a double bottom. 

Though it is possible that we will see a complete gap fill of the gap down in August, current price action shows some weakness. We'd like to see a close above the 18 price level to see if it can make a run at $22. 


Disclosure: We do not have a position in ETSY at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 32 in 2015

Aug 7, 2015 -

Stock Market Highlights - Week 32

- Fitbit Quarterly revenue jumped up to $400.8 million, which beat a $319 million forecast.
- WTI was at $44.66 and crude oil $49.52. Oil prices continue to decline.
- Disney revenue in its third quarter totaled $13.1B, a 5% increase last year same period.
- U.S. unemployment rate held at a seven-year low of 5.3%.
- Service Industries in the US expanded at the fastest pace in a decade.




The Dow Jones Industrial Average (DJIA) closed at 17373.38, which was about a 316 point decrease versus a week ago of 17689.86 on Friday, July 31st 2015. We've now broken the trading range and it is confirmed that we are trending downward. This is looking good for the bears in the mid-term (weeks to months). 

However, from a a short-term perspective (days - a week), we see a potential reversal looming. With the hammer pattern on Friday, we should be looking out for a follow through confirmation bullish candle on Monday. This is somewhat likely considering how oversold the DJIA is. A potential trade would be to go long the DIJA and put your stop just below the hammer pattern. 


The S&P 500 closed at 2077.57 on Friday, August 7th 2015 versus a week ago of 
2103.84 on Friday, July 31st 2015. This was a 26 point swing downward. Essentially of all last week's gains have been wiped out. 

Similar to the DJIA chart, we see hammer candlestick. However, without any confirmation of this bullish candle, we can only guess if this is a true indicator of positive prices to come. If you look closely, you can see that the 50 DMA crossed the 20 DMA and this is otherwise known as the "deathcross". This is definitely a bearish signal. Though I would wait until I see a run up back to overbought territory before trying to short this market.


The Nasdaq (COMPQ) closed at 5043.54 on August 7th, 2015 versus 5128.28 on July 31st, 2015. The strongest of the three indices continue to be the COMPQ. However, the head and shoulders bearish chart pattern has revealed itself. Of the three indices we've reviewed, this one seems to be the hardest to short. Though a break of the neckline at around 5000 and follow through will suggest that we will see lower prices. 



Starbucks (SBUX) was a stock that we reviewed last week. When we spoke of the chart, we liked the up trending prices, but did not like the price at the time. Well we waited for a retest of the 20DMA and lone behold, it arrived just today. 


Therefore, we dumped our Facebook (FB) position in favor of SBUX. While FB looks like it is forming a bullish flag, the SBUX chart looked stronger. 

Disclosure: We have a position in SBUX.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Scott Adam's Template for Success - How to Fail at Almost Everything and Still Win Big Summary

Aug 5, 2015 -

Scott has failed 36 times. All failures have something to teach you. 10% of the things he's tried has worked out really well. Most of the things he tried were high risk/high reward kind of things, so he expected a high failure rate. However, one thing that did work out for him was the Dilbert comic.

His book 'How to Fail at Almost Everything and Still Win Big: Kind of the Story of my Life' focuses on three core ideas.

1) Goals are for losers - Use Systems
2) Passion is overrated - Get Energy
3) Luck can be manipulated  - Change the Game


In today's complicated world, having a goal is sort of like being on a horse with a bow and arrow shooting a target in the fog and at the same time the target is moving. Sometimes you'll hit the target. But, in this complicated world, the odds are not that good that you would hit the target. When you focused on a goal, you limit yourself. Maybe there are things that you you'll miss by focusing on that goal. Instead Scott Adams suggest that you create a system. A system is something you do regularly that improves your odds and makes you more valuable. Thereby, in the long run the odds of success will be in your favor.

What is a System vs. a Goal?

Scott Adams gave an example of himself and his friend Manuel. Both of them liked girls. Adam's approach was goal oriented. He would find one girl that he was interested in and then try and figure out how to bump into her and what to say to her. Most times he would get rejected and that would be that. Manuel had a systems' approach, he would ask everyone in the room if they wanted to be his girlfriend. Every time he went through his process, he was learning to take rejection and what the best pick-up lines were. Manuel was becoming more valuable as he went no matter what happened.

