As of the close of Tuesday, August 15, 2023, the PerfectStorm scan of high-volume options found three breakdowns candidates.
They are :
ZM:
NLY:
and SNOW:
To find a good way to start trading breakouts and breakdown, contact me.
Two more breakouts today at the close.
June 12, 2023 by
As of the close today, Monday, June 12, 2023, my scan of high volume optional stocks found two additional breakout candidates.
ROST:
and WMT:
Update on XLY, XLP vs SPY
January 13, 2023 by
What a difference a few days make.
Prices as of the close on Thursday, January 12, 2023.
Early Warning Indicator
June 4, 2022 by
This ‘Shoeshine Boy’ Spots Market Tops |
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By Pete Carmasino, chief market strategist, Chaikin Analytics
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| Just before the 1929 market crash, John F. Kennedy’s father stopped to get his shoes cleaned…But the enthusiastic, young shoeshine boy wanted to offer something more – stock tips.That’s all Joe Kennedy needed to hear. In his mind, nothing could indicate a market top better than unsolicited stock advice from a shoeshine boy.The legend says Joe immediately got out of the market. Then, he “shorted” it and got filthy rich.True or not, this story is an investor favorite for good reason. It sends an important warning about market manias.Put simply… a top is near when the proverbial “shoeshine boys” get in on the action.That’s important to remember right now…You see, whether it was intended or not, global investing giant VanEck created a modern-day shoeshine boy investment. And as you’ll see, it called the most recent market top.Let’s take a closer look… |
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| The VanEck Social Sentiment Fund (BUZZ) launched in March 2021.The idea behind the exchange-traded fund (“ETF”) is easy to understand. It invests in 75 mid- to large-cap stocks based on the amount of hype they’re getting on social media. And it’s based on the Buzz NextGen AI U.S. Sentiment Leaders Index…To be considered for the index, companies need a market cap of at least $5 billion. They also need consistent and diverse mentions on social media over the previous year.From there, any stocks that meet the criteria are ranked. The top 75 go into the index.The idea is to use crowd sentiment to find good companies. Essentially, it becomes a momentum index.In short, the index and related ETF are the collective shoeshine boy…The index’s creators use artificial-intelligence (“AI”) tools to track websites like Twitter and StockTwits. These AI bots decipher between good and bad phrases relating to stocks.But it’s an interesting choice, to say the least…On Twitter, 50% of users don’t have a college degree. I’m willing to bet that a much higher percentage don’t even know investing basics. Plus, 92% of posts come from 10% of users.So there you go… That’s your BUZZ Investment Committee.It’s no surprise that the ETF is effectively a “meme stock” fund. Its largest initial holdings included Twitter (TWTR), DraftKings (DKNG), Meta Platforms (FB), and Tesla (TSLA).Investors couldn’t get enough when BUZZ launched in March 2021. Its assets quickly skyrocketed to more than $500 million.But the good times didn’t last long… Today, the ETF only boasts about $75 million in assets.And more importantly, this proverbial shoeshine boy called the latest market top. Look at how BUZZ sputtered out shortly before the broad market took a nose dive… |
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| The ETF is down roughly 48% from its November 2021 peak. And now, the S&P 500 Index is down around 16% from its all-time high back in January.That tells us the shoeshine boy indicator worked yet again.The moral of the story is simple…A bear market was all but guaranteed when BUZZ launched. But now, this tool directly measures the proverbial shoeshine boy for us.As a result, you’ll want to keep an eye on it.Good investing,Pete Carmasino
The above was written on May 17, 2022, in The Chaikin Analytics Power Feed The following is the current status of BUZZ vs the SPY. It is looking like good news. The momentum ratio is now favorable to BUZZ versus SPY, and BUZZ is on an upswing.
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SHOPify in news
May 9, 2022 by
SHOP has been in the news lately regarding the acquisition of a logistic company.
Prices are as of the close of Friday, May 6, 2022.
As in all previous illustrations, Green lines are periods of LONG, Red lines show periods of SHORT, and Blue lines are periods of NO POSITION.
The weekly is the dominant signal. So in this example, the only possible daily position in the year 2022 is SHORT.
AbbVie Earnings coming next week.
April 23, 2022 by
“Wall Street expects a year-over-year increase in earnings on higher revenues when AbbVie (ABBV) reports results for the quarter ended March 2022. While this widely-known consensus outlook is important in gauging the company’s earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 29. On the other hand, if they miss, the stock may move lower.” Zacks Equity Research, April 22, 2022
The following pictures of ABBV Daily and Weekly show that some expect lower results than projected. Prices are as of the close of Friday, April 22, 2022.
