Written by A.J. Brown

Broad Market Analysis - September 22, 2017

Hi Team, this is A.J. Brown with Trading Trainer on the evening of Friday, September 22 with your Trading Trainer weekend edition of your daily insights. What we are 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 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 look at both daily and weekly charts. But, before looking at any charts, team, we are actually going to log into the Trading Trainer Learning Community web portal by going to login.tradingtrainer.com.

And, 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 our “Recommendations” sub tab. Team, take a look at the recommendations we have for Monday, September 25’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 that audio the first time you click through today’s “Daily Insights” tab and its sub tabs, 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 Chart Of Interest video series, please click on the “Index Stats” sub tab.

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Our trading bias remains bullish. Our industrials, shown by the Dow Jones Industrial Average, edged down 0.04% on flat, below average New York Stock Exchange volume. It gained 0.36% for the week on light, below average New York Stock Exchange weekly volume. Our tech stocks, shown by the NASDAQ Composite Index, edged up 0.07% on light, below average NASDAQ exchange volume, and fell 0.33% for the week on light, below average NASDAQ exchange weekly volume. Our large caps, shown by the S&P 500 Index, edged up 0.06% today and edged up 0.08% for the week.

Moving onto our secondary indexes. Our 100 best stocks out there, shown by the S&P 100, edged up 0.02% today and 0.14% for the week. Our mid caps, shown by the S&P 400 index gained 0.33% today and 0.84% for the week. Our small caps, shown by the S&P 600, and the Russell 2000, two different perspectives on small caps, gaining 0.68% and 0.45%, respectively, for today; and 1.63% and 1.32%, respectively, for the week. Our New York Stock Exchange Composite Index gained 0.13% today, 0.58% for the week, and our VIX Volatility Index fell 0.83% today, to land at $9.59; near all time lows, and fell 5.7% for the week. Our Gold ETF gained 0.46% today, falling 1.82% for the week. Our oil ETF falling 0.1% today and gaining 0.39% for the week.

Let’s take a look at our economic calendar. We’re going to go to the “Daily Insights” tab and the “Economic Calendar” sub tab. First thing I’m going to have you do, team, is click on the Market Reflections summary for Friday, September 22, and after reading that summary, we’ll fast forward to Friday, September 25 and read the Market Focus pointers.

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Also, on September 25, we’ll take a look at the International Perspective and Simply Economics reports.

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These two reports come out weekly and give us a great foundation in order to understand the economic news, both domestically and internationally, for the previous and upcoming weeks.

The PMI Composite Flash was reported today. The composite level for August was 56. The manufacturing level for August was 52.5, and the services level for August was 56.9. For September, the composite came in at 54.6, a little bit less than expectations and less than August’s number. Manufacturing came in at 53, in line with expectations, a little bit higher than August. And, the services came in at 55.1, below consensus expectation and below last August.

Our Atlanta Fed Business Inflation expectations, in August, the year-over-year was at 1.9%, and that’s where they stayed for September.

Team, let’s take a look at our “Trading Tools” tab and our “Watch List” sub tab. Quite a few tickers identified by our option trading candidate filter today. We’ll evaluate those for liquidity and patterns before adding them permanently to our list.

Moving onto our “Trading Tools” tab and our “Daily Picks” report generation tool tab, our index tickers, let’s do a deeper dive by taking a look at volume and trends.

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Our volume was slightly lower to definitely lower than yesterday. Our volume compared to the 50-day volume simple moving average was about the same, slightly lower. The 200 day, we were definitely lower than; although, our volume has recently been consistently heavy on the oscillator. Our short-duration trends remain bullish, our long-duration trends remain neutral.

Taking a look at our template algorithm filters, these mathematically go through whatever raw data they are presented with. We’re going to present them with the index tickers, that’s going to give us an idea of what the broad market personality is doing, as well as what to watch for on our watch list. As you can see here, our trend continuation template’s coming up mostly neutral.

