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My Stock Watchlist for January 2019

- On my Thinkorswim trading platform, I manage several watchlists, differentiating them according to the instruments it contains. There are stocks, futures, ETFs, sectors, and indices.

- My ETFs watchlists (not shown) usually keep the same symbols in time, diversified by sectors, industries, countries, commodities, both at 1X normal speed and 3X triple speed, combining long and shorts positions.

- My Indices, sectors, and futures watchlists (not shown) are also fixed, covering the main index and commodities in Wall Street and major foreign exchanges, the usual managed by all traders.

- Those that do change permanently (usually weekly) are the symbols of my stock watchlists, shown below.

- I divided them into two groups for follow-up: Main15, which I follow on a daily basis, and Active, important stocks to follow due to news topics, popularity, unusual volume in shares or options, or huge changes in price or volatility. Over time, appears there a new stock, disappear other, some ascend to Main, or vice versa, according to the importance they are acquiring, in my opinion. Keep in mind, there are watchlists (longs and shorts), not "Buy" Lists.

- That a certain stock is in these lists does NOT mean any BUY or SELL recommendation. My suggestions and ideas regarding these stocks, in which I'm long, short or neutral, I do in this blog through the "Watchlist Update" or "Stocks to Watch" posts. And mainly through Twitter or StockTwits, which are much more friendly and dynamic platforms for a chat and get feedback from traders.

- So, these are my Stock Watchlists for January 2019:

Click to enlarge.
Images were taken on December 30th, 16:58pm EST
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Elder: A Major Buy Signal on Stand-By

By kind permission of, the website of the recognized trader, Alexander Elder, I reproduce for you, literally, its article "Books and Trades #254: A major Buy signal on stand-by" of November 27th, about the actual behavior of the market and its incredible behavior in the Christmas week.

December 27, 2018

Dear Trader,

In my experience, the New High – New Low Index is the best leading indicator of the stock market. It works by tracking market leaders: the New Highs are the leaders of strength, New Lows of weakness. I track this indicator on both weekly and daily charts, in four look-back time windows. We post nightly updates of this indicator at

My research during the past decade shows that the strongest signal of NHNL is a Spike – it occurs when the weekly NHNL drops below the minus 4,000 level and then rallies about it, showing that the decline has become exhausted. Let’s take a look:

This chart shows Spike signals during the 2008 bear market. Even in the midst of a severe bear market they delivered tradable rallies, lasting several weeks to several months.

A powerful bullish divergence in 2009 delivered its buy signal at the start of a multi-year bull market. A similar signal occurred at the start of the latest bull market, in February 2016.

This chart, updated on December 26 of this year, shows the weekly NHNL well below -4,000. It may rise above that line very soon, giving us its buy signal. Those signals always occur when the market looks most scary. The big question is: will that signal be of the 2008 type (a strong countertrend rally) or of the 2009 and 2016 type (the start of a multi-year bull market). That is the question currently discussed in SpikeTrade.

I’d like to share with you this one-minute video, a holiday greeting, from

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Stock Market reading through its main indices

SP500, close 2416.62

I omit the Dow Jones in this article on the main indices of the market, because, to my liking, it is only a traditional index of Wall Street, a classic, but only useful as a daily reference ('how many points rose or fell today'), but unreliable for a serious analysis, because it is very small (only 30 companies) and limited to the industry sector, which does not reflect the entire market as the SP500 SPX does.

It is important to refer to the FED, the protagonist of the week, which raised interest rates by 0.25% to the range of 2.25-2.5%. In my opinion, an erroneous Rate Hike and also with a tone not as dovish as expected by investors. With a clear deceleration of its economy a few months ago due to effects of the Trade War among other factors, with forecasts of growth to the downside, with stagnant inflation and lower than expected, with the crude oil /CL prices falling to levels of $45, with a dangerously flat yield curve, I don't understand the reason for a Rate Hike in this moment.

Also, with discussion among its members, the FED decided to lower the rates hikes from 3 to 2 for the next year, leaving among the traders a sense of uncertainty about the path that the i-rates should follow. Is because its previous statement is still fresh, when they said that in 2019 anything could happen with the i-rate in each meeting depending on the macroeconomic data.

The fact is that Powell does not tune with the markets: every time he speaks, all indices fall. With this last Rate Hike, he tried to mark a distance from Trump (who likes a low dollar), because he says that if he have to raise more rates by 2019, he will. Close by saying that nothing will prevent the FED from doing what they think is the right thing to do. Consequences: yesterday it was rumored that Trump plans to dismiss him. And then Mnuchin denied it: a new war is beginning.

Add to this unclear panorama the already partial shut down of US government and the consequences that may have in the short term, the picture does not look very encouraging for markets already established in a bearish environment with high volatility, after this brutal week (SPX -7%), its worst December since 1930 and with no-Christmas Rally.

