Written by A.J. Brown

Broad Market Analysis - September 15, 2017

Hi, team. This is A.J. Brown with Trading Trainer on the evening of Sunday, September 17, 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 lists, 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 look at both daily and weekly charts. But, before looking at any charts, team, we’re actually going to login to the Training Trainer Learning Community web portal by going to login.tradingtrainder.com.

Of course, once we’ve logged into the Learning Community web portal, team, I’m going to direct you right to the “Daily Insights” tab and further to the “Recommendations” subtab. Team, take a look at the recommendations for tomorrow, which is Monday, September 18’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 it’s subtabs. Go ahead a click on that link. An audio is going to start playing automagically 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 insights tab and its subtabs. 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 close 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 click on our “Index Stats” subtab.

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Our trading bias remains neutral bullish. Our industrials, shown by the Dow Jones Industrial Average, gain 0.29% this past Friday on heavy, above average New York Stock Exchange volume, and gained 2.16% for this past week on heavy, above average New York Stock Exchange weekly volume. Our tech stocks shown by the NASDAQ Composite Index gained 0.3% this past Friday on heavy, above average NASDAQ Exchange volume, and gained 1.39% this past week on heavy, above average NASDAQ Exchange weekly volume. Our large caps shown by the S&P 500 Index gained 0.18% this past Friday and 1.58% for the past week.

Let’s move on to our secondary indexes. Our 100 best stocks out there shown by the S&P 100 gained 0.13% this past Friday and 1.67% for this past week. Our mid caps shown by the S&P 400 Index gained 0.41% this past Friday, 2.03% for this past week. Our small caps shown by the S&P 600 and the Russell 2000, two different perspectives on small caps, gained 0.59% and 0.47% respectively for this past Friday, and gained 2.61% and 2.31% respectively for this past week. Our New York Stock Exchange Composite Index gained 0.15% this past Friday and 1.61% for this past week. Our VIX Volatility Index fell 2.59% this past Friday and 16.09% for this past week, closing at $10.17 per share. Our Gold ETF fell 0.5% on Friday, down 1.91% for the week, and our Oil ETF gained 0.69% this past Friday and 4.83% for this week.

Let’s take a look at our economic calendar. We’ll go to our “Daily Insights” tab and our “Economic Calendar” subtab. First thing we’ll do is for Friday, September 15, we’ll take a look at our Market Reflections summary.

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For Monday, September 18, we’ll take a look at our Market Focus pointers.

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And, on Monday, September 18, we have our once a week International Perspective and Simply Economics reports. We’ll read through those thoroughly. On Friday, September 15, we had Quadruple Witching, which explains the extra heavy and above average volume.

Retail sales were reported. In July retail sales are up 0.6%. That was revised down this time around to be only up 0.3%. In August retail sales were down 0.2%. Factoring out volatile automobiles, the month over month change in July was up a 0.5%. That was revised down to being up only 0.4%, and in August it was up only 0.2%. Factoring out both the volatile autos and gasoline, retail sales in July was up 0.5%, and in August down 0.1%. Our control group in July was up 0.6%, in August down 0.2%.

The Empire State Manufacturing Survey in August was at 25.2, that’s the general business conditions Index. For September, 24.4.

Industrial Production in July, month over month had increased by 0.2%. We revised that Industrial Production number this time around to be up 0.4%. In August we have it dropping 0.9%. Manufacturing in July was down 0.1%. We revised that to be flat. In August it’s down 0.3%. The capacity utilization rate for July was 76.7%, revised this time around to be a little bit higher, 76.9%. In August, up 76.1%.

Our business inventories. In June, month over month, was up 0.5%. In July up another 0.2%. Business inventories increase when we’re manufacturing but not selling.

Consumer sentiment mid month. Last time we reported 96.8. This time our preliminary number for September, 95.3.

Taking a look at our “Trading Tools” tab and our “Watch List” subtab, quite a few tickers identified by our option trading candidate filter. We’ll notice that Boeing is not highlighted in yellow. That’s because Boeing is already on our watch list. This reaffirms its position there. For the candidates highlighted in yellow, we’ll evaluate them for liquidity and patterns before adding them permanently to our list.

Going to our “Trading Tools” tab and our “Daily Picks” subtab, we’ll take a deeper dive on our indexes by looking at volume and trends.

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Volume was extremely high thanks to Quadruple Witching, which is the expiration not only of monthly options, but of monthly index options, as well as index futures and single stock futures. Quadruple Witching throws our volume numbers for technical analysis, off. Short duration trends are bullish. Long duration trends are neutral.