A friend of Scott's would interview for jobs that he didn't want. Basically jobs that would pay less than he was making now and/or be in lower positions. His friend used it as practice and every time he would improve as an interviewer. At the end of one of the interview, the interviewer said that his friend was overqualified for the job, but the head of the department just left that role would be great for him.


Complementary skills improve your odds of success. You don't have to be the worlds best, you just need to have a working facility of it. For example, Scott was a mediocre artist, not even the funniest person in any given room, not a great writer; but when you combine the skills together, he created the Dilbert empire.

What is the difference between the diet goal and a system? Suppose the goal is to lose ten pounds. Resist the cookie will be difficult. In a system, you could replace willpower with something such as knowledge. For example, most people know that vegetables are more healthy then cake. Now suppose you go to a salad bar and see pasta and white potato; which one would you choose to be healthier. Pasta is healthier and knowledge would let you know that is what you should pick. Learning over time which type of flavoring to make your food taste better is better than resisting foods. Eventually the flavoring and seasoning of your healthy foods will be up to the level or near that of bad foods.

Replace willpower with habits. Habits can be built by doing something on a daily basis every day and giving yourself a reward at the end. If you can't do a full workout, underdo it and do half that way it always feels good and it builds a habit. 

Get energy instead of being "passionate".

If successful people didn't attribute their success to passion, what else could they say about having passion? "I'm smarter than poor people." "I did some insider trader that how I got started." "I was lucky". There isn't a good answer. The winner of American Idols all have passion. Well, have you not seen entire stadiums of people in the first couple weeks? It looked like everyone was passionate. If you go by the numbers, passion is more correlated with failure than success. In the formula for success, if you pick out passion, everything would be the same. Instead of passion, boast your energy and systems. Be physically and mentally alert to power through things you need to. You also end up liking or "having passion" for things that you are good at. In order to be good at things, you'll need to practice and put in the work. 

Luck is the elephant in the room. 

Luck can be manipulated. Getting lucky is like being struck by lighting. You can increase the odds by being outdoors in the rainstorm. In addition, you could hold a lighting rods. You can't directly control luck, but you can move to game of bad odds to better odds. People who considered themselves lucky or were more positive had a wider field of perception. They would note opportunities that other people wouldn't see. 
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Stock Market Indices Review for Week 31 in 2015

Aug 1, 2015 -

Stock Market Highlights - Week 31

- Uber just beat Facebook's venture-backed company record at over $50 billion.
- WTI was 8/1 at $47.12 and crude oil $52.21. Oil prices continue to decline.
- Frontier Communications to acquire Verizon's wireline operations for $10.54 billion.
- Exxon (52% drop in profit vs. Q2 2014) report worst quarterly result of current decade.
- Expedia Inc. revenue grew 11% Q2 2015 vs Q2 2014 to 1.66 billion.




The Dow Jones Industrial Average (DJIA) closed at 17689.86, which was about a 120 point increase versus a week ago of 17568.53 on Friday, July 24 2015. The market traded below the previously indicated trading range before jumping right back into it. Most certainly this is a choppy market and when there is a choppy market, it becomes a stock picker's market. Pick the right stocks and you will make money versus in an uptrend market most any stock will go up. 

At this time it does not look like there are any good risk/reward opportunities to go either long or short on the weekly time frame. Though upon closer inspection, you could argue going short with a stop at the 20 DMA (day moving average) of 17800 is a market play. The fact that it is still trading below the 20 and 50 DMA is a bearish sign. 




The S&P 500 closed at 2103.84 on Friday, July 31st 2015 versus a week ago of 2079.65 on Friday, July 24th 2015. This was a 24 point swing upward. Nothing to really write home about here. The chart is in the trading range and trading above the 20 and 50 DMA, which makes it some what neutral. I'd sit and wait to see what happens during the week. 

This is a stronger chart than the DJIA and if you wanted to pick stocks that will go up you had a better chance with stocks in the SPX than in DJIA this past week.