Within the technical analysis, the weekly SPX chart shows that the Fibonacci 23.6% retracement and especially the SMA200 average, are the next key support for this index. Note that it doesn't lose the SMA200 level since mid-2010 (rebounded in early 2016) and it would be very dangerous if it does this time. If this happens, in addition to having already lost the Ichimoku support cloud in October, the SPX (and the entire market) would be placed in a long-term bearish environment, or what everyone fears: this is, the beginning of the great correction of the stock market.

The weekly chart of the SPX since the 2009 rebound: as I explain above, levels 2350-2400 are extremely important for the future of markets in 2019.

That is a good place for a rebound, as in 2016. But, its rupture could have unsuspected consequences for the stock market.

Nasdaq Composite, close 6332.99

One of the several causes for the present collapse of the market is the performance of the Nasdaq Composite COMP, today 'officially' in a bear market after falling almost 22% since its peak in September. Curious definition of 'bear market', when for weeks we have been saying that the market is clearly on the downside without having to reach that 'magical' level of 20%. In my opinion, this bearish tune comes since November when the monthly chart of the SPX closed below its moving average SMA10.

As long as the overvalued FAANGs, considered the Nasdaq's engine (until when they will be?) are not recovered, it's difficult for the COMP to reverse. Historically the pullbacks of the Nasdaq are the most powerful on Wall Street: in the crisis of 2008 it corrected 55% in a year and a half, in the dot-com crisis it lasted almost two years with a fall of more than 75%. The other shorter and more violent was in 1980: in just one month, the index collapsed 25%. My suggestion, like I said in the previous post, is to follow Apple AAPL news, every day. How they move will define the following months of this index. Remember that their bad news pulled down the FAANG and then the Nasdaq. The sad thing is that its outlook does not look very beneficial for 2019...

Already in the technical analysis, the Nasdaq COMP shows a similar chart to the SPX although its growth has been greater since the crisis of 2009 because it has appreciated almost 6.5 times its value. Since this month, it's below the Fibonacci support at 23.6% and the Ichimoku cloud, so its next big support is its average SMA200, even at 400 points away. If it does not bounce on that level, the pullback could be historical as mentioned above, because the next support is very far.

The weekly chart of the Nasdaq COMP since the 2009 rebound: it still seems a bit far from your SMA200 average and it might not reach that level. It will depend a lot on the improvement of Apple and the FAANG, and a better macroeconomic environment, like a final agreement on the Trade War between the US and China.

Russell 2000, close 1292.09

One of the big losers of this sell-off is the small business index, the Russell2000 RUT. Recently it was the great beneficiary with the Trump's Tax Reform, but today comes in a tailspin and with few signs of recovery, and even more so with the recent Rate Hike.

With this FED rate increases, financing becomes more expensive for Russell companies that have a large part of their debt in the high yield category. It is enough to see the total collapse of the price of the high yield corporate bonds in December, followed by the ETF HYG, to understand that their companies could start to struggle in 2019. As traders, a good option is to monitor corporate bonds with investment grade, followed by the ETF LQD, which can do better than the high yield.

Click to enlarge.

Daily chart of two ETF US Bonds prices: the High Yield Corporate Bond HYG and the Investment Grade Corporate Bond LQD. Note the best performance of the latter since October, falling less than 2% against high yields that fall almost 7%. Clearly, their MACD places them even in bull territory, being an interesting niche to follow for these weeks, if the recovery of the markets is given.


Simple and brief: due to my own rules of risk management, as I write in recent posts or tweets, I am out of the market since mid-November, without any long or short-term stock in my portfolio. I still see its very premature and risky for a "buy the dip" trade, I will wait for more fundamental and technical signals. My trade is limited to day tradings purchases based on technical signals of strategies such as the ADX- Ichimoku, here explained, or to swing trades in safe haven values such as gold GLD and yen FXY.

I'm always looking for sure niches, such as the corporate bonds with investment grade mentioned above. Of course, you can not miss the stock earnings, with calls and puts purchases after results, or option straddles ATM before them. Finally, the volatility, through the VXX ETN, also in the very short-term, all with adjusted stop loss. A "war-style trading", until better days come.
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The Apocalypse of the Retail sector?

The purchase of organic giant Whole Foods WFM by Amazon AMZN at $13,700M continues to generate headlines within a week of its announcement. The immediate repercussion is the reinforcement in the fall of the Retail XTR sub-sector, which was already terrible in 2017 with news such as the closing of giant stores in the sector (Sears: 19 of its stores and 72 more on the way, JC Penney, RadioShack, Macy, among many others), Experts estimate that we are witnessing the beginning of the end of the retail as an economic model and lifestyle in the US, exported to the whole world. This good article by Francisco Jiménez for El Economista covers what I( say.

The YTD performance of the retail sector is around -18%. As a trader, you have to look for purchase opportunities in companies that survive this crisis. 

