Posts by Rod David
The First Trade…
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Friday was an uneventful day, surrounded by two major events. The first was a 25-point overnight rally that reached 1951.00. Reacting down to 1939.00 for the open still gapped up above Thursday’s 1926.50 highs. The morning ranged sideways back down to 1931.00, still comfortably above Thursday’s highs. Firming into the afternoon was ambushed by the second event, a 30-point plunge down to 1910.00. The close reacted up to 1925.00, back under Thursday’s high.
Overnight action’s new info…
Sunday night’s open confirmed that Friday’s plunge was not an anomaly. Fresh lows attacked 1905.00 on more signs of China’s “hard landing.” Despite recovering up to 1928.00 and 1930.00 into and out of Europe’s opens, another downleg has probed fresh lows testing 1904.00, presumably in reaction to Glencore’s continued implosion. Its reaction up to 1912.00 was just retraced entirely back down to 1904.00.
If, then…
Bounces help to absorb subsequent selling pressure before it manages to push price under a relevant level during a relevant timing window. Last night’s bounce is being tested for just that, since its 26-point reaction down has probed under Sunday night’s initial low. That often accompanies knee-jerk reactions to old news, which defines the China and Glencore stories. The open should prove that by barely delaying a recovery when new selling pressure dwindles. Another pre-open bounce might invite a brief post-open dip, first. But not already rallying out of the opening 15 minutes of volatility would suggest instead of absorbing sellers, that the bounces themselves had been absorbed. And despite being triggered by old news, the drop was attracting new sellers.
First Trade…
Exiting the open at 9:45 under 1906.25 would be unlikely to recover the 1908.25 bias-down target by 10:15, which would renew the bias-down signal. Exiting the open above 1912.25 would be unlikely to renew bias-down. Exiting the open above 1919.00 at 9:45 would be unlikely to trigger the 1914.00 bias-down signal at 10:15.
The Universe, week of September 28, 2015… Dodging (some) bullets.
[Note: I publish “The Universe” every weekend, updating my support and resistance calculations for Marijuana sector stocks. It is not a projection, but a handy reference… Non-Marijuana stocks are covered elsewhere during the week.]
The stock market has been ranging sideways. albeit in a very wide range with very wide intraday ranges. I still expect Round-Two of the plunging action that ended August. Last week’s market stories included the drug pricing controversy, which took a toll on Biotechs. So, my bearish picks GWPH and INSY declined, as did my bullish pick CARA.
Other stocks in the Cannabis sector are largely sitting things out. Not necessarily in a good way — VAPE hit my downside target in the .09 range but never developed any bullish behavior, and ended the week down another 50% from there. That’s not going to bottom immediately… TRTC, meanwhile, is a bottoming pattern that has taken too long to resolve, and has instead become top-heavy. I’ll review this again if new lows were to print.
Attractive patterns still include CANN, whose pullback should end this week if the recovery is valid. A new entry is THCZ which shot up out of a basing pattern that is likely to find a second wind.