The Nasdaq (COMPQ) closed at 5128.28 on July 31st, 2015 versus 5088.63 on July 24th, 2015. The strongest of the three indices is still the COMPQ. After a quick, but painful test of the 50 and 20 DMA, it looks like the COMPQ has resumed its upward trend. However, we'll want to see a break of 5175 to see if that is the case. If not, I suspect range trading similar to that of the DJIA and the SPX to unfold. 


Starbucks (SBUX) has been committed to ethically sourcing and roasting the highest quality arabica coffee on the planet. I like to call it the legal drug. Coffee is ridiculously addicting for some people. For some people, they drink Starbucks three times a day and it becomes part of their routine. 

My biggest mistake was selling SBUX two year ago as it has what looks like at least doubled in value. In any event, this chart is almost as pure as it comes - a beautiful uptrend following the 20DMA. SBUX recently broke away from that. While I wouldn't be surprised to see it take off, I see a better entry point when it comes back or if it comes back to the 20DMA.


Disclosure: I do not have a position in SBUX.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Bill Gross: Single Biggest Reason Why Startups Succeed - Ted Talk Summary

Jul 26, 2015 -

Creating a start-ups is a great way to unlock human potential. You get a group of individuals together with the right equity incentive and you can achieve a great deal. But, what is the biggest reason why startups succeed? In other words, what matters most in a start-up?

Bill Gross has founded a lot of startups, and incubated many others — and he got curious about why some succeeded and others failed. So he gathered data from hundreds of companies, his own and other people's, and ranked each company on five key factors. He found one factor that stands out from the others — and surprised even him.

After starting and been a part of over a hundred businesses since the age of 12, Bill Gross sought out the sole reason why startups succeed.

"Everybody has a plan, until they get punched in the face." So much about a team's execution is its ability to adapt to getting punched in the face by the customer. The customer is the true reality.

What five factors did he take into account?


1) Idea - The "ah-ha" moment.
2) Team - Team execution and their ability to adapt to the customer's demands.
3) Business Model - Does the company have a path?
4) Funding - Do they have enough money?
5) Timing - Do you need to educate the world, is it too late, or just the right time to release your product? Are there too many competitors?

Number one thing that contributed to a success or failure of a start up was timing. Team and execution came in second. The idea itself was third. Business models and funding were fourth and fifth as these were things you could add later on in the business.

Airbnb came out during the height of the recession and people needed money, so people were not hesitant to rent out their places. Uber was perfect in getting drivers extra money. Z.com an online entertainment company, signed Hollywood talent, but broadband penetration was not good in the late 90s. In other words, the timing wasn't good. Years later a similar company, YouTube started and by that time the market was ready. It was timed perfectly.

Are customers ready for your product or service?

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Stock Market Indices Review for Week 30 in 2015

Jul 24, 2015 -

Stock Market Highlights - Week 30

- Amazon stock surges 17% as earnings beat expectations.
- WTI was 7/24 at $48.14 and Crude Oil $52.62. Oil prices continues its rapid decline.
- Anthem to buy Cigna for $54 billion, creating nation's largest insurer.
- US new home sales at seven-month low; manufacturing stabilizes.
- AT&T gets FCC approval, immediately completes $49-billion takeover of DirecTV.





The Dow Jones Industrial Average (DJIA) closed at 17568.53 on Friday, July 24 2015, which was about a 517 point decline versus a week ago of 18086.45 on Friday, July 17 2015. We've seen the market try and retest the top, but it ran out of momentum at 18100 and was quickly sold. Four consecutive red days after a bullish run is not a good sign for bulls. We continue to be in a wicked trading range beginning in March. 

There will most probably be another retest of the bottom of the range. This time it might not be so friendly. The previous bounce was a hard fought bounce. Would not be surprised if we actually broke below this range this time. 


The S&P 500 closed at 2079.65 on Friday, July 24th 2015 versus a week ago of 2126.64 on Friday, July 17th 2015. This was a 47 point swing downward. While this chart is a bit stronger than the DJIA, we still see that it is definitely in a trading range. I'd expect to see a retest of the bottom range as we are not yet oversold. 

For the bulls any trade at the bottom of the range with a tight stop is good risk to reward. Any break below the trading range then I suggest you go short. 