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Our trend reversal template still shows bullishness, but our short-term trend test is starting to decay away, range contraction.

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Could be just a pause before cycle two of the bull trend. We’ll have to wait and see.

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Our Bollinger Bands Width Index is showing eights, nines, tens. Our candlestick bar counters are in the single digits; wide channels not very long inside those channels. No conclusive information there.

Let’s take a look at our “Trading Tools” tab and our “Charting” sub tab. 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 like to add our 200, 50 and 30 day simple moving averages. These lagging indicators help me determine trend. I have those lagging indicators added to the Quick Review template here in a user defined template in my personal profile. We’re going to apply this template to the indexes, specifically starting out with the Dow Jones Industrial Average. Once this chart loads, team, I’m going to expand it to full screen.

Okay, the Dow Jones Industrial Average starting off with a weekly, 2-year chart shows this past week was very much a stall week.

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Volume was heavy; not so much compared to the Quadruple Witching week, but compared to the weeks leading up. Our polarity remains bullish, higher highs and higher lows. Returning to a six-month, daily chart, yesterday was a small down day.

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Today was a Doji bar; both on light volume. The 30, 50 and the 200 remain trending up. The 7 day simple moving average also is trending up.

Transitioning to our 5-minute chart, our 5-minute chart shows that yesterday was a down day.

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Today was down until about early afternoon, where it looks like bargain buyers stepped in and started to purchase up. Let’s take some notes. We closed at $22,349.59. Otherwise, our notes stay the same and we remain bullish with our trading bias.

Transitioning to the NASDAQ, looking at a weekly, 2-year chart, this week’s bar was basically the counter of last week’s bar.

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Very little price action. Volume was heavy, again, not compared to Quadruple Witching, but compared to the week’s leading up to Quadruple Witching. Still, having higher highs and higher lows. Moving to our 6-month, daily chart, we can see our 30 is already hinting at crossing back above the 50; both are trending up.

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Our seven is trending down, but still above the other two simple moving averages. Our 200 is trending back up. Today’s S-bar was in contradiction to yesterday’s. Let’s take a look at our 5-minute chart.

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Today, mostly sideways price action, and then after the afternoon session we saw trending up. Taking a look at our notes, we closed at $6,426.92. All other measurements stay the same. Our trading bias is neutral bullish.

The S&P 500 Index, the index I feel like most represents our watch list. Starting with a weekly, 2-year chart.

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This week was a Doji week, volume was heavy; higher highs, higher lows, bullish trading bias on the weekly chart. Moving to our 6-month, daily chart.

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Here, too, we see our 30 day quickly wanting to cross back above our 50 day. Both are trending up, the 200 is trending up. The seven has flattened out, but still well above the 30 and the 50-day simple moving average. Volume is light. Our five minute chart, showing similar to the NASDAQ, sideways, choppy all day. And then, an up tick in the later half of the day.

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Taking a look at our notes, we closed at $2,502.22. All other indicators stay the same. Our trading bias remains bullish.

Looking at the New York Stock Exchange Composite Index weekly, 2-year chart, a small S-bar for the week; higher highs, higher lows.

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Moving to our 6-month, daily chart. Seven is up, 30 is up, 50 is up, 200 is up. Our trading bias is bullish.

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Looking at our VIX Volatility Index weekly, 2-year chart with a 40-week simple moving average, our volatility dropped, with respect to the S&P 500 index, to close to all-time lows.

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6-month, daily chart, eyeing our 200-day simple moving average, which is analogous to our 40-week simple moving average. We can see here that implied volatility is creeping lower and lower. Our VIX was down 0.83% closing at $9.59 per share.

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Our overall trading bias does remain bullish. Our broad market personality is trending up, oversold, in range contraction.

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, including mergers-acquisitions, initial public offerings, public companies going private, and earnings.

Team, that’s all I’ve got for you. Please, take care.

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