Posts by Rod David

Was the rally from this week’s lows only a corrective bounce? Did Friday complete it, or is there still room to probe higher? How much higher would trigger higher targets, and what are they? How deep of a pullback would still allow a recovery?

We cover these questions and more in this weekend’s Saturday Review. I also added a new stock to cover, in place of the prior pick that has essentially reached its target. And the stock review now includes the “cryptocurrencies” Bitcoin, Ethereum and Litecoin — which I’ll be covering officially as soon as this week’s launch of Bitcoin futures answers some questions I have.

Between the new Bitcoin futures, the quarterly Fed chair Q&A, and Quadruple Witch expiration, this should already be an interesting week. Add to it the macroeconomic influences of current domestic legislation, and geopolitical turmoil like the Middle East and Brexit negotiations. Rest up.

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The following stock requests were reviewed in this order:
CMG, ULTA, ORCL, X, EXPE, BIDU, ARNA, IIPR, BTC, ETH, LTC

transcript:
hey good morning welcome it’s Saturday it’s time for the Saturday review let’s hear the question right here at the open will will have you doing morning or closing updates on bitcoin Futures I am going to start actually actively covering Bitcoin Futures Bitcoin ethereum and Litecoin I’m not going to start covering Futures if it wasn’t really looking at it you’ll see me checking in here and I’ll comment on it throughout the day if I see anything interesting nothing formal for at least a couple weeks 3 weeks maybe a month I have two widely disparate opinions in my head is too what’s going to come of that there’s a lot of information out there on motivations on structure and it could be it’s going to be very interesting conversation that we have when we have it but it’s pointless really cuz I’m not going to be able to offer anything and won’t be offering anything until they’ve been Trading but we will be looking at him throughout the day absolutely Litecoin had a pretty awesome week this week if they will look at those when we do stocks if you want. Looks like it’s about to break a cup and handle so interesting stuff alright it is Saturday so time for the Saturday review of course we are finishing at 9 for 10:15 about 45 minutes and whatever that is what did I say in the Saturday review link I sent 10:15 anyway pretty quick on the broader Market because it really wasn’t anything interesting this week right to the March contract from December that happens the Thursday of the week prior to expiration every quarter March June September December so expiration is this coming Friday what does that tell us that Wednesday after Wednesday’s close we’re going to have the wet X Red X indicator that is the indicator that identifies if it’s identifiable and to the degree that it is what bigger money is doing or not actually a expiration Wednesday day of the week that’s where those signals are generally picked up if there pick up a bowl so that’ll be interesting because we’re sitting at highs in usual to be greeting and expiration and expiration week at highs by the way if we make a new eye into expiration like if we’re greeting expiration on Wednesday or Thursday then that buys the rally even more downside protection usually it just continues in the prevailing uptrend but if there were an immediate reaction would be likely to recover I close on Friday is going to be happening in front of us whether that means affresh high at 6726 6725 up to 2673that means that this has been or is about to be the end of the last correct about here’s the issue we had a lot of news in here of course that we’ve already talked about the last week we had a couple of days couple 3 days rallying amid headlines or news stories that continued to make the tax reformlook better and better which of course brings the previously passed house bill to committee with the Senate so they can hammer it out and then vote on on the compromise of headlines on the way they made that more increasingly likely before that could happen came that eventually erroneous report on exactly what general Flynn was planning to do proper and exchange for what many viewed is a lot more lenient plea and that was proved wrong in fact we had a pretty good call on that early on and didn’t even need to because news related stories reactions need York reactions to new moves almost always retraced entirely so when we last talked about this last Saturday we had stopped short of completely actually had stopped at break even for the day but it stopped short of completely were tracing the origin of the news which we knew was going to happen or had every reason to expect would happen and expected if there were as expected as anticipated passage of the Senate bill over the weekend that there’d be a relief rally on that and at the relief rally would fail relief rally because you have to have a favorable reaction fail because the prior week and already rallied to Discount the news to Discount to work into the price as it became clear and clean her more and more sure that would happen what value or pricing would be appropriate for that and we did Gap open slightly above to touch the fire how I before bouncing back to fill that Gap there’s no unfinished business above 2657 25 and it’s 2651 both times 2657 Target that was put into play Above 3175 both times at 5725 has been tested and it has failed to maintain about 51 and that tells us that this area is distributive now it is possible just artificially because of the negative story false or not it had a very real effect on price it is possible that that did service to correct what needed to be corrected when it gotten ahead of itself but I came back so