Written by A.J. Brown

Broad Market Analysis - July 14, 2017

Hey team. This is AJ with Trading Trainer on the afternoon of Sunday, July 16th, with your Trading Trainer weekend edition of your daily insights. What we’re going to do here is take a look at the broad market by taking a look at representative indexes of our watch list namely the Dow Jones Industrial Average, the NASDAQ composite index and the S&P 500 index. We’re also going to take a look at the New York Stock Exchange composite index and the VIX volatility index. Because it is the weekend we’re going to look at both daily and weekly charts but before looking at any charts team, we’re actually going to log into the Trading Trainer learning community web portal by going to login.trainingtrader.com.

Of course, once we’ve logged into the learning community web portal, we’re going to take you right to today’s daily insights tab and further to the recommendations sub tab. Team, take a look at the recommendations we have for tomorrow, which is Monday, July 17’s trading session. Slight changes in these recommendations could have major impact on your trading. You’re also going to find here a link to our audio commentary. This is the audio where I take you by the hand through today’s daily insights tab and its sub tabs. Go ahead and click on that link. An audio is going to start playing automagically in the background in another browser tab or another browser window depending on how you have your browser configured.

Go ahead and listen to the audio the first time you do click through today’s daily insights tab and its sub tab. It’ll make sure you hit all the high points. You can always drill down deeper on your own after the audio is over. Team, when you listen to the audio commentary, please pay special attention to the opening and closing comments. In the meantime, for this particular broad market analysis of this Charts of Interest video series, let’s go right to index stats sub tab.

Our trading bias does remain bullish. Our industrials shown by the Dow Jones Industrial Average gained 0.39% this past Friday on light, below average New York Stock Exchange volume. For this past week it gained 1.04% on light below average New York Stock Exchange weekly volume. Our tech stocks shown by the NASDAQ composite index gained 0.61% this past Friday on light, below average NASDAQ exchange volume, and gained 2.59% for the week on light, below average NASDAQ exchange weekly volume. Large caps shown by the S&P 500 index gained 0.47% this past Friday, and gained 1.41% for this past week.

indexstats

Moving on to our secondary indexes, our 100 best stocks out there shown by the S&P 100 gained 0.44% this past Friday, and gained 1.36% for this past week. Our mid caps shown by the S&P 400 index gained 0.33% this past Friday, and 1.02% for this past week. Our small caps shown by the S&P 600 and the Russell 2000, two different perspectives on small caps, gained 0.27% and 0.2% respectively for this past Friday, and gained 0.93% and 0.9% respectively for this past week. Our New York Stock Exchange composite index gained 0.44% this past Friday, and 1.22% for this past week. Our VIX Volatility index fell 3.94% this past Friday, 15.01% for this past week. Our Gold ETF increased by 0.84% this past Friday, 1.31% for the past week. And, our Oil ETF gained by 1.27% this past Friday, 5.38% for this past week. Let’s take a look at our economic calendar sub tab.

The first thing I need you to do, team, is read Friday’s Market Reflections summary. Then read Monday’s Market Focus pointers. Also, on Monday’s column, please find the once a week International Perspective and Simply Economics Reports. These two reports are very useful, unbiased summaries that give us a good foundation for moving forward.

calendarjul17

Back to the Friday, July 14 column. Consumer Price Index for May, month over month, was down 0.1%. For June it was flat. Year over year, in May, it was up 1.9%. In June, 1.6%. When you factor out food and energy, month over month, in May, was up 0.1%. In June, also up 0.1%. Year over year, in May, it was up 1.7%. In June, also up 1.7%.

calendarjul14

Taking a look at our Retail Sales numbers, in May, retail sales, month over month, were down 0.3%. We revised that number this time around to only being down 0.1%. In June it was down 0.2%. When you factor out automobile sales, you can see in May it was down 0.3%. In June, it was down 0.2%. When you factor out automobiles and gas, you can see in May it was flat. It June, it was down 0.1%. And the control group in May was flat, in June, down 0.1%.

Industrial Production numbers. In May flat, revised this time around to be up 0.1%. In June, up 0.4%. Manufacturing, month over month, in May, was down 0.4%, in June up 0.2%. The capacity utilization rate in May was 76.6%. It was revised this time around to be 76.4%. And, for June, it came in at 76.6%.  Business Inventories in April, month over month, were down 0.2%. In May,they were up 0.3%.  Mid month Consumer Sentiment. Last time, it was reported at 95.1, this time 93.1.  Moving to the 17th of July, we have our regional Empire State Manufacturing Survey being reported. Otherwise a quiet day.

Let’s take a look at our watch list by going to the Trading Tools tab and the Watch List sub tab. No tickers were identified by our covered call writing or option trading candidate filters.