The Nasdaq (COMPQ) closed at 5088.63 on July 24th, 2015 versus 5210.14 on July 17th, 2015 . The strongest of the three indices is still the COMPQ. We noticed that the indicators still show that it is not yet oversold and that we have yet to retest the 50 or 20 DMA, which means that the trading trend is intact. 

The stocks in the Nasdaq include but are not limited to Google, Facebook, eBay, Dish Network, Costco, Amazon, and Apple. So you can see why the Nasdaq is still above water. The past few weeks, Amazon and Google have performed relatively better than its peers. 


Shake Shack is a modern day 'roadside' burger stand serving the most delicious burgers, fries, hot dogs, frozen custard, beer, wine and more! We've covered Shake Shack in the past before. There were two very good buy opportunities that we were not able to take advantage of as we were in FIT. In any event, the first occurred early April and then again in early July. We saw selling action from Jun through mid July as the price reached about $96.

The second opportunity was a the close of the high and low bar of the previous day. The stop would've been right where the blue line is. If I held the position today, I would put my stop at the 20 DMA. Though it is likely that it will break through that as indicators show it is overbought. 


Disclosure: I do not have a position in SHAK.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 29 in 2015

Jul 19, 2015 -


Stock Market Highlights - Week 29

- Q2 2015 S&P 500 earnings stand at $28.61, a 3.8% decline in growth year-over-year.
- WTI was 7/19 at $59.89 and Crude Oil $57.72. Oil prices continues to decline.
- US jobless claims dropped for the first time in 4 weeks, according to the Department of Labor
- Google's Share price hits all-time high, closed at 672.93 .
- Retail sales reduced 0.3% last month, the weakest reading since February.




The Dow Jones Industrial Average (DJIA) closed at 18086.45 on Friday, July 17 2015, which was about a 326 point decline versus a week ago of 17760.41 on Friday, July 10 2015. The DJIA dipped below the trading range for the first time in four months. However, managed to bounce back though unconvincingly. It took several attempts before breaking above the 200 DMA. You'll notice as we go through the other charts, this is the weakest of the three indices. We should see a retest of the top trading range. 

After four consecutive positive trading days, the market took a break near 18000. The short-term stochastic (STO) indicators now show overbought conditions. Don't be surprised to see some consolidation to work off that overbought condition or a pullback. 


The S&P 500 closed at 2126.64 on Friday, July 17th 2015 versus a week ago of 2076.62 on Friday, July 10th 2015. This was a 50 point swing upward. The S&P experienced a huge drop toward the 200 DMA, and like the DJIA struggled to make a convincing V-shaped bounce like we've seen in the past. Nonetheless, it did recover and is now trading above the 50DMA.

The STO levels suggest that a period of consolidation or pullback is likely to follow. This is especially the case now that we are toward the top of the trading range. The doji (cross) at the top of chart is just another indication that we may be at a top of this leg up. 




The Nasdaq (COMPQ) closed at 5210.14 on July 17th, 2015 versus 4997.70 on Friday, July 10th . The strongest of the three indices is still the COMPQ. To our amazement, the COMPQ made a new high. Not only that, but it also closed near the top of the high of the day. Without a doubt this is positive action of the chart. Although it is overbought at the moment, further run up is possible before we see any consolidation or pullback. 

Notice that we did not even come close to testing the 200 DMA on this chart. Just incredible strength despite the weakness we see in the DJIA and the S&P. 


Etsy, Inc. (Etsy) operates a marketplace where people around the world connect, both online and offline, to make, sell and buy unique goods. My first position in the stock was when it first IPOed, we were able to get in at the great price of $16 per share. The first trading day it jumped up towards $30 and then we dumped it the second day due to weakness. 

Needless to say the stock had been on a downward spiral ever since. Our analysis taking eBay's IPO price relative to its earnings, tagged Etsy to be valued at around $12 per share. It didn't get that low, so we didn't enter the stock. However, from a technical analysis standpoint, the breakout of the trading range was the first buy signal. Then the breakout of the 50 DMA was the second. 

We would wait for a consolidation or another trading setup as we've already missed the last two opportunities. 


