Written by A.J. Brown

Broad Market Analysis - June 23, 2017

Hi, team. This is AJ with Trading Trainer on the evening of Friday, June 23 with your Trading Trainer Weekend Edition of your Daily Insights. What we’re going to do here, team, is take a look at our 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 and, because it is the weekend, we’re going to take a look at both weekly and daily charts, but before looking at any charts, team, we’re actually going to log in to the Trading Trainer Learning Community Web Portal by going to login.tradingtrainer.com. Of course, once we’ve logged in to the Learning Community Web Portal, we’re going to look at our Daily Insights tab and further to our Recommendations sub-tab.

Team, take a look at the Recommendations we have for Monday, June 26’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 and its sub-tabs. Go ahead and click on that link. An audio is going to start playing automatically in the background in another browser tab, or another browser window, depending on how you have your browser configured. Go ahead and listen to that audio the first time you click through today’s Daily Insights 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 commentary is over. Team, pay special close attention to the audio commentary during the opening and closing.

In the meantime, for this particular broad market analysis of this Charts of Interest Video Series, please click on the Index Stats sub-tab. Team, our trading bias is bullish. Our industrials, shown by the Dow Jones Industrial Average, edged down 0.01% today on heavy, above average New York Stock Exchange volume. For the week, the Dow Jones Industrial Average edged up 0.05% on light, above average New York Stock Exchange weekly volume. Tech stocks shown by the NASDAQ composite index gained 0.46% today on heavy, above average NASDAQ exchange volume. It gained 1.84% for the week on heavy, above average NASDAQ exchange weekly volume. Large caps shown by the SP 500 index gained 0.16% today, and gained 0.21% for the week.

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Moving on to our secondary indexes, the 100 best stocks out there shown by the S&P 100, gained 0.14% today, gained 0.33% for the week. Moving on to our mid-caps shown by the S&P 400, gained 0.43% today, fell 0.54% for the week. Small cap shown by the S&P 600 and the Russell 2000, two different perspectives on small caps, gained 0.92% and 0.73%, respectively today. Edged down 0.06% and fell 0.57%, respectively for the week. The New York Stock Exchange composite index gained 0.18% today, fell 0.33% for the week. And the VIX volatility index fell 4.39% today, and fell 3.47% for the week. The Gold ETF gained 0.43% today, and edged up 0.08% for the week. The Oil ETF gained 0.91% today, but fell 4.11% for the week.

Team, let’s take a look at our economic calendar. We’ll click on the Daily Insights tab and the Economic Calendar sub-tab. Team, first thing we want to do is look at the Market Reflections summary found on today, Friday, June 23’s column.

Then we’ll click over to Monday, June 26’s column. Please read the Market Focus pointers for Monday, June 26. Also, on Monday, June 26, you’ll notice the International Perspective and the Simply Economics reports. Please read these reports that are published once a week. These particular reports will give you a great insight of what happened the previous week and what’s coming up for the week to come.

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Let’s click back to the Friday, June 23, column. Our PMI Composite Flash for May came in at 53.9. For June, it came in at 53, below expectations. Manufacturing for May came in at 52.5. For June, 52.1, below expectation. Services in May came in at 54. June came in at 53, below expectations.

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Then we have our New Home Sales. New Home Sales for April, the seasonally adjusted annual rate, was at 569,000. We revised that April number to be 593,000 this time around, higher than the previous reading. Then for May, we’re reporting 610,000 homes, higher than expectations.

Moving to next week, we have the Durable Goods Orders on Monday and more region’s reporting their manufacturing numbers. Then, throughout the week, we have GDP, Pending Home Sales, Consumer Confidence, the Home Price Index. It will be a news rich week.

Let’s move on to our Trading Tools tab and our Watch List sub-tab. Quite a few tickers were identified by our options trading candidate filter. We’re going to evaluate those for liquidity and patterns before adding them permanently to our list.

Going to the Trading Tools tab and the Daily Picks sub-tab, we’ll do a deeper dive on our indexes by looking at volume and trends. Volume was incredibly high today on both the New York Stock Exchange and the NASDAQ. Our short duration trends on both, well I should say our short duration and our long duration trends, on our big three indexes, as well as our 100 best stocks out there, seem to be bullish. When we look at our mid-caps and our small caps, instead we see a little bit of uncertainty.