Grocery supermarkets, direct competitors, felt the blow, it is enough to see a week their falls in the price of their stocks:
Kroger KR -25%
Target TGT -13%
Costco COST -10%
WalMart WMT -5%

The new strategies, promotions and loyalty chains will be everything for these companies if they want to lose part of their market share to the technological giant, because now the shopping experience at WFM will improve with the unique Amazon online platform. For the moment I suggest entering short in the retail sector, through the XTR etf, or triple-speed RETL. This situation is for a short time, because the idea is to look for the business opportunity that appears in every fall. Putting the mentioned companies on radar, today it is premature and risky to say what their destiny will be: their news, strategies, earnings of the next months will be those that define their future and subsistence.

The table shows the PE (Price / Earnings) in the main US supermarkets. Costco's high value is worrisome, above 20.03, which is the average PE of the retail sector.

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Wild sessions last week in Wall Street

Market Pulse.

Ends a wild week in Wall Street, with the SP500 and the Nasdaq, already settled in a bearish environment, with its worst week since March, and almost all technical indicators negatives. Both started the week very optimistic (Monday + 2%) after the G20 and the news of an apparent truce in the US-China trade war, a fact that was losing strength as details of it were known, and protagonists of it, like Trump or Kudlow, began to spoke. The final thrust occurred half a week ago with the arrest of Ms. Meng Wanzhou, Huawei CFO, a police-diplomatic event that, if misused by the Chinese as it seems to be, can cause major problems for the markets. Wall Street understood it, finally closing with a worrying cumulative weekly drop of -5% in its main indices. And, technically, SPX has already lost the key SMA 200-day support, and now is facing a 'death cross' pattern between the moving averages 50 and 200-day, a clear bearish signal. It is not infallible but it must be taken into account, as well as the following points:

This 2018 SPX chart shows, in the circle, the "death cross" pattern between the moving averages of 50 and 200-day, which is produced for the first time this year. Also seems to be formed, not very clear, a bearish downtrend channel in which the SPX is bouncing. Finally, the fundamental aspects, which will be commented on in this post, will determine if this year the usual Christmas mini-rally will take place.

The Yield Curve flattening

This curve is decisive for the next weeks' market behavior. Some of its yield spreads have already been reversed this week. The main one, the 2 and 10-year is one step away from doing so. Historically, whenever this investment occurred, it marked the beginning of a recessive cycle in the US and the consequent fall of the stock markets. The 10-year T-Bond yield TNX has been falling to 2.8% levels, flattening the curve more and more, favoring the bonds and hurting the dollar and the financial sector XLF that has been sinking since October. The word recession comes more and more in the US, and signals begin to appear everywhere ...

The chart that everyone in Wall Street fears: whenever there was a recession cycle (shadow in green), the spread between the 2 and 10-year US T-Bond became negative a few months earlier. We are at that point now. This data is so important that it's possible that FED may back off its Rate Hike program for December.

Market Volatility spike

This week exceeded the psychological value of 20, its average for years and generally used as a reversal point in the markets. However, this does not happen, and the fear index VIX continues to rise, closing the week above 23. You know, when it spiked, stocks come under pressure. The smart thing to do when its above 20, approaching 30, is waiting for the VIX decline: check market fundamentals and, technically, its Bohlinger Bands and SMA200, before playing a buy order.

Chart of the "fear index" behavior this year. As you see, the popular Bohlinger Bands works fine with the VIX: as it trades, volatility rises or falls as it bounces off the upper and lower bands, that means overbought and oversold conditions. Except for some specific peaks, the whole year has moved between these bands, which makes it an efficient indicator, regardless of the tone of the market, bullish or bearish.

Another simple and good indicator for the VIX is its moving average 200-day: its signal varies rapidly from support to resistance according to the behavior of the market. Its best application is given when price touches it: since October the SMA200 is acting three times as a powerful support. Use the ETN VXX, that follows the fear index, or the UVXY, at triple speed, with this two easy indicators.

The Trade War influence

Some indicators published this week suggest that it has not been so convenient for the US, because the applied tariffs have not helped to reduce its gigantic fiscal deficit as expected, because the Chinese, in fiscal surplus, do not buy anything from US. Was a Trump's error pushing it? Assuming this, it is possible that the influence of this 'war' on the stock market's behavior diminishes, this judging by a recent Trump tweet that usually moves the market, was ignored by it.

In other months of this year, a tweet like this meaning a +1% spike of the SPX. This week: nothing...

The FAANGs pullback

The FAANG stocks, with its prices falling, continue pulling all the values of the Nasdaq, with such force that the usual effective 'buy the dip' method that is applied by many traders in each pullback no longer works, and rather the investors are taking profits as soon as they achieve them ('sell the highs'), a short-term attitude that resembles what is happening with the yield curve.

The Nasdaq has fallen more than 13% since its peak in October and at the moment there is no technical support for a rebound, so the fundamentals, that we are discussing here, will probably indicate the end of this fall.

Click to enlarge.

Bad week, once again, for the FAANGs (Since highs in early October: Facebook FB -10%, Amazon AMZN -10%, Apple AAPL -25%, Netflix NFLX -20% and Google GOOG -9%). It is insistently talked about on Wall Street that its prices are exaggeratedly overvalued and they need a clear correction like the one that has been taking place.

