Written by A.J. Brown

Broad Market Analysis - June 11, 2017

Hi team, this is A.J. with Trading Trainer, on the evening of Friday, June 9 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 and the S&P 500 Index. We are also going to take a look at the New York Stock Exchange Composite Index and the VIX Volatility Index, and because it is the weekend we’re going to look at both daily and weekly charts.

Before looking at any charts team, we’re actually going to login to the Trading Trainer learning community web portal by going to login.tradingtrainer.com. Of course, once we’ve logged into the learning community web portal, team, I’m going to direct 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 Monday, June 12’s trading session. Slight change 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 and it’s sub tabs. Go ahead and click on that link. An audio is going to start playing auto-magically in the background, in another browser tab or another browse window, depending on how you have your browser configured. Go ahead and listen to that audio the first time you do click through today’s daily insights and its sub tabs, it will make sure you hit all the high points. You can always drill down deeper on your own after the audio has finished. Team, when you listen to the audio commentary, please pay special close attention to the opening and closing comments. In the meantime, for this particular broad market analysis of this chart and video series, let’s get right to the ‘Index Stats’.

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Team, our trading bias remains Bullish. Our industrials shown by the Dow Jones Industrial Average gained .42% on heavy, above-average New York Stock Exchange volume, today. Gained .31% for the week on heavy, above-average New York Stock Exchange weekly volume. Tech stocks shown by the NASDAQ Composite, fell 1.8% today on heavy, above-average NASDAQ exchange volume, fell 1.55% for the week on heavy, above-average NASDAQ exchange weekly volume. Large caps shown by the S&P 500 Index fell .08% today, fell .3% for the week.

Moving on to our secondary indexes our 100 best stocks out there shown by the S&P 100 fell .11% today, fell .23% for the week. Our mid caps shown by the S&P 400 Index fell .39% today, .37% for the week. Small caps shown by the S&P 600 and the Russell 2000, two different perspectives on small caps falling 0.73% and 0.43% respectively today, gaining 1.43% and 1.16% respectively for the week. New York Stock Exchange Composite Index gaining 0.56% today, 0.22% for the week.

The VIX Volatility Index gained 5.31% today, 9.74% for the week. Tje Gold ETF fell 0.91% today, 0.88% for the week. The Oil ETF gained 0.64% today but fell 3.75% for the week. Team, let’s take a look at our economic calendar.

Team, the first thing I’m going to ask you to do is check out the market reflections summary for today’s trading session. Then go to June 12 and check out the market focus pointers for Monday’s trading session. Also, because it is the weekend I’d like you to read the International Perspective report and the Simply Economics Reports found on the Monday, June 12 column. These are once-a-week reports that are very beneficial to check out every weekend; make it part of your process.

Coming on back to June 9, wholesale trade back in March, inventories month-over-month were up two tenths of a percent. We revised that number this time around to only be up one tenth of a percent. For April, down half a percent.

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Taking a look at next week. Monday, it is going to be a very quiet day. In the afternoon, we have our treasury budget report. Tuesday we have a Federal Open Market Committee meeting that begins and ends on Wednesday, June 14. We’ve got our Consumer Price Index, we’ve got our Producers Price Index. That is retail and wholesale inflation respectively. We got our retail sales numbers coming this week, and we’ve got individual regions starting to report their manufacturing data for the month. We have Industrial Production, the Housing Market Index, Housing Starts and the Import and Export Prices report. It’s going to be a busy week but Monday is going to be a slow start.
calendarjun12
Let’s go to our ‘Trading Tools’ menu and the sub menu ‘Watch Lists’. Three tickers have been identified by our option trading candidate filter. We’re going to evaluate those for liquidity and patterns before adding them permanently to our list.

‘Trading Tools’ and ‘Daily Picks’ sub menu. We’ll take our indexes and do a deeper dive looking at volume and trends. Volume is very much higher compared to what it was on Thursday especially with respect to the NASDAQ. Same compared to the 50 day and the 200 day simple moving volume averages. The oscillators are down. Short duration trends are on the neutral bullish side, long duration trends, only the NASDAQ and the S&P 500 are showing bullishness. Oil has been going down.

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Let’s take 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 it with the raw data of our index tickers. That’s going to give us an idea what the broad market personalities doing. As well as what to look for in our watch list. Trend continuations, there’s no evidence of such.

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Short-term trend test starting to show some bullishness, bearishness mix almost like a top maybe found in both the short term trend test in the trend reversal test columns.

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Bollinger Band Width Index, very wide. We’ve got sevens through tens, mostly sevens and eights. And, our bar count is starting to increment close to that magic number of 20. There are some cases where our candlesticks did pop out of the Bollinger Bands and reset, those were the small caps. We’ll see how this plays out, in the meantime let’s take a look at our charts.