The weekly chart is the dominant position. The green line indicates BUY. The RED line indicates SELL, and the BLUE line indicates CLOSE position.
As in all past posts, When and only when the Weekly indicates BUY, then if the daily is also Green, the position should be long. The BLUE line indicates CLOSE position.
SHW revisited. Swing Trading at its best.
March 13, 2022 by
As many of my readers know, I have been following Sherwin Williams for many years. It qualifies in most metrics as a solid company financially and has been an outstanding holding in many portfolios.
The caveat is that if you have the ability to adjust your potfolio when certain stocks are not gaining at price but declining, then SHW has been in and out of your portfolio many times in the past few years.
Using the weekly price action as the guide and the daily price action as your trigger, the following charts are a good example of good timing in SHW.
As usual, green lines represent the time of being long on the weekly, if only the daily agrees.
Long-only from April of 2020 until the end of January 2021. Then long-only from April of 2021 until Mid January 2022. Short only from February 11, 2022.
The daily charts are the actual trade trigger.
This is an example of how swing trading is supposed to work. Prices are as of the close on Friday, March 11, 2022.
Back to the Beginning
July 12, 2021 by
In 2010 when I started this post, I recommended that one of the better methods of selecting equities was to find those sectors that were showing high relative strength with positive momentum. Selecting the highest relative strength sector with positive momentum should outperform.
I chose four sectors as illustrations.
XLE: Energy (Green)
XLY: Consumer Discretionary (Red)
XLU: Utilities (Cyan)
XTN: Transportation (Yellow)
The following chart as of the close of Friday, July 9, 2021, shows the current relative strength of these four sectors.
Relative Strength
January 12, 2021 by
In the many past posts, I have recommended that to be successful in swing trading, one has to be aware of the individual securities relative strength as it compares to some index of its peers.
The following chart is an example of OIH which is the oil VanEck oil services ETF. I have compared this ETF to SPY, which represents the Standard & Poors 500 index.
The prices are as of the close yesterday, January 12, 2021.
The rules are very simple, and the action indicated by the up and down arrows reflects the result of following the rules.
- Buy when the target security is stronger, on a relative strength basis than the index.
- Buy ONLY when the target is stronger, has positive momentum, and the index is also going up.
- Close the position when any condition is violated. Shown by blue vertical lines.
- The rules apply to shorting when the actions are the opposite of the buy rules.
Market Timing Signal
December 7, 2020 by
Most investors find that timing the market, which is trying to determine whether to be invested or not, is not something that is within reach.
My experience tells me that not only is it possible, but it is also very important in these volatile times.
The ‘market’ can be illustrated by looking at the performance of the S& P 500 index, which comprises a good section of the United States economy.
The above graph shows the S&P 500 index, ETF: SPY, as of the close on Friday, December 4, 2020. It shows that there was a significant decline beginning at the end of February 2020 with a nice recovery starting in April 2020. It would have been ideal to find some way of getting out of the way of the decline and getting on the right path in April.
There is that kind of early, or at least not so late way, of doing just that!
In the past, which is certainly no predictor of future behavior, the movement of the U.S. Treasury note and bond market, has behaved in an almost opposite manner to the equity market. The avoidance of equity risk has shifted the money flow into the safe haven of U.S. Treasuries and vice versa. In the past then, the equity market has been negatively correlated to the Treasury market. So, when equities are getting strong, Treasuries should be getting weaker, etc.
I have chosen an ETF which is a good indicator of the U.S Treasury market: EDV, the Vanguard Extended Duration Treasury ETF.
Prices reflect the close of December 4, 2020.
The following chart shows the relationship between the price movement of SPY and EDV during the period of February 2020t to the close of Friday, December 4, 2020.
SPY is represented by the green line and EDV is represented by the red line in section three of the graph.
The next line shows the relative strength of SPY versus EDV. Green shows that SPY is stronger, Red shows that it is weaker.
The same is true on the bottom part of the illustration. The cross indicator on the individual ETFs show positive or negative momentum of the individual ETF.
The answer then is that one could make a market timing decision by watching the relative strength between equities (SPY) and Treasuries (EDV) and act accordingly. Purchase the equity market when it is in a positive relative strength to the Treasury market, which is represented by the Green vertical lines. Stay on the sidelines when it appears that the Treasury market is stronger than the equity market, the Red lines.