Disclosure: I do not have a position in ETSY.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 28 in 2015

Jul 11, 2015 -


Stock Market Highlights - Week 28

- Janet Yellen reaffirmed America's central bank intends to raise interest rates this year.
- WTI closed 7/11 at $52.74 and Crude Oil $58.73. Oil prices continues to decline.
P&G dismantling its beauty business with sales of brands 
- New GoPro $400 video camera size of an ice cube.
- Shell hauling two huge rigs in Arctic Ocean to start drilling in days.





The Dow Jones Industrial Average (DJIA) closed at 17760.41 on Friday, July 10 2015, which was about a 30 point decline versus a week ago of 17730.11 on Friday, June 26th 2015. The DJIA dipped below the trading range for the first time in four months. In fact it is now trading just above the 200 DMA. We'll want to see it break back into the trading range at the 17800 level otherwise, expect further downward prices. 

After retesting 17600, the short-term stochastic (STO) indicators bounced off STO 20 and it is now hovering over 40s. We still see that the longer term fourteen day STO is still a bit oversold. The bounce at the 200 DMA has been less then spectacular. I'd expect more downward prices unless we break the 17800 level.  



The S&P 500 closed at 2076.62 on Friday, July 10th 2015 versus a week ago of 2076.78 on Thursday, July 2nd, 2015. The change was flat. The S&P experienced a huge drop toward the 200 DMA and like the DJIA struggled to make a convincing V-shaped bounce. It appears as if it is forming a bearish flag, which would suggest further decline in prices.

The STO levels suggest that the bounce was less than strong. Even when they are showing it is not overbought, they are declining. We can see that the STO levels (five day) peaked at 50 and then declined to 30s versus a peak above 20 in the fourteen week STO indicator and a decline at 17 by the end of the week. This suggests weakness in the markets. 




The Nasdaq (COMPQ) closed at 4997.70 on Friday, July 10th versus 5009.21 on Thursday, July 2nd 2015. The strongest of the three indices is still the COMPQ. As with the action we saw last week, the trend has been broken and now we are failing to make higher highs. This is also a clear indication that the markets are beginning to turn. Unless we can see a solid bounce back into the trading range, expect lower prices. 


Fitbit, Inc. (FIT) is a makers of fitness bands. It has also been a focused long-stock in weeks prior namely due to its strong price action despite the downturn in the markets. Last week was  week of consolidation. FIT tried to work off overbought conditions and did so wonderfully. It hovered around 40-44 last week, which sets it up perfectly for a breakout above the $44 level. We doubt that this will reach STO oversold before it sees higher prices. Right now we are targeting $47.61. 

We entered into the position at $34.61 on 6/26 and it is up about 20%. 



Disclosure: I have a long position in FIT.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 27 in 2015

Jul 4, 2015 -


Stock Market Highlights - Week 27

- Greece defaults on $1.7 billion IMF payment.
- WTI closed 7/2 at $56.93 and Crude Oil $62.07. The lowest in a month.
BP Agrees to Pay $18.7 Billion to Settle Deepwater Horizon Oil Spill Claims.
- U.S. Pending Home Sales at Highest Level in Nine Years.
- Aetna to buy Humana for $37 billion in largest insurance deal.





The Dow Jones Industrial Average (DJIA) closed at 17730.11 on Thursday, July 2 2015, which was a 1.02% decline versus a week ago of 17946.68 on Friday, June 26th 2015. The DJIA is still in a trading range between 17700 and 18200. It appears to have tried to break through 17600, but quickly bounced just above the 200 DMA. Until we see some kind of sustained break, this is just another choppy market to be trading in.  

After retesting 17600, the stochastic (STO) indicators bounced off STO 20 and it is now working off oversold territory. As we had mentioned last week, "We shouldn't be surprised to see a retest of 17000 in the coming weeks". Lone behold, there was a retest. At least for now, there appears to be a decent bounce from that area. The STO indicates that the bounce may still continue. For the bulls, I'd like to see it go back to the 18010 area or 50 DMA. Otherwise, any sustained break below the 200 DMA suggests the bears are here to play.



The S&P 500 closed at 2076.78 on Thursday, July 2nd 2015 versus a week ago of 2101.49 on Friday, June 26th, 2015. This was a change of 1.2% decline. The S&P experienced a huge drop toward the 200 DMA, however stopped just short of it.