The big question: are prices ready now for buying the dips? The first thing that a trader usually does is see the ratio P/E, which has decreased strongly in all the FAANGs, however, I think it is not enough. I prefer to check Apple news and reports first, and now there aren't positives: Apple predicted a weaker-than-expected holiday shopping quarter in November and other reports about the slow demand for iPhones, analysts have cut the Cupertino company's net income estimates for the month of December by almost 1,000 million dollars. So, better wait some weeks before entering long here.

OPEC agreements on Crude Oil production

It seems to have found a good support at the psychological price of $50, as it comes ranging all week. Apart from the decisions of the trio USA-Russia-Arabia, those that really command the price of crude oil, this half-week we have an agreement between the OPEC and non-OPEC countries to reduce their production in 1.2mbd helps in this sense, but it's not enough even for the large existing supply, generated by the US, which continues to increase its production. In my opinion, a difficult 2019 awaits for crude oil, although Goldman Sachs forecasts /CL price hovering around $ 70 in next Q1.

The three "defensive" Sectors leading

Click to enlarge.

This comparison chart shows the performance of the nine main sectors during 2018. Show in blue sky is the SPX. As we see, by far, the three default defensive sectors (Staples XLP, Health XLV, and Utilities XLU) continue leading this bear market, signing a clear downtrend, confirm by the Sector Rotation Model, above, deeply in the red. More recession signals.
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December depends on the Trump-Xi meeting this weekend

SP500: two resistance levels to break.

This week closes with a strong rebound of all Wall Street indices, starting with the most important one, the SP500 SPX, which recovered 5% since last Friday, at its last pullback, reaching again its crucial SMA200 average, and also the lower part of the Ichimoku cloud. Attention to these two important resistances because if it exceeds them, it can be the starting point to the traditional Christmas mini-rally. It is known that December is, seasonally, the best month in the stock markets, not only in the US but globally. But... wait for Trump-Xi meeting...

Technically, an important week for the SPX facing the two resistances indicated in the circle. However, with an event as crucial as the Trump-Xi meeting, any analysis loses relative value today, until Monday.


What factors have originated this bullish week? I see several. Perhaps the main one is the change of tone in the messages of the FED, recently hawkish, encouraging more Rate Hike adducing were necessary to boost the economy, to the completely dovish image of Powell this week, now announcing that the i-rate is in levels "just below neutral", that is, 'if I raise the i-rate I could cool down the economy and if lower it, I could heat it too much.' Clear message that the Rate Hike can be stopped for a time, and the decisions will be taken exclusively as indicated by the economic indices in the short term. Even the Rate Hike that was taken for granted in December, today may seem somewhat distant.

Another key factor, as I mentioned in the previous post, is the drop in the price of Crude Oil /CL. Brutal, impressive, for almost two months, reaching below the $50 level. And regardless of the crisis it generates in the sector, this has immediate consequences for the world economy: inflation will stop, or slow down at least for a while. The dollar /DX will begin a correction to the downside, for Trump' happiness who wants it that way, and sadness for the banking sector XLF. Another key consequence of lower inflation is given in the bonds: this week bonds TLT went up, and so, the rate of the 10-year T-Bond TNX, the benchmark, reached down the psychological level of 3%. This causes that an inverted yield curve is very close, with all the consequences I mentioned in this earlier post.

Click to enlarge.

Crude Oil /CL: ranging at the $ 50 level a few days ago, awaiting decisions by the Trump-Putin-Bin Salman trio in the G20, and in a lesser degree the OPEC decisions. 

US Dollar /DX: after its powerful rise, it can change course after the dovish tone assumed by Powell and the FED. 

10-year US T-Bond TNX: closing the month at the $ 3 level, it will also be affected by the reduction in inflation. Predictions failed, including mine, which put them in ranges of $ 3.25

Finance Sector XLF: they do not like the recent dovish tone of the FED. Technically it will be difficult to get out of the lateral range in which it has been since April. Also, there is a bearish "death cross" in the short term between its SMA50 and SMA200 averages. 

December Outlook

Given the sensitivity of the market today, it is clear to everyone that the likely historical Trump-Xi meeting this weekend in Argentina, on the occasion of the G20, will be decisive for the short term of the stock markets. At the moment there are many news, opinions, rumors, and few certainties: Trump, true to his style, throwing critical tweets against China, and on the other hand, officials auguring a success in the meeting. Wall Street expects decisions of the type "we will reduce tariffs, or we will agree in some areas or topics". Any other unclear decision can lead to a red session this Monday 3 that open markets. And good news could mean a big jump in global markets and a happy Christmas for all!

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Stocks to Watch: US Crude Oil Fund $USO (/CL)


As I have usually written in this blog, I do not trade with futures, but I follow them daily because they are the basis of all my analysis. This time I will review the protagonist of the last two months, the Crude Oil /CL, which can be traded through the popular ETF USO, or at triple speed through UCO, for riskiest traders.


