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Showing posts from November, 2018

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

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Background:
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.



Fundamentals:
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 th…

Alexander Elder reviews the current Market

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By kind permission of Elder.com, 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:




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 corre…

Watchlist Update: Market Pulse, Sectors, AAPL, NVDA

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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 apparen…

A Second Line of Technical Indicators

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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, the plot below zero means trend down, a rising histogram means buyers in control increasing momentum, a falling histogram means sellers in control increasing momentum. And we get a trade signal (that needs confirmation) only when the crossover is bullish and the histogram rising. Or a bearish crossover with the histogram falling. Avoid the two other combinations.

My personal contribution: take care o…

Weekly Outlook for the SP500

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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.





I suggest e…

My Stock Watchlist for November- December 2018

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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 …