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Factor Update, May 18, 2018

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Factor Update, May 13, 2018

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Factor Alert, May 10, 2018 — U.S. equities market

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Factor Update, May 6, 2018

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Factor Update, March 18, 2018

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Factor Update, March 11, 2018

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Factor Alert, March 9, 2018 — Bullish stock market breakout

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The chart case for a bear market in U.S. equities

 

All major U.S. stock indexes are forming potential tops

A case can be made based on classical charting principles that the current decline in the U.S. equity markets is just phase one of a larger price decline -- in other words, that U.S. stocks are in a bear market. Consider the following. Factor believes that the most significant price of the day is the closing price and the most signficant price of the week is Friday's closing price. The weekly closing price chart of the DJIA displays a possible H&S top pattern. This top has not yet been completed, but a Friday close below 15,800 would do so. 2.14_DJI_Wc Read More

The U.S. stock indexes are NOT making H&S tops!!!

Xmas tree H&S  

Note: The post herein was absolutely wrong on the analysis of the H&S top in stock indexes. Guess what -- traders are wrong from time to time. I make bold calls and some are right and some are wrong. At the end of the day, price is king and nothing else matters. Members of the Factor research service know that I over-rode the analysis herein on January 6, cautioning that the stock market had deep internal trouble.

Classical charting principles have rules. The Head and Shoulders is a classical chart configuration. The apparent and well-advertised H&S top in the U.S. stock indexes do not meet the rules.

Perma-bears, a H&S top is not sitting for you under the Xmas tree!

Sorry to all of you stock market doomsayers, but labeling the U.S. stock index charts as H&S tops just does not work. Volume is an important criteria upon which to judge the validity of the H&S patterns. Richard W. Schabacker (Technical Analysis and Stock Market Profits), and later, John Magee and Robert Edwards (Technical Analysis of Stock Market Trends), are considered the pioneers in classical charting principles. According to the founders of classical charting, as a rule volume should be greatest in the left shoulder or head and lightest in the right shoulder in order to validate a H&S pattern. As the charts of the Dow Jones Composite, Dow Industrials and S&P 500 show below, the largest slug of volume has been in the right shoulder. This is NOT a sign of a valid H&S pattern, thus the interpretation of a H&S top in the U.S. stock index charts is not likely to be correct. 12.23_DJIA Read More

Some shorter-term charts that are ready to move

Nasdaq ($NQ_F, $QQQ), S&Ps ($SPX, $ES_F), Apple ($APPL), NYSE Composite Index ($NYA) and Nike ($NKE) appear ready for a strong advances

Hey all you stock market bears, get prepared to fade these breakouts!

 

4.23_AAPL 4.23_ES_D 4.23_NKE 4.23_NYA 4.23_QQQ

Analyses of these charts — and many others — are routinely provided to members of the Factor Email Service (see upper menu bar)

 

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