| Marijuana Stock Universe for September 28, 2015 | |||
| Reference this table during stock reactions | |||
| 4-week | # up: | 7 | 6.93% |
| trends* | # flat: | 15 | 14.85% |
| # down: | 79 | 78.22% | |
| *The percentages of stocks rising or falling over 4 weeks. | |||
| symbol | support | resistance | 4-week trend |
| ACGX | 0.000 | 0.003 | down |
| AERO | 1.000 | 1.950 | down |
| AGTK | 0.000 | 0.009 | down |
| AMMJ | 0.070 | 0.182 | down |
| ARNA | 1.490 | 2.900 | down |
| ATTBF | 0.035 | 0.075 | down |
| AVTC | 0.000 | 0.400 | down |
| BLOZF | 0.130 | 0.340 | down |
| BLPG | 0.015 | 0.086 | down |
| BRDT | 0.012 | 0.048 | down |
| BTFL | 0.071 | 0.232 | down |
| CAFS | 0.001 | 0.011 | down |
| CANL | 0.440 | 0.740 | down |
| CANN | 0.330 | 1.160 | flat |
| CANV | 0.570 | 1.340 | down |
| CARA | 14.250 | 18.870 | down |
| CBDS | 1.630 | 2.660 | flat |
| CBGI | 0.000 | 0.005 | down |
| CBIS | 0.020 | 0.041 | flat |
| CGRW | 0.360 | 0.610 | flat |
| CHUM | n/a | n/a | down |
| CNAB | 0.320 | 0.750 | down |
| DEWM | 0.001 | 0.003 | down |
| DIGP | 0.170 | 0.400 | down |
| DSCR | 0.000 | 0.025 | down |
| EAPH | 0.005 | 0.013 | down |
| EDXC | 0.007 | 0.019 | down |
| ENCC | n/a | n/a | down |
| ENDO | 0.006 | 0.018 | down |
| ENRT | 0.017 | 0.037 | down |
| ERBB | 0.002 | 0.004 | flat |
| ETST | n/a | n/a | flat |
| EXMT | 0.000 | 0.004 | up |
| FITX | 0.004 | 0.078 | up |
| FSPM | 0.000 | 0.250 | down |
| FULL | 3.060 | 3.660 | down |
| FWDG | 0.000 | 0.002 | down |
| GBLX | 0.270 | 0.460 | flat |
| GRCU | 0.000 | 0.004 | flat |
| GRNH | 0.023 | 0.067 | down |
| GWPH | 86.620 | 111.000 | down |
| HEMPD | 0.050 | 0.107 | down |
| ICBU | 0.000 | 0.003 | down |
| IGRW | 0.000 | 0.002 | down |
| IMLFF | 0.100 | 0.180 | down |
| INCC | 0.000 | 0.002 | down |
| INSY | 25.050 | 32.100 | down |
| ITNS | 0.001 | 0.005 | down |
| KAYS | 0.067 | 0.187 | flat |
| LATF | 0.000 | 0.001 | down |
| LXRP | 0.098 | 0.205 | up |
| MCIG | 0.023 | 0.052 | down |
| MDBX | 0.122 | 0.181 | up |
| MDCN | 0.000 | 0.001 | down |
| MDRM | 0.008 | 0.025 | down |
| MINE | 0.000 | 0.002 | down |
| MJMD | 0.000 | 0.015 | down |
| MJMJ | 0.000 | 0.001 | down |
| MJNA | 0.031 | 0.042 | down |
| MNTR | 0.310 | 0.620 | down |
| MSRT | 1.410 | 1.880 | flat |
| MYEC | 0.014 | 0.021 | down |
| MYHI | 0.013 | 0.188 | down |
| NDEV | 0.016 | 0.053 | down |
| NMUS | 0.218 | 1.215 | down |
| NRTI | 0.000 | 0.002 | down |
| NTRR | 0.022 | 0.046 | flat |
| OGRMF | 0.110 | 0.310 | down |
| OSLH | 0.000 | 0.001 | down |
| OXIS | 0.015 | 0.027 | down |
| PHOT | 0.010 | 0.030 | down |
| PLPL | 0.109 | 0.177 | down |
| PMCB | 0.080 | 0.129 | down |
| PNTV | 0.001 | 0.007 | down |
| PZOO | 0.004 | 0.008 | down |
| QEDN | 0.000 | 0.003 | down |
| REDG | 0.000 | 0.003 | down |
| RFMK | 0.000 | 0.002 | down |
| RSSFF | 0.030 | 0.100 | down |
| SING | 0.005 | 0.012 | down |
| SKTO | 0.000 | 0.004 | down |
| SPRWF | 0.082 | 0.165 | down |
| SRNA | 0.100 | 0.185 | up |
| STEV | 0.049 | 0.072 | flat |
| TAUG | 0.000 | 0.005 | down |
| THCZ | 0.075 | 0.013 | up |
| TRTC | 0.100 | 0.165 | flat |
| TURV | 0.630 | 0.89 | down |
| TWMJF | 1.240 | 1.490 | down |
| UPOT | 0.080 | 0.270 | down |
| USEI | 0.000 | 0.003 | down |
| VAPE | 0.027 | 0.087 | down |
| VAPR | 0.000 | 0.050 | down |
| VGPR | 0.000 | 0.002 | down |
| VHUB | 0.040 | 0.059 | up |
| VPCO | 0.400 | 0.840 | down |
| VPOR | 0.000 | 0.001 | down |
| WDHR | 0.000 | 0.002 | down |
| WOGI | 0.005 | 0.013 | flat |
| XTRM | 0.001 | 0.004 | down |
| XXII | 0.085 | 1.100 | flat |
Post-market Wrap… Flat-footed.