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We’ll go to ‘Trading Tools’ and ‘Charting’. We’ll start off with the ‘Quick Review’ template, this is simply a six-month, daily chart, linear scale, open-hi-low-close bar, separate pane for volume and volume average. To that I’m going to add the 200, the 50, and the 30 day simple moving average, otherwise known as our lagging trend indicators. They help me determine the trend. I have those three simple moving averages added to the ‘Quick Review’ template built into a user-defined template I have on my personal profile. We’re going to apply that to the indexes specifically starting out with the Dow Jones Industrial Average.

As soon as this loads team I’m going to expand it to full screen. Because it is the weekend let’s take a look first at the weekly, two-year chart, and we can see that the Dow inched higher.

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Volume actually came in higher. We’re still making a higher high after making a higher low and so we’re going to keep our polarity designation for the weekly chart to bullish.

Let’s now go down to a six month daily chart.

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Same higher high, after higher low and our 30, and our 50, and our 200 day simple moving average is still pointing up. Our seven day simple moving average still pointing up. Volume is building. It’s heavy and it’s above average. Today’s price action, up on the Dow Jones Industrial Average, is actually somewhat validated.

Let’s take a look at the five-minute chart.

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Interesting trading day. Every day this week we have been seeing first, a kind of, sideways day, and then we on Wednesday had a little bit more chop than we did on Tuesday. Thursday the chop got more aggressive and today the chop was very aggressive. TOday it’s kind of ending not much different than where we started after a gap. Let’s take a look at our notes. We closed at $21,271.97 our low was $21,159. Because we’ve got a high and close above our resistance line, I’m just simply going to say, “Closed above resistance.” The reason is, because I don’t adjust my support resistance zone until I’ve got a complete open-high-low-close bar out of the zone. Everything else remains bullish with respect to the Dow.

Now we’ll move over to the NASDAQ Exchange. Looks like money flowed out of the NASDAQ and it might be that it wound up in the Industrials. Before I start looking at the daily chart, let’s look at the weekly two-year.

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Erased the gains from last week, it looks like we erased the gains from last week just today. Heavy volume weak, still higher highs, higher lows. The polarity for weekly charts remains bullish, I mean, one down week does not make a downmarket.

Coming on back to the six-month, daily chart.

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Today, really was a sell-off day for the Techs. We had been making higher highs and higher lows, and now we just created for ourselves a lower low so we are now ‘Testing Bear’ in the polarity. Still, our seven’s up, our 30’s up, our 50’s up, our 200 is up. Switching to a five-minute chart.

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We just saw a major sell-off in the tech industry today after just moving sideways for a while. Coming on back to our daily. Taking some notes, our close was $6,207.92, our high was $6,341.70 so it’s like we went up and then dipped all the way down through our zone. Our open was $6,330.25. I’m going to make a note here, closed below support. Our 7, 30, 50, and 200 are all oriented and trending. We just had this one down day. Again, a down day does not make a down market, there must be a reason, perhaps correlation, why the Tech stocks pulled back today.

Take a look at the S&P 500 Index, the index I feel like most represents our watch list. Weekly, two-year.

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Kind of a doji bar for the week. Nice volume. Kind of telling me a little bit that people, meaning investors, are starting to get a little bit antsy, and looking for something to happen. The 30, the 50, 200 remained trending up. The seven still going up. Higher highs, higher lows. We’ll see what happens as we play out here.

Let’s take a look at the five-minute chart.

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Very similar to what we said was happening with the Dow. Quiet. Wednesday was a little bit more volatile. Thursday more volatile. Then today, up, down and back up.

Daily chart, $2,431.77, yes, yes, yes, yes, up, up, up, bullish and bullish.

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New York Stock Exchange Composite Index. Let’s go to the weekly, two-year.

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Got higher highs and higher lows.

Let’s go back to our six-month and our daily.

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The New York Stock Exchange Composite Index is one of our secondary indexes but it’s one that we do reference. Today was actually an up day, so we saw money basically move from the Tech stocks into the rest. The New York Stock Exchange, I want to keep this a bullish bias.

Our VIX Volatility Index, let’s start off with our two-year weekly chart.

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Let’s replace our 50-week simple moving average, with our 40-week simple moving average. That is more correlated with the 200 day, because there are five days in every week. If we look at 40 weeks we’d be looking at the same as 200 days. You can see that the VIX actually is still incredibly low, when we look at the weekly.

We’ll go to six-month daily.

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We’ll swap out the 40 for the 200 day simple moving average. We’ll see that even though today was an extreme move in volatility, we still very much are below the simple moving average. Still, incredibly low the VIX actually was up today a whopping 5.31%, that brings us to $10.70 from $10.39.

Our overall trading bias still remains bullish, again one down day in the Tech stocks does not make a downmarket. The broad market personality as far as I’m concerned is trending up in range contraction, I’m going to put in here, increasing volatility.

Market is responding to the following, including but not limited to, transient external stochastic shocks, the US fiscal policy, US Federal reserve monetary policy, monetary policies of China, Europe, and Japan, the price of oil, US economic news, including the employment, housing, manufacturing and retail, market news of mergers, acquisitions, initial public offerings, public companies going private, and earnings. Team, that’s all I’ve got for this weekend. Please take care.

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