Let’s take a look at our daily pics report generation tool. We’re going to take our index tickers and do a deeper dive on volume and trends. Volume was very much was down on Friday. Short duration and long duration trends are bullish.

volumeandtrends

Taking a look at our template algorithm filters, these mathematically go through whatever raw data they’re presented with, looking for patterns in the numbers. We’re going to present them with the raw data of the index tickers. That’s going to give us an idea of what the broad market personality is doing as well as what to look for in our watch list.

As you can see here, we have quite a few of the indexes suggesting that there is a trend continuation in place.

template1

Short term trend tests suggest the same.

template2

And it does look like in some cases, the industrials, the large caps, the 100 best stocks out there and the New York Stock Exchange composite index, that we are moving above resistance, in a trend.

template3

Let’s take a look at our charts.

We’ll start with a quick review template, which is a six month, daily chart, linear scale, open high low close bar, separate pane for volume and volume average. We’ll add to that our 200, our 50 and our 30 day simple moving averages. These lagging indicators help me determine trend. I have these lagging indicators added to the quick review template in a user defined template in my personal profile. Let’s apply them to the indexes, specifically starting out on the Dow Jones Industrial Average.  Once this chart loads, team, we’re going to expand it to full screen. Let’s change the scale of the chart going to two years, weekly bars.

djiaweekly

As you can see here, this was a very much up week. Good volume as we came back from the holiday. Still quiet volume compared to annual volume simply because we’re in the summer doldrums. The Industrials seems to be on a bullish trend.

Let’s go to our daily bar, six month charts. Looks like we’ve got higher highs and higher lows.

djiadaily

Our 30, our 50, and our 200 day simple moving averages are trending up. Our seven day simple moving average is trending up.

Let’s look at Friday’s five minute chart.

djia5min

As you can see here, after a Wednesday and Thursday, that were very stagnant, Friday was a very up day although we do want to pay attention to the profit taking that happened during professional hour. Back to our daily six month chart. Let’s take some notes. We closed at $21,637.74. Everything remains bullish.

Let’s move to the NASDAQ. We’ll go to our weekly, two year chart.

nasdaqweekly

We had a very up week on good volume. Volume that is good for summer doldrums. It looks like our weekly polarity can move to testing bull.

On to our six month, daily bar charts.

nasdaqdaily

The NASDAQ daily polarity can also go to testing bull. We have higher highs after lower lows. Our seven day simple moving average is close to crossing above our 30 day simple moving average. Our 30 day simple moving average remains flat. Our 50 day simple moving average trends up. So does our 200. We have a line of resistance we are at right now. We’ll know next week if we can get above that. Still, in the medium to long term, we’ve got a bullish bias.

Let’s take a look at our five minute chart.

nasdaq5min

Our five minute chart shows nice gains on Friday with a little bit of profit taking during professional hour. $6,312.47 for the close. Our low was $6,278.70. We’ll take a note that says we closed above resistance. We don’t adjust our support and resistance until we have a complete open high low close bar above resistance or below support. We’ll keep a bullish trading bias.

Let’s take a look at our S&P 500 index.  Weekly, two year, we see a nice up bar.

sp500weekly

Bullish indeed. Volume for the week is good for summer doldrums.

Six month, daily bar, nice S bar on Friday.

sp500daily

30, 50 and 200 day simple moving averages are pointing up. The seven day is pointing up. It has not yet crossed above our 30.

The five minute chart continues to trend up with some selling during the last 30 minutes of professional hour.

sp5005min

We’re at $2,459.27. Our low was $2,446.69. We’ll take a note that we close above resistance. Again, we do not adjust our support and resistance lines until we get a complete open high low close bar either above resistance or below support.

Let’s go ahead and take a look at our New York Stock Exchange composite index. The weekly, two year chart shows a nice weekly bar; an S bar.

nyseweekly

The six month, daily chart shows some real gains on Friday. All simple moving averages are pointing up. We’ll keep our trading bias at bullish.

The VIX volatility index, weekly, two year chart with a 40 week simple moving average.

vixweekly

The 40 week simple moving average is analogous to the 200 day simple moving average as there are five trading days in every week. We can see that this week had a drop in implied volatility for the S&P 500.

Let’s look at the six month, daily chart with a 200 day simple moving average. Our implied volatility is remarkably low, down 3.94% to $9.51.

vixdaily

Our overall trading bias remains bullish. Our broad market personality now seems to be in an up trend. We can call that a swing up.

The market is responding to the following including, but not limited to, transient external stochastic shocks. The US fiscal policy, the US federal reserve monetary policy, the monetary policies of China, Europe and Japan, the price of oil, US economic news including employment, housing, manufacturing and retail, and the market news of mergers, acquisitions, initial public offerings, public companies going private, and earnings.

That’s all I’ve got, team. Please take care.

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