The fall of oil in October and November has been the deepest that has suffered since the remembered pullback of 2014. Of its annual maximum, at the beginning of October, of almost $ 77, today oscillates in levels of $ 50, that is to say, a descent of almost 35%, something very uncommon. It's because we are living a new era in the leadership of the crude. Today the price is decided by a trio of unpredictable governors like Trump, Putin, and Bin Salman. The oil production of their countries, together, represent almost 40% of the world supply, surpassing the once-powerful OPEC, and making its decisions almost unnoticed. Even less is the weight of non-OPEC, all already practically aligned with Russia and Arabia, the true leaders of OPEC.

This trio establishes the political context, leaving operational decisions in the hands of ministers and officials. And obviously, each country has different interests and visions:

- Bin Salman wants a high price in crude oil, at the expense of reducing its production, to boost its agenda to modernize its country. He still supports the North American pressure in the opposite direction.

- Trump wants a low price, so as not to boost inflation or the dollar in his country, as we discussed earlier in this blog, handling the situation both in the external and internal front. Pressing Iran, its natural enemy, with sanctions and exemptions to its consuming countries, and on the other hand directly pressing Arabia, its ally, to increase its production. Trump's support for Riad in the Khashoggi theme is not casual. And in the internal scope, Trump relies on the boom and high production of shale gas, despite its controversial extraction by fracking, to keep in line the traditional private oil companies.

- Putin and Russia, as always, put themselves in expectation of what is happening to accommodate themselves. As a producer country he wants for Russia high prices, and as a popular governor in your country, low prices. It maintains its strong alliance with the Arabs since 2017 by defining the production quotas for its own interests and also with the idea of annoying the USA.

This is presented only for information purposes: the map of OPEC member countries, increasingly less relevant in the decisions of the price of crude oil.


Little to add here. In the face of tremendous collapse, today all indicators, without exception, mark bearish signals and extreme oversold, so what is indicated is to try to deduce when this trend could end, and risk a "buy the dip" trade for profits. For this, my favorite indicators are the supports/resistances and the popular Fibonacci Retracements.

His two-year Fibonacci chart shows the price struggling with the 50% retracement level, which almost matches the psychological and key support of $50. So, we are in crucial days for next move of /CL price.

If after the G20 the crude oil price does not overcome the support of $ 50 and the Fibonacci 50%, their following support would be 61.8% of the Fibonacci and one unclear in $ 43, already quite dangerous levels.


In the short term, there may be a rebound at the $50 level mentioned. It would be the most sense because the pullback already deserves it. It will be able to oscillate some days around that level: the strength and momentum of the rebound will depend exclusively on what can be decided at the end of this month in Buenos Aires when the Trump-Putin-Bin Salman trio meet for the G20 forum.

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Alexander Elder reviews the current Market

By kind permission of, the website of the recognized trader, Alexander Elder, I reproduce for you, literally, its article "Books and Trades #252: Current market, Thanksgiving Special" of November 21st, about the actual behavior of the market and his outlook for the next months.

November 21, 2018

Dear Trader,

I haven’t written to you in a while, but felt compelled to do it today, in view of the current market situation.

There is a definite sound and smell of panic. Go to any news website, and their waves of fear hit you in the face. Don’t you think that if those writers knew how to trade, they would be making money instead of spreading emotional waves. Here’s what I recognize in the current markets:

Click here to enlarge this chart (only when you’re online)

Bull markets are defined by the pattern of higher highs and higher lows

This pattern is intact on this weekly chart of the S&P as well as the Dow (not shown).

The bottoms of severe corrections are usually retested on lower volume.

The latest decline was just such a correction. The Nasdaq (not shown) had actually nicked its October low before recoiling and rallying. This is very similar to what happened in February 2016, when only the Dow among major indexes had nicked its previous low.

The second bottom of a correction is almost always confirmed by multiple divergences.

The inset in the center of the chart shows a bullish divergence of the New High – New Low Index. The dark inset on the right shows the weakening of the Fear Index.

This bull market is definitely getting older (aren’t we all) and more ragged. At some point it will top out, creating great shorting opportunities, but that time is very unlikely to be now.

To see what goes on day to day, I recommend joining, where I post several times each week. Take a Trial to see how much you can learn. Another invitation: join my private webinars at to see live market analysis and receive answers to your questions.

Best wishes,

A Elder

November 28, 2018 (Update)

Dear Trader,

Here’s the weekly chart of the S&P I sent you last week, followed by today’s daily chart (drawn around 2pm).

Click here to enlarge this chart (only when you’re online)

The headline of my post in SpikeTrade on Monday was “Had the corrective move been completed?” I presented evidence for both sides, answered affirmatively, and shared my long purchases. The ensuing rally went into high gear today, crossing above the value zone, gathering steam.

Don’t you wish you were receiving daily SpikeTrade posts.