quickly I’m dismissing that as being a correction now we look at this reaction down into midweek as other problems arose just on again off again or reports and retractions of brexit talks all that favorability when should they pass the Senate bill then we got to see the other headlines come out about what kind of problems they might be having in moving forward to Senator that says I’ll vote on voting for it I’m going for it because I’ve been promised such and such and then the senator comes out later and says by the way I’m not voting for it if I don’t get such-and-such the market respond to that wants to respond and corrected we had an overnight correction 2620 on Tuesday night ahead of Wednesday’s open inverted Head and Shoulders down there member overnight action doesn’t influence in 15 minutes and then the markets on its own and the opening 15 minutes of volatility the neckline of this inverted Head and Shoulders didn’t break lower it was an equilibrium day so it had a lot of volatility to itequilibrium because the prior sessions close was right at 6:35226 5725 got a Line in the Sand here it was tested again head of Thursday’s open frankly as I’ve said as I said at the time and since then it is surprising that that did whole it was surprising that that did all good because that held that told us it was optimism in the market maybe not the most trustworthy although it did it was productive but I do consider this leg because it’s. It originated from having stopped short of more thoroughly testing at least Wednesday mornings lives if not probing Tuesday nights or Wednesdays pre openload 2620 just to establish more solid tested at low I do consider basically the fruit of the tree that the product of that what I’m going over the optimistic low inpatient buyers then to be contrarian or country contrary counter trend take a contrarian perspective to this kaptur trend move and will be looking for it to pick up sometime and it fits back into the narrative that fits that fits back into the narrative that this is a topping pattern that this rally is a correction this is a measurement just of the inter de idolo 61.8 room for noise around it begins at 2653 plus or minus attack which we got to and held yesterday overlapping it but it clearly defines the upper end of yesterday’s range so let’s drill down on this let’s go through the process of assuming that this is the peak of a corrective bounce because of this leg has now been corrected then it has nowhere further to go up but we happen to left outstanding Yesterday by a 26 650 it was a late Target but it wasn’t rejected despite having the opportunity to do so it was a Friday afternoon which did drift into the bios of an exit so again even tried to reject it and didn’t do so so we’ve got to give this 2660 50 objective pretty big benefit of the doubt that at some point it’s going to be mad that there’s buying pressure in there that doesn’t have enough counter or contradictory or countertransference worship to take it down to avoid it if there is a pull back then we’ll look for that to be tested at some point but let’s say this is the end of the corrective bounce and this has to be met at some point then we do look for some pool back in the interim still has room for noise above it not just from unfinished business from other patterns but just this basic 61.8% measurement the outside just to eyeball it the outside of room for noise above a 61.8% retracement is his double angle of its inverse the 38.2 in the 68 basically gets us in that area so that works we can still view this as a corrective bounce it’s not optimal that the 6118 is exceeded but it’s possible and to still be part of the corrective bounce which by the way if that does extend IR doesn’t stop at the optimal uses up the room for noise while simultaneously satisfying buying pressure you can imagine how that reacts not just SSS that is not just suddenlybut mostly steeply and potentiallyalternatively if that is left at standing at 2650 is left outstanding and this corrective bounce in the minimum room for noise around it that’s been tested and held if that proves influential there’s room easily room to pull back to its inverse which happens to coincide with lower prioritize natural support if that would have happened first little bit of room for noise under it Baytown to 2640 and this would be our objective back to 2660 50 could be a different pattern by then depending on how this is approached lower prior highs join down on that moment what is this look like having basically fluctuated sideways or flat to hire with an attraction back to lower prior highs below Monday’s open could gap down creating an island not a classic Island because it’s not extreme exactly not a classic Island because it’s not there for it wouldn’t require being retested eventually what could happen they’re more problems what could happen here I should say just to generate that gap down negative news on the tax reform front there’s some Uprising forming uprisings forming for uprisings forming in the Middle East because of this week’s announcement of moving the US Embassy in Israel to Jerusalem Shaun the macroeconomic geopolitical brexit seemingly that doesn’t need to be retested and 26650 which were giving a benefit of the doubt to is not going to be a going to be a deal-killer to Breaking lower having said so the premise is that their test would hold be the alternative is if that test doesn’t hold its because there’s something fairly substantial under way to the downside there’s no middle ground Monday won’t be down here just to fluctuate sideways extended period of time correction it is possible scenario really goes out the window if we get out of the room around the 61.8 you know we’re already dealing with 2667 6725 would be in play