Written by A.J. Brown

Broad Market Analysis - September 8, 2017

Hi team, this is A.J. Brown with Trading Trainer on Friday, September 8, 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 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 log into 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 want to direct you right to today’s ‘Daily Insights’ tab and further to the ‘Recommendations’ sub tab. Take a look at the recommendations we have for Monday, September 11’s trading session. Slight changes in these recommendations could have major impact on your trading. We’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 automagically in the background in another browser tab or another browser window depending 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’ll make sure you hit all of 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 this meantime for this particular Broad Market Analysis of this Chart Of Interest video series, let’s go right to the ‘Index Stats’ sub tab.

indexstats

Our trading bias is neutral bullish. Our industrials shown by the Dow Jones Industrial Average edged up 0.06% today on flat, below average New York Stock Exchange volume. It fell 0.86% for the week on heavy, below average New York Stock Exchange weekly volume. Our tech stocks, shown by the NASDAQ Composite Index fell 0.59% today on light, below average NASDAQ exchange volume, and fell 1.17% for the week on heavy, below average NASDAQ exchange weekly volume. Our large cap shown by the S&P 500 index fell 0.15% today, 0.61% for the week.

Moving onto our secondary indexes, our 100 best stocks out there shown by the S&P 100 fell 0.31% today, 0.76% for the week. Our midcap shown by the S&P 400 index gained 0.32% today, fell 1.08% for the week. Our small caps shown by the S&P 600 and the Russell 2000, two different perspectives on small caps gained 0.18 and 0.05% respectively today, and for the week fell 0.96 and 1% respectively. The New York Stock Exchange composite index edged up 0.07% today, and fell 0.25% for the week. Our VIX volatility index gained 4.94% today, gained 19.64% for the week. Our gold ETF fell 0.12% today, gained 1.52% for the week. Our oil ETF fell 2.99% today, gained 0.62% for the week.

Let’s take a look at our economic calendar. We’ll go to the ‘Daily Insights’ tab and the ‘Economic Calender’ sub tab. Team, I want you to read the Market Reflections summary for today, Friday, September, 8. And then I want you to read the Market Focus pointers for Monday September, 11. Also I’d like you to read the once a week International Perspective and Simply Economics reports. These two reports of what happened the previous week, and what’s coming up for the week to come, are good foundations to trade from. On Friday, September 8, our wholesale trade inventories for June, came in at month over month change of 0.7%.

calendarsept8

We revised that June number to be up 0.6%, and our July numbers came in at 0.6%. For consumer credit in June, the month over month’s change was an increase of $12.4 billion. That June number was revised this time around to only increasing by $11.8 billion. In July it increased by $18.5 billion. Looking forward to next week, Monday looks to be a quiet economic news day.

calendarsept11

The rest of the week actually looks like there are headlines on the economic news front, mostly in the morning sessions.

Moving onto our watch list, we’ll go to the ‘Trading Tools’ tab and the ‘Watch List’ sub tab. Quite a few tickers identified by both our Covered Call Writing Candidate Filter and our Options Trading Candidate Filter. We’ll evaluate these candidates for liquidity and patterns before adding them permanently to our list.

Let’s go to our ‘Trading Tools’ tab and our ‘Daily Picks’ sub tab. Using our daily pics report generation tools, we’ll do a deeper dive looking at volume and trends of the indexes. The volume was high on the New York Stock Exchange, still not higher than the 200 day volume simple moving average.  The NASDAQ showed lower volume today, about the same on the 50 and 200 day volume simple moving averages.

volumntrends

Our short duration trends look to be neutral and even our long duration trends look to be neutral as well.