The reasons for this reminder: a) in tonight’s webinar we’ll focus on stock selection and b) our Thanksgiving special will end on Frida

I will aim to write to you again before the end of the year,

Best wishes,

A Elder

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Watchlist Update: Market Pulse, Sectors, AAPL, NVDA

Market Pulse.

The stock market is threatening to finally enter a bearish stage, judging by the movement of SPX that, technically, fell again under the SMA200 and struggles to overcome it. We mentioned that its monthly chart closing under the SMA10 was a bad sign, and now the usual Christmas mini-rally is in danger of not being made. Some notes:

- The Apple AAPL 5% correction is pulling down the Nasdaq and the entire technology sector XLK, and this time seems it will continue in the short term because there are some fundamental aspects.

- The Trade War makes Wall Street move according to its rumors, news and subsequent denials. Now, it seems that Trump and Xi could meet on November 30 at the G20 Summit.

- The VIX volatility reached the psychological value of 20, after many indecisive sessions.

- The dollar remains very strong against all its peers, but today's inflation flat data can generate more pressure to the FED about a Rate Hike in December.

- On the other hand, the apparent tranquility of the 10-year T-Bond yield TNX at the 3.15% level and the collapse in the price of oil /CL (12th. straight sessions of declines, and today falling 6%), can help the market in the mid-term.

Let's see some technical charts and ideas for stocks of my November Watchlist.

Comparison between sectors

Click to enlarge.

This comparison chart shows the performance of the nine main sectors in 2018. Shadow in blue sky is the SPX, the benchmark. As we see, since early October, the default three defensive sectors (Staples XLP, Health XLV and Utilities XLU) still leading the market, signing a clear downtrend, confirm by the Sector Rotation Model above, in red.

Apple Inc. AAPL, $192.595

Apple today at a crucial moment when trying to bounce in its SMA200 after 6 months over this. A "buy the dip" trade or wait for the rebound: that's the dilemma. Meanwhile, the bear signals continue strong in the MACD, but now an excessive overbought in its Stochastic can mean a rebound. Good time to trade options or spreads as implied volatility is below historical data. AAPL, with their fundamental problems as the sale of their iphones and excessive buybacks, is likely a short in the short-term.

Nvdia Corp. NVDA, $203.06

NVDA is one of my favorite stock, only for speculate, with a day-trade. Always its good volume and volatility above 60%, guarantees good daily movements, but requires constant vigilance. This week several entry points (that usually happens in the first half-hour of the session) were given using the ADX-Ichimoku strategy reviewed in a previous post. Using levels of support or resistance from the previous day and verifying the required price and chart conditions (breakout, above/below the cloud, ADX>20 and Tenkan exit), fast profits can be obtained. The ADX-Ichimoku, as all, not infallible, but good strategy in days of choppy markets. Remember in Thrusday, Nvdia reports Q3 earnings, that likely will define its route in the mid-term.

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Trader Notes: A Second Line of Technical Indicators

Yes ! There are many reliable indicators as MACD and RSI !

The oscillators MACD and RSI, together with the moving averages, form the standard trifecta of a trader for the technical analysis. Because of its popularity, efficiency and simplicity, everyone, without exception, knows and uses them. So I'm not going to detail its benefits, only give some additional notes about them.

The MACD (Moving Average Convergence/Divergence) combines trend with momentum (or acceleration) of the price, and its signals are simple, we know: bull and bear crossovers, line plot above zero means trend up, plot below zero means trend down, rising histogram means buyers increasing, falling histogram means sellers increasing.

My personal contribution: take care of the divergence of MACD-histogram with price in daily charts, because they had frequent errors if it is not used correctly. For this reason, the recognized trader Alexander Elder recommends using the EMA13 line as a confirmatory signal, verifying that its slope points in the direction of the divergence, bull or bear. In my trading, sometimes I add a second confirmation with the same MACD but in the weekly chart: verify if a MACD crossover matched with the divergence of the daily chart.

The RSI (Relative Strength Index) is also an oscillator but it gives different information than the MACD. It qualifies the situation of the stock as overbought or oversold according to the value of the indicator on a scale of 1-100. Its crossover at levels 30 and 70 are used by traders as a probable reversal. You can also used its divergence with price (I do not usually do it), but never as an indicator of the trend of a stock.

Technical indicators there are hundreds, to taste of each trader and his trading style. In my case, after having tried many of them during my years of trading, I manage a "second line" of technical indicators, which serve only as a complement to use in conjunction with the main ones, only to reinforce any bull or bear signal. Usually, a good technical analysis can be done with 2 or 3 indicators, its enough. Remember, there are just indicators, not a strategy. There's no infallible or magic indicator: all of them give sometimes false signals. Select and use your favorites indicators in a multiple timeframes (making the strategic decision on the weekly chart and the tactical choices on the daily chart), in conjunction with fundamental analysis for the best trade.

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Is necessary read the MACD with a confirmatory study as EMA13 (black line). This avoid false divergence signals as happen this year in Novavax NVAX chart during early July.