and probably 2673 if that point as well to come in on Monday without any kind of a gap down or Challenge and will be looking for 26 6050 and the resolution of that will be our next predicted value alright that’s what kind of the Market’s remember remember we’ve had some interesting some interesting alignments misalignmentsXO ES there’s 3175 which was the penultimate Target for the rally the next hour Dragon was put in the play Above It but not rejecting it or bikes eating it but it was never exceeded through close to put it into play it was part of the same clothes the same sponsorship 2657 25 probed reacted attacked Arlo and here’s that CS it’s our control group 500 stocks only representative of a cross-section of Industry how much would be the DOW Industrials the most among the most liquid widely followed longest existing consistent revenue and earnings and predictability and boring and Blue Chip and safe if you’re relatively safe if you’re a money manager of any sort that has to be in stocks doesn’t like at the moment to be in stocks so wants to be in the safest of stocks are in the Dow so we look at the down as a control group we look at the attraction Safe Money the safe mentality got to say that there’s always money that’s your marked as safe it’s that that your markers shift how much they want to hear Mark is safe at a given time and it looks like they wanted to be very safe here’s that rally into tax reform weekend much more substantial than ES here’s that recovery coming out of the weekend on the passage of the bill where is gapped up and then fill so did the DOW but the Dow but it sounded finished falling for the day was still pretty much at the highs and now we’re 80s is not even back to its prior Heights pivotal High you can see that the Dow is outperforming still here’s that middle day of the three-day rally in the tax reform weekend where the ABC botched story headline comes all the way back down to lower threw it down to 2605 which was a big level another lower Pryor High that was put into play as we talked about that morning Friday morning getting close to this last set of lower prioritize but there’s a recovery and it’s not so high there’s the reaction coming out of the weekend last weekend with the Senate Bill passing much deeper pull back so they’re still attracting ndx 100 stocks that are still among the most liquid while still being gross stocks still having a great deal of coverage but you can see the vergence among the coverage but the key is liquidity because trying to discern where big money where big monies sentiment is if small-caps suddenly Rose suddenly everything that really wouldn’t speak to Big Money what they’re thinking that’s not their money making that happenbut in case eitherbut it’s been on defense a nice reaction happen to the weekend and Ice reaction up that has tested higher prior Lowe’s and this is an interesting setup because here’s a range prior range higher than the current market the lows of it the prior lives being tested as resistance natural resistance just as lower prioritize put that under performance through the day from testing air fryer Lowe’s that under performance through the day gapping up as did the DOW and Bs recipes but yes and traded flat to hire still money coming out of speculative positions among big money Players still rotation out so I don’t see anything in here that has any greater suggestion of if there is an extended rally that it is likely to endure be durable under its own accord just organically this Market is distributive rotating out of water based out of more speculative growth and into the safer relatively safer and so move the deckchairs on the Titanic any questions anything else please let me know if you already requested there’s a couple I’m going to throw in here and I’ll do to from everyone the first to icr I’ll do those and circle back around if there’s others actually have a new one I want to share as well please thank you the fact that it’s not this company is into biosynthesis of CBD among other things love this chart that’s not to say it can’t collapse because all this volume X this price could be could be squashed in a moment let’s go ahead with Chipotle so Chipotle is come up to the precipice how to buy signal it was tested just never got out of it and the pull back into the range that was really never left it was still on an ongoing downtrend lower lows lower highs never came in with that with my pill to lower the Buy Signal this might be a January affect candidate and it’s certainly a January this is multiple years of decline it is making a new low in NovemberI like to see in December in this particular January 5th excerpt of candidateI like to see either a fresh load defended or a higher level that would be problematic if that were to develop after probing a fresh High because this is the ongoing downtrend this was a low when it printed this is an actual though the actual load it went on to be and if this leg probes above that last that interim High and then dips down to touch that what is the prior actual low the pivotal low at this point that’s going to require fresh low it hasn’t yet broken above that interim High so this can dip down and attack that prior low and not be required to produce a fresh low and still recover what’s it probes of fresh High it has to stay away from that prior load at pivotal low what 292 to avoid being a to avoid requiring new Lowe’s it does seem a little aggressive and its recovery so I can’t get to the middle to this recovering to this already rallying If This Were to start putting in a rally I really want to look for a place to sell it may be as high as not so bad a hundred bucks 33% higher maybe a little aggressive 390 to 4:15 though on a bounce could be as low as the last cell signal to