Just like with the DJIA, it appears that on the SPX, the STO levels are oversold and the small bounce was overdue. Whether or not this is sustainable or there will be further follow through remains to be seen. For the bulls, you'd like to it go back to the 50 DMA of 2104.48. Evidently any break above 2130, would be good for the bulls. We should watch for any break below the 200 DMA as an indication that the bears are here to play. 



The Nasdaq (COMPQ) closed at 5009.21 on Thursday, July 2nd 2015 versus 5080.5 on Friday, Mayz26th 2015. The strongest of the three indices is the COMPQ. It made a new high two weeks ago, however was quickly sold off. We are seeing signs of a breakdown of the trend. Unless the chart starts to trade above our trend line, expect more downward action.  

As with the SPY and the DJIA, we are seeing the oversold indicators working themselves back away from that territory. We would expect a second test of the 50 DMA. If it doesn't break through then look out below, otherwise sustained break above would be great for the bulls. 

Wells Fargo & Co. (WFC) is a company that needs no introduction. It is one of the strongest banks in the United States and has consistently outperformed its competition in almost every level. From a technical analysis standpoint, we have just retested the 50 DMA and that would've been a great entry point to go long. My stop would have been just below the 50 DMA at support of $55.5. It is not often that both the STO for the 14 day period and the 5 day period match up and when they do, typically it is a good indicator in this market to go long. Still at $56.74, this would be a good entry with a stop just below the 50 DMA. We'd expect a retest of the $58 level should the 50 DMA hold.




Disclosure: I have a long position in WFC.
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Stock Market Indices Review for Week 26 in 2015

Jun 26, 2015 -


Stock Market Highlights - Week 26

- EBay announces date of PayPal spinoff - July 17th.
- WTI closed 6/26 at $59.63 and Crude Oil $63.26.
- Nike soars after crushing earnings forecast at $0.98/share vs $0.83/share
- Personal consumption expenditures rose 0.9% in May.
- Next Tuesday is the deadline for the Greek government to repay the IMF 1.5B euros.



The Dow Jones Industrial Average (DJIA) closed at 17,946.68 on Friday, June 26th 2015. After failed attempts to break through the 18,300+ barrier via an ascending triangle trading pattern, the DJIA is now in a trade range and continues to bounce between 17,700 and 18,200. Until we can see a clear break either to the upside or the downside, this remains a stock picker's market. 

After retesting 18,200, the stochastic (STO) indicators bounced off STO 80 and it is now working off overbought territory. The STO indicates that there is still some selling off that could occur. We shouldn't be surprised to see a retest of 17,700 in the coming weeks. 


The S&P 500 closed at 2101.49 on Friday, June 26th, 2015. The S&P was posed to break out of its ascending triangle pattern. However, it stopped short around 2,130. From then on beginning in June, it peeled back into a 60 point trading range from 2070 to 2130. This is nearly similar to that of the DJIA chart above.

Just like with the DJIA, it appears that on the SPX, the STO levels have not been completely exhausted and there is still more selling to occur. For the bulls, you'd like to see a break above 2,130. The more times it tries and fails to break through, the more likely it is that the bears will take control. However, right now it looks more or less neutral. 


The Nasdaq (COMPQ) closed at 5080.5 on Friday, May 26th 2015. The strongest of the three indices is the COMPQ. It made a new high this week, however was quickly sold. Though the upward trend remains intact. Until we see a break below the 50 DMA, this is an index that is moving upward. 


As with the SPY and the DJIA, we are seeing the overbought indicators working themselves off of that via a pullback. Friday's volume was significant however it held above the 20 DMA. Look to see it retest the 50 DMA before it bounces again. 


Fitbit, Inc. (FIT) is a company that designs and manufactures health and fitness trackers and provides online dashboard and mobile apps, data analytics, motivational and social tools, personalized insights, and virtual coaching through customized fitness plans and interactive workouts. Just last week, FIT IPOed at a price of $20 per share. IT opened closer to $30 a share. After reaching $40 per share, it cooled down and appears to have pulled back to the magic Fibonacci extension (61.8%). On a pure bounce play, we entered in at $34.61, with a stop just below today's close. The target is a retest of the high. 
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