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’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 personality is doing, as well as what to look for in our watch lists. With respect to trend continuations, it looks neutral.

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With respect to short term trends and trend reversals, we look bullish going on four days now.

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Still, we are looking at cycle number one, the most fragile of a new trend.

With respect to sideways channeling, we have very wide Bollinger Band widths, and our bar counters are very low. We popped out of our Bollinger Bands early this past week.

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Going to our “Trading Tools” tab and our “Charting” subtab, we’ll start with our “Quick Review” template, which is a six month, daily chart with a linear scale and open high/low close bars. It has a separate pane for volume and volume average. We’ll add to it our 200, our 50, and our 30 day simple moving averages. These lagging indicators help me determine trend. I’ve applied those simple moving averages to the “Quick Review” template in a user defined template here in my personal profile. We’ll go ahead and apply that template to our indexes, specifically starting out with the Dow Jones Industrial Average. Once this chart loads, I’m going to expand it to full screen.

Because it is the weekend, we’re going to start by looking at a weekly, two year chart. This was a definite up S-bar week. Heavy volume due to Quadruple Witching can’t be attributed to volume validation. Still, from a weekly perspective, we seem bullish. Let’s go to a six month, daily chart.

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Our 30 day simple moving average, our 50 day simple moving average, and our 200 day simple moving averages are up. Again, price action, gapped up, but then very little action on Friday. Heavy volume on quadruple witching, again, can’t be attributed to the price action of the day.

Seven day simple moving average also trending up and oriented above the 30 and the 50 day simple moving averages.

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Taking a look at our five minute chart, slight gap up at open.

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Slight trending throughout the day. Back to our daily chart. Let’s take a look at our notes. We closed at $22,268.34. Our low was $22,214.52. We’ll go ahead and take a note and say we closed above resistance. We won’t adjust our support and resistance lines until we have a complete open high/low close bar above resistance. Otherwise, everything stays bullish. In fact, we will be changing our trading bias to full on bullish.

Moving on to our NASDAQ Exchange. Our NASDAQ Composite Index starting with a weekly, two year chart shows that we’re testing a level of resistance. Heavy volume attributed to Quadruple Witching. Backing ourselves off to a six month, daily chart, this past Friday’s price action shows similar price action to the previous three days.

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The seven day is up.

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The 30 day is up. The 50 day is up. The 200 day is up.

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

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Five minute chart shows on Friday that we had a huge gap up, only to have it decay down throughout the day. Back to our daily chart, taking a look at our notes, we’re at $6,448.47. That’s right below our level of resistance. Still, everything else remains the same. We’ll keep our trading bias at neutral bullish.

Taking a look at our S&P 500 Index, looking at our weekly, two year chart.

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We have a S bar for this past week, again, on heavy volume, but that heavy volume is attributable to Quadruple Witching. Looking at our six month, daily chart, we closed at $2,500.23.

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Our 30 is not yet crossed down below the 50. It looks like it’s scraping up again. Still trending up. They’re all trending up. Our seven day simple moving average oriented correctly.

Looking at our five minute chart, rocky day on Friday.

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Overall, trending a little bit up. Taking a look at our notes, closing at $2,500.23, with our low at $2,493.16. We’ll take a note about closing above resistance.

Taking a look at the New York Stock Exchange Composite Index starting on a weekly, two year chart, beautiful S bar, gap up on open it seems for the week.

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Back to our six month, daily chart.

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Seven clearly above the 30 and the 50. Price action jumped up. Our 200 is trending up as well. It actually looks like our 50 is slightly above our 30, but our 30 looks like it will close right above our 50 soon. Our trading bias remains neutral bullish.

Take a look at our VIX Volatility Index, going to a weekly, two year chart.

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Using our 40 week simple moving average, volatility dropped considerably this past week, down to the level around 10; all time lows.

Moving to our six month, daily chart, our 200 day simple moving average, which is analogous to the 40 week simple moving average, as there are five trading days in every week, again, we can see implied volatility of the VIX has closed lower for the week.

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Our VIX Volatility Index closed down 2.59%, closing from $10.44 to $10.17.

Our overall trading bias, it actually goes this time to full on bullish. We’re going to keep our broad market personality of channeling sideways, testing resistance, just till we get further validation that’s not on Quadruple Witching, this upcoming week.

Our market is responding to the following, including but not limited to, transient external stochastic shocks, U.S. fiscal policy, U.S. Federal Reserve monetary policy, monetary policies of China, Europe and Japan, the price of oil, U.S. economic news including employment, housing, manufacturing and retail, 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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