trigger that 368 unfinished business below with the Gap back to this open it was tested after a while or often but not since touching those that’s when that’s going to be relevant so probably a little premature to consider a bottom as having will definitely consider him as having form and premature to be too trusting and any follow-through near me but it is going to be on our radar keep bringing it up as a potential January there’s a complex ascending triangle that is a triangle that forms a pattern that forms off the prior extreme without incorporating that prior extreme and its own formation and that typically leads to Peak or extreme the minimum objective was to retrace the entirety of that pattern which it has and breaking under that has created lower objectives at least the 187 which a 2760 which seems they’ve been touched here so there’s potential for this to be a low this is not a January of that candidate so there’s no particular timing in the year-end that really matters so much but this is a critical area so that’s not enough to recover 252 243 80 this is basically the make-or-break to get down to what would be a more substantial Target of course at 160 160 area or else to be done with the correction and again I’m going tobe switching back and forthI have some others to throw out as well we will be looking at that Bitcoin ethereum and Litecoin very I don’t want to say superficially but not terribly in-depth cuz we’re running out of time here but Oracle is the same old story not overly optimistic cuz it’s being productive with that optimism but he’s pullbacks are very shallow and not really cleaning out sellers before extending higher so the extensions hierarch quickly peeking but they’re consolidations are resuming resolving up the question is will this complete a more thorough pull back in the 46 area before trying to Rally or will this rally back to unfinished business above the Gap outstanding to fill it and then have all these attractions below because of the shallow overly-optimistic fullbacks and on the outside of course closing at a new high taking out that Gap couple and suddenly the extended because something more substantial maybe underway the Nets not a very easily predictive in the pattern you can just see all the overlap it doesn’t even know what to do with itself it’s not really a consolidation at this point it is holding some very relevant turn away from it entirely but so long as that continues to track down to it really the pull back limit is 4875 which has been broken not to say it’s holding very well it is constantly being tested but if I had to have a parameter on this then I’d say 5075 about 5075 wood Target filling this Gap and probably Target at probe of it to 5345 sowbug 5075 wood Target 5345 could be a potential top in that closing any higher would put into play higher targets under a 4770 which is essentially there’s a bigger test coming at 46 us Steel there was potential for a 1770 because it did get to some room for noise around it but it’s clearly taken out of signal and presumablyhike cell number levels hear that if recovered would be increasingly likely to be extending the new high-rise that is 3225 being tested now 3555 what could derail thisyeah what could derail this would be the clothes back under 30 60alright let me know if that’s not clear Expediaso this is a failed ascending triangle 10 ascending triangle it breaks higher and then fails fail descending triangles are pretty serious stuff they’re not playing around but they’re also typically only temporary and they are corrective value similarly Head and Shoulders head and shoulders are called reversal patterns because at 2 usually or slightly more often and more easily viewable or visible especially to 2 Broad mainstream viewers that they tend to reverse price down the road is done it’s not a small thing to recover to the to the failed pattern which has been done and once that’s done once that’s recovered 2 and threw it really needs to be the end of it this wasn’t the end of it so that’s a problem that is lower prioritizing here they’re being tested clearly clearly being influential a little bit of a pivot reversal in here levels just looking at this fresh I’d want to be long above 1:37 or short under 109 55 how does this pattern this current consolidation seem intending to resolve is there any preliminary level that could be taken out this is still a lot of Grey area down here non-committal under recent bows down to 109 55 still being long having held through this but it is taking quite a bit of time to recover actually non-committal gray area no man’s land first and then recover that’s the most ugliest but if that’s how this resolves itself having been unable for so long to resolve up just needs to stretch that rubber band snap back up and does snap back up with this attraction at CNE would be the minimum attraction minimum consequence of reward and probably on its way back to the origin of the entire Fiasco at that time but there’s this much room for that so I don’t know taking a fresh I how attractive that would be by do any others please go ahead and post your stocks if you have any others okay so Baidu came into an interesting windowglad you came into came into an interesting window we were just talking about Head and Shoulders how they tend to resolve down at least that’s how mainstream viewers expect a head and shoulders resolve down and when it doesn’t it’s a failed pattern technical analysis doesn’t work very often Head and Shoulders patterns resolved up first before resolving a reversing back in the opposite direction there’s somewhat of a head and shoulders character to this which is why we had to buy signal identified above its shoulders that did play out and room to test its neck line that held as