[Quick links to the post-market Wrap recording.
and to Monday’s morning bias parameters.]
I should think the title says it all. I wish. But, no, I was absolutely looking for the typical Friday ranging to resolve in a typical Friday afternoon rally into the close. And I was caught flat-footed. The session’s gap up had not been rejected, the overnight high had not been retested, and the afternoon’s bias-up had triggered. What’s down?
The bias environment had not improved since moments before triggering bias-up at 1:20. Had the bias environment lapsed still without improving, then I would have placed a short-entry. Had the bias environment’s lapsing only come within view 10-15 minutes out. Had the selling only waited.
Instead, the plunge began with half the bias environment remaining. And I do mean plunge. Price wasn’t gradually drip-drip-dripping lower, finally breaking the dike. That torture would have been merciful for at least offering clues. No, the first downticks were among the deepest. At least that unseemliness prompted me to tell the chaRTroom the drop had better stop and recover abruptly to maintain potential for fresh session highs. That potential was never to be seen again.
Dropping 27 points in one hour isn’t too shabby, for not having even hinted at its vulnerability. No hint, not beyond it being a Friday afternoon. Perhaps the week’s most unpredictable timing window is becoming more predictable. Recall how last Friday’s expiration fulfilled its bullish bias, by absorbing dips. And the moment the anxiousness of weekend exposure had subsided, Sunday night rallied sharply and extended even higher through Monday morning.
Rallying out of this weekend would be similar to the prior Friday’s head-fake bullishness. Anxiousness ahead of weekend illiquidity is pessimism, which is often bullish from a contrarian perspective. Often, but not always. Pessimism is like paranoia, and sometimes they really are following you starting the next crash leg.
Details and other markets coverage are discussed in the post-market Wrap recording, which is extended to include a bigger picture review, here:
https://roddavid10.mitel-nhwc.com/join/htpbwfy
REMINDER: THERE IS NO SATURDAY REVIEW THIS WEEKEND.
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1936.25 | 1925.25 |
| …would target | 1941.00 | 1930.25 |
| Bias-down: under | 1924.75 | 1914.00 |
| …would target | 1919.25 | 1908.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Pre-close View… Off the radar.
Plunging out of the bias environment.
Fridays are unpredictable enough already. Now today’s choppy sideways ranging has been blind-sided by a 24-point plunge during the bias environment’s last half-hour. And that extended to 32 points during the 3:10-3:20 timing window.
Regardless, Friday afternoon price action is not predictive ever. But it can undermine or simply not confirm setups that are in development already.
For example, today’s original challenge was to maintain a recovery above Tuesday-Wednesday’s “lower prior highs” and above 1938.00. That was created by rallying overnight. Now the challenge is in avoiding a close under 1918.00.
Closing above 1918.00 wouldn’t reinforce yesterday’s recovery above it from under 1899.00 — but at leas it would not invalidate its recovery. Closing under 1918.00 wouldn’t be predictive of extending down, and could be rejected by gapping up Monday, but there’s nothing bullish in it.
I’ve just described in the chaRTroom that this situation is very blinding. The plunge had no history to it that even hinted at its vulnerability, whether for being so deep or so durable. Friday afternoons are Friday afternoons, but clearly holding long into the weekend has become considered to be a very risky strategy.