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Now let’s take at look at our template algorithm filters. These mathematically go through whatever raw data they are presented with. We’re going to present it with the raw data of our 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.

Trend continuations are out.

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Short term trend test looks to be neutral.

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It looks like we’re channeling sideways and we’re getting a little bit tighter, still not in a consolation, but tighter than previous days in our channels.

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Let’s take a look at our charts by going to the Trading Tools tab and the Charting sub-tab. We’ll start with a six month, daily chart, linear scale, open high low close bar, separate pane for volume and volume average. We call that our Quick Review template. We’re going to add our 200, our 50, and our 30 day Simple Moving Averages. These lagging indicators helps us identify our trends. We’re going to apply those to the Quick Review template here in a user defined template on my personal profile. I’m going to apply these to the indexes, specifically starting out with the Dow Jones Industrial Average. As soon as this chart loads, team, we’re going to expand it to full screen.

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As you can see on the DJIA here, we seemed to have had yet another Doji bar, but let’s start off by taking a look at a weekly chart and look at two years worth of data.

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Still have higher highs and higher lows. Volume this week was very strong. Price hardly moved for the week. Coming back to our six month, daily chart, again, we already noticed that there was a Doji bar, very similar to yesterday. The 30 is up, the 50 is up, the 200 is up, the 7 is up. Price is below the 7, so the the 7 is starting to flatten, but hasn’t even thought about turning down. Let’s take a look at today’s five minute chart. Team, today was just a choppy day on the Dow Jones Industrial Average. Moving on back to our daily chart. We’ll take some notes. The Dow Jones Industrial Average closed at $21,394.76, otherwise everything that we monitor is still in the bullish bias.

Take a look at the NASDAQ, going to a two year, weekly chart, continuing to trend higher, higher highs, higher lows, good volume this week.

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Moving to a six month, daily chart.

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Today was an up day, very strong volume. The 7’s pointing up, the 30’s pointing up, the 50 is pointing up, the 200 is pointing up. Taking a look at the five minute chart. The five minute chart shows an overall up trend, but it was a choppy up trend today. Looking at our notes, $6,265.25, our low was $6,218.78, I’m going to take a note here, “closed above resistance.” We’re not going to adjust our support and resistance lines until we get a complete open high low close bar outside of the zone.

Let’s take a look at the S&P 500 index. This is the index, I feel like, most represents our watch list. We’ll go to our two year, weekly chart.

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Continuing to trend up, $2,438.30, higher highs, higher lows.

Let’s go to our six month, daily chart.

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Today looked like a no price action day. The simple moving averages continue to trend up and are oriented correctly. The 7 has stalled. Let’s go to our five minute chart. Side ways, choppy. Coming on back to our daily chart, $2,438.30, everything remains bullish.

New York Stock Exchange composite index, looking at our weekly, two year chart, continues to remain bullish.

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Looking at our six month, daily chart, seems to have dropped on Monday, Tuesday, and Wednesday, but Thursday and Friday recouped some of the losses. We’re going to keep our bias at bullish.

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Moving on to the VIX Volatility Index, switching to the weekly, two year, ditching the 30 and the 7, replacing the 50 with the 40 week Simple Moving Average.

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The reason we use the 40 week Simple Moving Average is because it is analogous to the 200 day Simple Moving Average. There are five trading days in every trading week. As you can see here, price is extremely low, well below the 40 week Simple Moving Average.

Let’s switch to our six month, daily chart and we’ll switch to our 200 day Simple Moving Average. Again, price is extremely low compared to the simple moving average, as well as overall. We are down 4.39%. Trading at $10.02.

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Our overall trading bias remains bullish. We do remain in range contraction.

Our market is responding to following, including but not limited to, transient external sotchastic shocks. The U.S. fiscal policy. The U.S. Federal Reserve Monetary Policy. The Monetary Policies of China, Europe and Japan. The price of oil. U.S. economic news, including the employment, housing, manufacturing and retail news. And, of course, market news, mergers and acquisitions, initial public offerings, public companies going private, and earnings. That’s all I’ve got for you, team. Please take care.

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