Written by A.J. Brown

Broad Market Analysis - November 3, 2017


Hi team. This is A.J. Brown with Trading Trainer on the evening of Friday, November 3rd, with your Trading Trainer weekend edition of your daily insights. What we are 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 NSADAQ Composite Index, 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 are going to take a look at both daily and weekly charts. But, before looking at any charts, team, we are actually going to log in to the Trading Trainer Learning Community web portal, by going to login.tradingtrainer.com.

Of course, once we have logged into the learning community web portal, team, I am going to direct you right to today’s daily insights tab, and further to the recommendations sub tab. Go ahead and take a look at the recommendations we have for today’s trading session. Slight changes in these recommendations could have major impact on your trading.

You are also going to find 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 automagically in the background in another browse 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 tab and it sub tabs, it will 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 close attention to the opening and closing comments. In the meantime, for this particular broad market analysis of this chart of interest video series, let us go right to the index stats sub tab.

indexstats

Our trading bias remains bullish. Our industrials shown by the Dow Jones Industrial Average, gained a 0.1% on light, below average New York Stock Exchange volume. For this past week, we gained 0.45% on light, below average New York Stock Exchange weekly volume. Our techs stocks shown by the NASDAQ Composite Index gained 0.74% percent on light, above average NASDAQ exchange volume, and for this past week gained 0.49% on light, above average NASDAQ exchange weekly volume. Our large cap shown by the S&P 500 Index gained 0.31% and for this past week, 0.26%.

Moving onto our secondary indexes, our 100 best stocks out there shown by the S&P 100 gained 0.35%, and for this past week, gain 0.29%. Our mid caps shown by the S&P 400 Index gained 0.25% and for this past week fell 0.17%. Our small caps shown by the S&P 600 and the Russell 2000, two different perspectives on small caps, fell 0.64% and 0.11% respectively. They fell 1.7% and 0.88% respectively for this past week. Our New York Stock Exchange Composite Index was flat today. For this past week it edged up 0.05%. Our VIX Volatility Index fell 7.96% today, and for this past week it fell 6.73%. Our gold ETF fell 0.47% today and for this past week fell 0.23%. Our oil ETF gained 1.73% today and gained 3.14% for this past week. Team, let us take a look at the economic calendar, by going to the daily insights tab and the economic calendar sub tab.

First, we will start by reading our Market Reflections summary for today, Friday November 3rd, and then we will jump to Monday, November 6th’s trading session and read the “Market Focus” pointers.

calendarnov6

Also, on Monday, November 6th, we will read the International Perspective and Simply Economics reports. These two reports give us a foundational understanding of last week’s activity as well as what is expected for the week to come. These two reports are weekend must reads.

Back to Friday, November 3rd.

calendarnov3

Our Employment Situation was released. In September our non-farm payrolls month over month change was down 33,000 jobs. We revised that number to be up 18,000 jobs. For October we are reporting up 261,000 jobs. The unemployment rate in September was 4.2%. In October we are reporting 4.1%. The participation rate in September was at 63.1%. In October, 62.7%. It is going down. Our average hourly earnings, year over year in September, up 2.9%, in October up 2.4%. The average work week in September 34.4 hours and that stayed flat in October. Our International Trade numbers were reported. Our trade balance for August was a $42.4 billion deficit. That August number was revised to be a bit higher at $42.8 billion deficit, and in September we report a $43.5 billion deficit. Our PMI Services Index was reported. In September we reported 55.3 and that is what we report as well in October, above the 50 boom bust line. Taking a look at our Institute of Supply Management’s Non-Manufacturing Index, in September we reported 59.8, in October we are reporting 60.1. We reported our Factory Orders. In August we reported a month over month change of an increase of 1.2% and in September an increase of 1.4%. Taking a look at the week to come, overall it looks to be a quiet week, very little economic news reported.

Let us take a look at our watch list by going to the trading tools tab and watch list sub tab. Team, today we had quite a few candidates identified by our covered call writing and option trading candidate filters. We will evaluate these for liquidity and patterns before adding them permanently to our list.

Let us move on to our trading tools tab and daily picks sub tab. Here you will find our Trading Trainer Daily Picks Report Generation tool. We will do a deeper dive on our index tickers by taking a look at volume and trends.

volumntrends

Volume was about the same as it was yesterday. Above the 50 and 200 day simple moving averages on the NASDAQ Exchange, about the same, slightly lower on the New York Stock Exchange. Volume has been consistently higher, shown by the oscillator compared to the oscillator mean. Our short duration trends for the most part are bullish. The long duration trends are bullish as well. Our weakness is seen in the mid caps and small caps.

