Monthly Archives: May 2015

TBT Repeats 2013 Bullish Patterns

The ProShares UltraShort 20+ Year Treasury (TBT) fund is testing the rim line of a cup and handle formation that formed on the weekly chart over the last seven months. A successful break projects a pattern price target into the $57.50 to $58.50 area, which is the former bottom end of a consolidation channel that formed in 2012 and 2013. In May of 2013, the fund bounced off channel support and continued higher, breaking above the channel top and rallying to a perfect pattern price projection. The current technical status of the TBT is very similar to the one in 2013 before the rally: price is breaking or preparing to break out of a consolidation pattern, and volume and money are improving. Remember, however, that this week’s candle has three more days left to mature.

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Wal-Mart Back Down to Key Technical Level

Wal-Mart (WMT) shares have been trading in a zone for the last month between their 2014 channel top and the 40 week (200 day) average.

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Shares of the stock are falling in the pre-market by about 2% today, after the company reported lower-than-expected U.S. same-store sales growth, taking them back down to the channel top.

US Dollar at Fibonacci Intersection in Time and Price

The US dollar is at an intersection of time and price on two timeframes. The weekly chart shows the movement of the US Dollar Index ($USD) going back to its low in 2008. It marked two important highs in 2009 and 2010, and then after several years of pullbacks and consolidation, it broke through the $89.00 level late last year and rallied to new highs. The index is approaching a 144 week Fibonacci time zone as measured off the April 2008 low.

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On the daily timeframe, the PowerShares US Dollar Index Bullish Fund (UUP) formed a triangle top with static horizontal resistance just below the 50 day moving average in the $25.50 area. That level was broken last month and the fund price saw a perfect target projection move to the $24.50 area, which is also a 38% retracement of the 2014 low and the 2015 high.

Reader Request: Michael Kors

Michael Kors (KORS) shares have retraced half of their historical range, tracking below their 50 day moving average since about this time last year. They are currently at the 50% Fibonacci retracement level of their IPO price in 2012 and their 2014 all-time high.

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The stock is in a downtrend, that’s pretty clear, but while I wouldn’t approach it from the long side until it completed a period of consolidation, I’m equally as hesitant to jump on board the downtrend at this potential technical inflection point. Next chart, please.

Reader Request: Wal-Mart Chart

A reader asked if I would take a look at the Walmart chart.

Shares of Wal-Mart (WMT) traded in a horizontal channel for most of 2014 before breaking above channel resistance in November and rallying into year end. They reversed course quickly, however this year, and are back retesting the resistance-turned-support level.

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On the daily chart, the RSI is moving above its centerline and the MacD has made a bullish crossover, reflecting positive price momentum, and Chaikin money flow has moved above its 21 period average and is tracking towards its centerline, suggesting improving positive money flow.

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Currently, Wal-Mart is in a neutral zone, where the parameters of a breakout or breakdown are defined by a close above the major moving averages or below the recent lows.

The Market is Amazing and Nobody’s Happy: Kierkegaard, Louis CK, and the Stock Indices

The major market indices have made or are near new highs and no one is happy, and that’s because we want a correction, not a rally.
The philosopher, Kierkegaard said that dread or angst is a desire for what one fears. Louis C.K. knows this, and though he understands happiness is within the moment, he does not live there. He is thinking ahead, all the time, and that is where dread resides, outside of the moment and just around the corner. That’s what traders and money managers do, think around the corner. They are anxious by nature, too, although they are skilled at hiding it, otherwise they would be selling small arms and seed. Sometimes, however, a little of the ever present, rarely expelled market angst seeps out like a gas leak into the media and onto the floor of the exchange, you can see the noxious effect in Bob Pisani’s eyes. My broker friend, Phil told me the other day that he senses a disturbance in the force.
It may be the lack of volume or a fundamental picture that is improving but hasn’t improved enough, or simply trader fatigue. I don’t know. This is what angst does, it fatigues you, sets you to ramble mode, soon you’re looking at charts and spreadsheets and wondering what Louis would do. Somebody needs to monetize mobile, and quick.

(Disclaimer: This column was meant to be humorous, with a small underlying measure of insightfulness. It does not reflect my base feeling of optimism about the market or my positive outlook on life. So to all my friends and family, stop texting me, everything is fine.)

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Linkedin: Fibonacci Frenzy

Linkedin (LNKD) shares are at a major Fibonacci intersection of time and price.
The chart is crowded, so let’s go through it one indicator at a time. Moving from left to right, the first set of horizontal retracement levels (blue) are measured off the October 2011 low and the 2015 high, and the 38% retracement level is at $190.70, which is also, a 62% retracement (red) of the 2014 low and the 2015 high. In addition, two sets of Fibonacci timelines, the first measured off the 2013 high (green) and the second, off the 2014 low (blue) are currently overlapping in time.
It may be the right time and place for consolidation.

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Pressure Building in Coca Cola

Shares of Coca Cola (KO) have been consolidating and contracting for the last seven months in a large triangle pattern. Over the last two months, that process has accelerated within a smaller interior triangle, which contains the 20, 50, and 200 day moving averages. The stock price is currently testing the intersection of triangle resistance, and Bollinger bandwidth suggests a successful breakout could be volatile.

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Shake Shack All Shook-Up

Shares of Shake Shack (SHAK) have been shaken up pretty good so far this month. The 60 minute chart shows large percentage moves over one and two day periods that would test the internal fortitude of the most committed investor, or the skills of the most nimble trader. The generalized result of all this movement is reflected by the trajectory of the linear reversion line (declining black line), which simply put, is the best-fit-straight line of price during the period.
I don’t digest fast food well, so I don’t eat it, and I don’t favor this type of price action, so I don’t trade it.

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