TTM Squeeze: a mix between Bohlinger and Keltner

Previously I should refer to two other popular indicators, which are quite similar but give different readings. Both plotlines as an envelope around the price, based on stock volatility. The Keltner Channels use a smooth exponential moving average as mid-line and the Average True Range as offset, while the Bohlinger Bands uses a simple moving average and offset with the standard deviation, which varies proportionally with the volatility. Both are useful as trend-following indicators, and its a good idea to use them with a momentum oscillator as Stochastic or RSI, and the ADX to identify trading ranges.

In summary, the upper and lower bands of the Bohlinger represents overbought and oversold levels. The BB works best in ranging than trending behavior of a stock. Take note that touch a band isn't necessary a sign of reversal, but probably a low-risk entry point. Keltner had different readings depending on stock behavior: if it's trending, a close above the upper is a bullish signal, while below the band is considered a bearish one. If it's ranging, envelope lines can be interpreted as overbought and oversold levels.

An indicator relates both: John Carter's TTM Squeeze. The idea is very logical: when volatility increases, the Bohlinger Bands are widening and enveloping the Keltner Channel, while when the market is consolidating (period of indecision) the Bohlinger are inside the Keltner and the market is squeezing, preparing for a breakout to come.

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As expected, different indicators give different entry-exit points. Compare several indicators, and define your risk-reward before your trade. The location of the stop loss is key to this.

Carter designed the use of dots across the zero line: red dots indicate that squeeze is on, so a consolidation breakout is coming. Green dots represent squeeze off, so the market is trending. The trend momentum oscillator histogram is shown by colors: in my configuration, I use green for trend up and grey when it is decreasing, and red when the trend is down and grey when it's decreasing.

When the indicator is on (green) and the momentum oscillator is also green, it is considered a buy signal for a trend-trader. When the indicator is on (green) and the histogram is red, it is considered a sell signal. Both signals are supposed to be correct until two grey bars in a row appear. Try this interesting indicator in your favorite trading platform.

On Balance Volume (OBV), a different one

Less popular than those described above, the OBV is a trend indicator that measures the pressures of buying and selling, adding/subtracting volume on up/down days. Is simply a running total of up and down volume: when the security closes higher than the previous close, all of the day's volume is considered up-volume, and when close lower than the previous day, all of the day's volume is considered down-volume.

As it uses volume in its calculations, and volume, in theory, precedes price, the OBV have truly good advantages versus others:
- A rising OBV reflects positive volume that can lead to higher prices.
- As rising volume confirms an up or downtrend, if price movement precedes OBV, then it is consider a "non-confirm" movement.
- So, OBV breakouts normally precede price breakouts.
- An OBV ranging is an undecided trend: better hold until the trend changes.
- OBV are also useful for anticipate trend reversals, using its bullish/bearish divergences with price.
- Be careful when volume spikes: it usually throws off the indicator at that point.

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OBV divergences are infrequently but powerful signals. Always use in conjunction with another indicators, as an oscillator. This ADP chart show three of OBV features.
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Weekly Outlook for the SP500

SP500: Some keys for the week.

In the fundamental aspects, there are important events this week that will determine the path of the SPX, highlighting two: one, the US Midterm elections, which will surely end with the Senate in the hands of the Republicans, and the Congress probably with the Democrats. Any other result would give the market strong volatility. The other, on Thursday there will be the FED Announcement, where, although no Rate Hike is expected, traders' eyes are in the report with the perspectives of the Central Bank for 2019. In the background, like every week since April, the catalyst of always: the news of the advances (or setbacks) in the Trade War with China. Any news here moves exaggeratedly the SPX and the entire market. Thus, last Friday, Trump announced that he was close to an agreement with China (SPX immediately soaring 1%), and then Larry Kudlow expressed prudence even on the subject (SPX abrupt sinking -1%). All in a few hours of the session.

To take into account: the period from November to January is historically the most bull on Wall Street.

I suggest exit from all long-term positions

Within the technical aspect, despite its good last week, finally, the SPX index closed October below its 10-month simple moving average, the SMA10. A worrisome signal as, it was already commented in this previous post, is an indicator used by "heavy" banks and financiers to make long-term decisions. This month of November, it is advisable to follow the market with caution, ideally, as I said, by exiting long-term positions. In my case, I already did it, and I will only operate with very short-term trades with tight stop losses.

Its daily chart sees a recovery towards its SMA200, in a new attempt to overcome it and give the green light to the traditional Christmas mini-rally. It has already been commented many times that the period from November to January is, historically, the most bull on Wall Street, and if the SMA200 is not overcome, it is very difficult to wait for this year to happen. You can also see an interesting bull crossover in the MACD but with the plot even in negative territory.

SPX is heading towards its SMA200 in a new attempt to overcome it and start the mini Christmas rally.

10-year US T-Bonds: follow $TNX chart

The TNX chart will be the most important that I will follow this week. Remember that the recent "Red October" began due to its fierce increase, reaching levels of 3.25% that it had not since 2013.