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

The trend continuation templates, for the most part, are lackluster. However, we see the long-term bull trend continuing to accumulate.

template1

Our short-term trend test and trend reversal templates are also not giving us very good leads to follow on, as they are mixed showing both bullish and bearish indications, with fairly short duration trends.

template2

Our pattern alteration template also is not giving us most much information this week. As we can see Bollinger Band width indexes are tight all the way out to being wide, and our bar counts, well, they look as if they are very light.

template3

Team, let us take a look at our charts by going to our trading tools tab, and our charting sub tab. We will start with a quick review template. A quick review template is a six month, daily chart, with a linear scale and open high low close bars. We also have a separate pane for volume and volume average. To the quick review template I add the 30, 50 and 200 day simple moving averages. These lagging indicators help me determine trend. I have these simple moving averages added to the quick review template in a user defined template here in my personal profile. I apply that template to the indexes, specifically starting with the Dow Jones Industrial Average. Once this chart loads team, I expand it to full screen. Fantastic.

Our Dow Jones Industrial average shows the 30, 50 and 200 day simple moving averages pointing up. Before we get ahead of ourselves, let us move to our weekly two year chart.

djiaweekly

For the week, we have a movement up in price ever so slightly on heavier volume. Higher highs and higher lows give us a bull polarity. Back to our six month daily chart, again, our simple moving averages are all trending up.

djiadaily

Today looks to have been a doji bar on light volume, perhaps investors checked out early for the weekend. Our seven day simple moving average continues to trend up as well. The orientation shows us further evidence there is a bull trend. Taking a look at our five minute chart, today we can see some price action moving up in the morning session, and then moving back down in the afternoon session.

djia5min

Overall, almost a null movement for the day. Back to our daily chart, let us take some notes. We closed at $23,539.19. Our low was $23,481.57. We will take a note that says “closed above resistance”. Everything else stays the same, our trading bias remains bullish.

Moving on to our NASDAQ exchange. We see a strong trading day today in the bullish direction, but let us first go to our weekly, two year chart.

nasdaqweekly

A stronger S Bar than we saw in the Dow Jones Industrial Average, on heavy weekly volume, higher highs and higher lows give us a bullish weekly polarity. Back to our six month daily chart.

nasdaqdaily

Our simple moving averages continue to trend up including our 200 day simple moving average. Our simple moving averages are oriented in a bull pattern. We had a strong up day today, strong volume. Let us take a look at our five minute chart.

nasdaq5min

Today we see a strong up trend in the tech stocks. Back to our daily chart. We closed at $6,764.44. All the other metrics stay the same. Our trading bias stays bullish.

Moving on to our S&P 500 Index, this is the index I feel like most represents our watch list. Going right to the weekly two year chart. Our simple moving averages point up on the weekly chart.

sp500weekly

Today was an up week on strong volume, higher highs and higher lows give us a nice bull polarity. Moving back to our six month daily chart, again, our simple moving averages continue to trend up including our seven day simple moving average.

sp500daily

Today was a bullish day overall. Volume peeled back a bit. Let us take a look at our five minute chart.

sp5005min

We closed at $2,587.84. Our low was $2,585.89. We will adjust our lines of support and resistance to the next psychological levels of support at $2,575 and resistance at $2,600. All other metrics stay the same. We remain in a a bullish trading bias for the S&P 500.

Moving on to our New York Stock Exchange Composite Index, our weekly two year chart shows we stalled for the week, but still higher highs and higher lows have us with a weekly bull polarity.

nyseweekly

Moving back to our six month daily chart.

nysedaily

Our simple moving averages continue to trend up, including the 200 day simple moving average, but indeed the last days have been all stall days. Our polarity remains bullish on the daily charts. Our trading bias remains bullish as well.

Switching to our VIX Volatility Index, going to the weekly two year chart with a 40 week simple moving average.

vixweekly

Our implied volatility has for the week, gone incredibly low, pulling down the 40 week simple moving average further. Switching back to our six month daily chart, today especially, our implied volatility closed low.

vixdaily

We will overlay our 200 day simple moving average, which is analogous to the 40 week simple moving average, and see indeed the 200 day simple moving average is continuing to be pulled down. We closed down 7.69%, to $9.14 per share.

Our overall trading bias remains bullish.

Our broad market personality remains trending up, overbought, in a condition of range contraction, confusion and uncertainty among investors is strong.

The market is responding to the following, including but not limited to, transient external stochastic shocks, coming from drama mostly from the US government. US fiscal policy or lack thereof including perhaps a hard look at tax reform. Then, of course, there is the US Federal Reserve Monetary policy, which for another session this past week came in stalled. Then there is the monetary policies of China, Europe and Japan. The price of oil. US economic news including employment, housing, manufacture and retail. Fially, of course, the market news including mergers and acquisitions, initial public offerings, public companies going private and earnings.

Team that is all I have got. Please take care.

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