support that neckline is still relevant the neckline is still relevant and it’s break would still be bearish weather down to 181 or long the way down to 194 another one of these issues that has left outstanding a gap up and it’s a little tougher to go by because this is in a sense and 80 are there is some local currency conversions that I don’t contemplate or calculate Head and Shoulders is certainly being retraced and if it’s a shoulder line gives way more volume intuit’s test then less so it is threatening to give away then it does seem like this is intending to to test 214 and then to break it until it happens because of that outstanding above and the potential that it be filledyeah I would say that’s room for noise down to 222 under 222 I be much more confident that 2014 is about to be tested and I just don’t see anything good coming of a test of 214 okay any other stocks please post them I wanted update arnoult which has basically hit my Target and that’s 32 3225 still being attacked but we’re within pennies literally and the reason why I’m micromanaging that is because we have yet to see volume improve that was an accident waiting to happen when it came in to earnings the one thing that is impressive is that the earnings reaction was so quickly absorbed and recovered and reversed Now by a complex ascending triangle which very often will reach a peak and hold it and that Peak is coinciding in the 3225 area but a dollars worth of room for noise around it maybe something else is going on remember what is the underlying my underlying premise but was it too or no this was a reverse split don’t even remember right now if an 10 for 1 or one for 10 that is and that made it suddenly attractive to institutional buyers he wanted to be exposed to the Cannabis space so these Start Community Choir peace now that is a concern as I say that it’s not getting the sponsorship here’s the other one that I wanted to inject in its space and it’s place I should say this is still in the Cannabis space it is it is a real estate venture that leases their exposure of course beyond what is what is their own customers liabilities with all the regulations with all the unsettled law or law in flux cultural mores Etc they lease the land and this has come back to touch a Breakout and from a higher high hold that breakout level that’s just noise and challenge the Pryor High two relatively new issue but it’s a very large base and again not of January effect stock nothing January fact about this alright we’re running late for my schedule but I am going to and I promise cover real quickly Bitcoin ethereum and Litecoin I don’t have it on the package here’s what I’ve been using is tradingview so Bitcoin had a hell of a week we talked about it last where my last bicycle appeared and then also how the charting is so beautiful as last week when we talked about it I’m is very responsive to patterns there’s a breakout that consolidates pessimistically short of the prior high and it’s just a natural to resolve up what you did and then had a huge pull back back into that range as the week began yo this is Sunday by the way so the most substantial moves happen over the weekendthis was an explosive week for BitcoinI’m sure there’s some way to make this go away go now look at this very clear patternjust networking okay well there is a triangle I’m going to have to use my own tonight nice symmetrical triangle initially breaks falsely in One Direction reverse is more substantially in the opposite direction or at least in the opposite direction that is just enough to be more substantially so it is possible that this pattern is going to extend to Fresh eyes this isn’t actually the coinbase there’s coinbase which is another Exchange which is a more liquid Exchange go back to bitstamp you can see the differences among exchange this is just one of the reasons why I need to watch Futures come out and make order of this see what effect it has on different exchanges tightening up there their spreads but too much to virgins right now among them I’m so tired I could decision and this is why the Futures Trading should help me discern whether or not to or decide whether or not to follow multiple exchanges or just stick with one at cetera etherium already broken this is last week satisfied as Bitcoin was going nuts in fact both were drained rotation Maybe but in any case little bit of a cup here since this helps a little bit of a cup here nice volume Contracting into it but not happening in a vacuum it’s still pretty heavy come out of it for my handle and that’s taken off this is actually the ladder last night that’s a move from 463 to 5:18 it’s a 10% move overnight Litecoin came in before the end of the week yesterday also having sat out the Bitcoin surge and then took off Friday and now taking off even more so this again overnight this is yesterday’s high 143 overnight got the 200 that’s a double since I could say yesterday but since Thursday so again definitely going to be covering and we’ll be looking at throughout the day at different intervals nothing scheduled these charts and are these productsbut their futureformal coverage won’t begin until it’s become clear to me how that’s going to impact the different decisions I need to make his two what coverage to implement exactly suggestions along those lines you’re welcome to that’s better okay thanks everyone for being here finished and done thanks everyone for being here I appreciate you taking time out of Saturday morning good and good or interesting stock ideas please keep bringing up chipotle I’ll try to keep an eye on it as well as of January that candidate if it bounces first has a short candidate and meanwhile will be open tomorrow night at 6 Eastern for the Globex open see you there take care of everyone