Last week it began another solid uptrend, and we already know how sensitive Wall Street is to this rises, as well as to inflation, both causing to cool a healthy economy. Already in this previous post I commented that finished the sell-off this yield could continue its rise to the level 3.5% to give more steep to the currently very flat yield curve, not consistent with a growing economy like the North American.

TNX approaching again at 3.25%, the level that burst Red October. Go with caution if it get over this week. On my radar.

Crude Oil, /CL: pullback ends?

In an environment where there are positive and negative aspects for the market, the Crude Oil will take importance these weeks like the faithful of the balance, which probably mark the way the SPX will follow.

The recent and strong pullback of the price of Crude Oil suits very well for the market, since it is a factor that helps the inflation index not increase excessively. Throughout the year /CL price has been rising to over $75 level and although it was expected to increase further with the problems of Iran, finally the necessary technical correction has brought its price to $63, below its important SMA200. The interesting thing is that this pullback could be ending soon because the price is completely oversold and can turn around.

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Crude Oil in October below Ichimoku Cloud and last week below its key SMA200, breaking $64 level. Many bearish signals. In favor: hugely oversold.
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My Stock Watchlist for November- December 2018

On my Thinkorswim trading platform, I manage several watchlists, differentiating them according to the instruments it contains. There are stocks, futures, ETFs, sectors, and indices.

The ETFs watchlists usually keep the same symbols in time, having sectors, countries, commodities, both at 1X normal speed and 3X triple speed. Indices, sectors, and futures are also fixed, covering the main index and commodities in Wall Street and major foreign exchanges, the usual managed by all traders.

Those that change permanently (usually weekly) are the symbols of the stock watchlists.

I divided them into two groups for follow-up: Main, which I follow on a daily basis, and Active, important stocks to follow due to news topics, popularity, unusual volume in shares or options, huge changes in price or volatility. Over time, appears a new, disappear other, some ascend to Main, or vice versa, according to the importance they are acquiring, in my opinion.

That a certain stock is in these lists does NOT mean any BUY or SELL recommendation. My suggestions and ideas regarding these stocks, in which I'm long, short or neutral, I do in this blog through the "Watchlist Update" or "Stocks to Watch" posts. And mainly through Twitter or StockTwits, which are much more friendly and dynamic platforms for these cases. I enjoy getting feedback from traders there, or in my GMail. Please feel free to contact me.

Finally, review my previous post "Spirit of this Blog", a kind of declaration of principles of it.

November Stock Watchlist:

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Images were taken in November 3th, 11:48 EST

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The indicator that Wall Street will follow this week

The important SMA10.

The SP500 index, the most representative and important of the NYSE, has been sinking more than 9% this October, losing near all YTD gains. The Nasdaq is also a loser, having its worst month since 2008. Some ideas and reasons for this sell-off, I outlined in this previous post. Now, this week, Wall Street' trader's eyes will be on a specific technical indicator. It is the 10-month simple moving average or "SMA10".

The 10-month SMA indicator is equivalent to the well-known and widely used 200-day SMA, given that 10 months of sessions equals almost 200 trading days. The great advantage of the monthly is that it gives a cleaner signal and reading, free of so many false signals of breakouts, pullbacks, and whipsaws that are usually presented in a daily candle chart. It is not infallible, but the 10-month SMA helps to filter out all the 'noise'. It's well known that banks and financiers use it and make their investments in the stock market based on their signal.

This indicator is for be used in indices trending up or downward, and its strategy is quite simple, almost elementary: buy (or hold your position) when the candle closes above it. Each monthly candle of the chart begins with the opening of the first day of the month and is completed with the closing of the last monthly session, in this case this Wednesday 31. The key is to know if the current sell-off continues and the SPX closes below its SMA10 at the end of that day. Only 3 sessions remain and today SPX is near 100 points below it (2,658.69 vs 2,754.07).

If it happens, it is almost certain (there are no fixed rules in the trading world, only historical data) that the market will enter a correction, instability phase, so it's better to stay out of it. Exit all long-term positions, until price cross it upwards. See in the chat below the accurate sign that this indicator gave during the last crisis of 2001 and 2008. It avoids many headaches and shattered portfolios applying this very simple strategy.

It is not an infallible index (there is none) but it is reliable enough to avoid catastrophes in a portfolio. The EMA10 pointed out the two last major Wall Street crises and the best moment of return.

As a corollary, say that this indicator is applicable if you want to go long in any stock or etf. It is enough to see the entry/exit signal that it gives to proceed.

Finally, an alternative idea for trading in November (assuming the SPX below the SMA10), is through the volatility, which moves in opposition to it, doing it through the VXX ETN, or with the triple speed 3X UVXY, for lovers of higher risk-reward. My usual strategy this volatile days is first buy hedge through VXX calls, waiting for the rise in volatility before the sell-off arrives, and at that moment finance the purchase of SPY puts.

The current crisis in emerging markets was also signaled by the indicator. Since May, its EEM index closed the month below its SMA10.

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