Taking a look at 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 them with the raw data of the 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 list. Looking at the number of candidates that appeared by all those template filters (there are so few), it looks like there’s a lot of neutral sideways movement going on.

template1

template2

template3

Let’s take a look at our charts. We’ll use our ‘Quick Review’ template, which is a six-month, daily chart, linear scale, open high low close bars, and a separate pane for volume and volume average. I’ll add to that my 200, my 50, and my 30 day-simple moving averages. These simple moving averages help me determine trend; they are lagging indicators. I have those lagging indicators applied to the ‘Quick Review’ template here in a user defined template in my personal profile. I’m going to go ahead and apply that 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. And, we’ll start off, because it is the weekend edition, looking at a weekly two year chart.

djiaweekly

So, as you can see here on the weekly, two year chart, we had a bar basically engulfed by the previous bar hinting at a consolidation. And, our weekly volume… of course it was a shortened week… was light.

We’ll take a look here at our six, month daily chart.

djiadaily

We also see the sideways movement, our 50-day is up, our 30-day is up, our 200-day is up, our seven day is no longer wanting to cross the 30-day, it’s actually pointing down now. Volume actually increased after the Labor Day holiday. It looks like traders are, at this point, coming back from their summer vacations and are somewhat confused and undecided. That won’t last for long. Let’s go to our five minute chart.

djia5min

Our five minute chart has a lot more of what we saw for the last three trading days, which was sideways price action. Back to our daily chart, we’ll take a look at our notes. We closed at $21,797.79, all the other statistics seem to stay exactly the same. We’ll keep a neutral / bullish trading bias.

Onto the NASDAQ, starting with a weekly,two year chart, again an engulfing bar.

nasdaqweekly

Volume was light taking into account we only had four trading days, not five.

On the daily, six month chart, the 50 is up, the 30 is flat, the seven has crossed above both the 50 and the 30, the 200 is trending up.

nasdaqdaily

Taking a look at our five minute chart, today we actually some gentle sell off in the tech stocks.

nasdaq5min

Back to our daily. Looking at our notes. The NASDAQ closed at $6,360.19, all the other statistics seem to stay exactly the same. We’ll keep a neutral / bullish trading bias.

Taking a look at the S&P 500 Index, the index I feel like most represents our watch list, starting at a weekly, two year chart.

sp500weekly

Again, another engulfing bar. Back to our six month, daily chart.

sp500daily

Consolidation. The 30-day SMA remains flat, the 50 remains up, the 200 remains up, the seven has crossed back above the 30. Volume… good ever since we returned back from the Labor Day holiday. Taking a look at the five minute chart.

sp5005min

More sideways price action. Back to our daily. We closed at $2,461.43. Seven is above the 30-day SMA. Seven is above the 50. 30 is above the 50. The 50 is above the 200. All of our statistics stayed the same. We’ve got a neutral / bullish trading bias.

Taking a look at the New York Stock Exchange Composite Index. Starting with our weekly, two year.

nyseweekly

More consolidation. Back to our six month, daily.

nysedaily

I see a convergence of our seven, our 30, and our 50-day SMAs. Our 30 is trending down. Our 200 is trending up. Still, we have consolidation. We’ll keep a neutral / bullish trading bias.

Looking at the VIX Volatility Index, starting with a weekly, two year chart.

vixweekly

Using a 40-week Simple Moving Average, we can see that volatility actually stayed up above that volatility mean, showing that implied volatility is increasing as traders are trying to figure out what will come out of the consolidation. Let’s go to our six month, daily chart.

vixdaily

We’ll look at a 200-day Simple Moving Average, which is similar to the 40-week Simple Moving Average. And again, you can see most of the bars from this past week are trading above the 200 day mean. Our VIX volatility index was up today by 4.94%. That means it went from $11.55 to $12.12.

Our overall trading bias stays at neutral / bullish. Our broad market personality, at this point, is consolidating sideways.

The market is responding to the following, including but not limited to, transient external stochastic shocks, US fiscal policy, US federal reserve monetary policy, the monetary policies of China, Europe, and Japan, the price of oil, US economic news of employment, housing, manufacturing, and retail, and the market news of merges and acquisitions, initial public offerings, public companies going private and earnings.

Don’t forget that this upcoming Friday is options expiration. So if you’re following plans that have long positions it would be a good idea to roll those plans to using the October series.

That’s all I’ve got, please take care.

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