Saturday Review’s recording (for 12/2/17) …Poke the bear.
Friday’s plunge was retraced almost entirely. That was after it neutralized several attractions below. Saturday Review examines the potential to reward Friday’s buyers with a retest of Thursday’s high and higher. Specific upside levels are included, and downside limits whose breaks would still indicate Friday’s incomplete recovery wasn’t being rewarded. Meanwhile, the bigger picture comparison of Dow, NDX and S&Ps suggests that speculation was already waning. So, regardless of that immediate resolution, another downleg is appearing on the horizon.
The following stock requests were reviewed in this order:
BCS, SQ, CRM, UA, BAC, ORCL, AMLP, RAD, KSS, JCP, JWN, SHLD, ARNA
transcript:
alright let’s get started on this morning Saturday review it is Saturday it has been a wild week wild couple weeks almost so not a rally in a vacuum actually there was a range the range by the way held on by the skin of its teeth at a very relevant level that have been chipped away quite a bit 2563 75 being the relevant support and just to prove out how relevant the support was at 6375 the only way that the market was going to get out of there without first forcing the downside the only way to get out of there to the upside was to do so aggressively in other words the only way to avoid falling into the pit was to jump and a jump very high and very quickly not really suddenly but that’s where the timing was sudden Steep and substantial and so that has created room to help absorb selling pressure that rooms is sorely needed at this point because we had to hire targets to higher potential targets coming out of the coming out of that pattern or if fresh eyes were there’s actually room for noise above the 25 9050 to test 2675 and you can see the influence there a week ago getting out of of 2600.75 with next Target 26 3175 and 26 5725 3125 or 3175 and 57 25 2590 50s Target handheld over the course of two or more weeks before breaking out so pretty substantial targets being mad and being that pretty aggressively and a very short time frame so the market was vulnerable the point is that the market was vulnerable vulnerable the rally was vulnerable to reversing down or two at least pulling back its sponsorship having been satisfied not just meeting its objective meeting two objectives meeting two objectives mean the second objective without having any time or room to refuel without a pullback here’s the 2590 50 objective being that and here’s refueling hesitation reaction down pull back one false step here and it falls into the abyss that’s how much selling pressured been expended enough to the precipice if that dangle its legs over the precipice without falling in no such thing at 2631 75 clearly influential but not anything substantial before extending higher sothere’s just no no sponsorsthis sponsorship no reinforcements and that made the market vulnerable I listen to that vulnerability because it’s news related the actual manifestation of that vulnerability reacting down it was me one moment hereso this is the session that fulfill the 26 5725 Target during the noon hour so over by the tire size but 1 minute and 3 minute or so I simultaneously overbought at the High which normally would require retest did not and do not no requirement to retest that high which actually is 5850 but the reaction down from there was just organic buying pressure fulfilled there was a little bit of a news nothing really pressing the price did not have any buyers to support it into the clothes so the next morning and by the way 5725 2657 25 Target that could have led to another higher Target just has 2531 75 Target led to the next higher between 6:50 7:25 being put into play had the reaction down from 5725 not been so substantial is to break under 51 2651 maintained as support even if it were substantially at your day just recovering it through the clothes would have kept alive the upside momentum 2651 was not recovered in fact set up into the clothes that we knew would run into resistance 51 so pretty much had an early indication that the upside momentum was done that could have resumed Yesterday by gapping up through 2651 and extending higher and it’s not without trying that’s why I 651 was not recovered it wasn’t recovered in time to trigger the bias up at 10:15 although it was attacked within several minutes could have been recovered through 10:30 to invalidate the fact that it had not been recovered that it wasn’t recovered through 10:15 the buyers were shut down or at least limited and have there been any probing about 51 which actually there was potential then 5454 5054 25 would have been the likely objective nobody has trending doomed to failure but that would have been the likely objective as it happens news came out we’ll talk about that in just a moment but again just to refresh or reiterate that the reaction down was not just a product of the news that triggered it but also that the next higher objectives had both been satisfied in so short of a time frame without the 3175 objective haven’t had a chance as the 9050 injective head had to refuel buyers were literally totally spent so did the reaction reaction exacerbated by Glee just a normal reaction to the actual knew that it was misreported as being a as being a crime committed a crime committed during campaign. For Trump as opposed to lying about something that is not a crime that was done after the election had already been had already been completedso you can the market spoke to thepirate racing the unchanged not back to the eye drops origin which knee-jerk reactions to news often Dura Trace back to and then through the origin of the knee-jerk reaction something we’re still anticipating and because of that extra refueling because what even if strong hands were on their way to pushing price down maybe their objective is even lower than 2605 because there was news that triggered a knee-jerk reaction we candid sponsorship is the if you look at this this is we can’t its sponsorship this is not strong hands no there may have been some strong-headed dumping based on the rhodius reports or headline quite possible but we can’t consider that the origin of the news of the knee-jerk reaction to the news pretty much always retraced and then some because those weekends that crowded out strong hands it’s not enough to just retrace the entirety of that reaction this is now refueling this is now refueling so we’re looking for a retest actually at 5725 or looking for some kind of a probe 5725 that’s the likely or scenario expanding this to include overnight action and you can see that overnight this pattern has had or this Market has had some instances of overnight dips that have made a difference that have been last relative Lowe’s since this last overnight death November 15 pre open the market hasn’t traded that low here’s an overnight dip prior to that I’m sorry that’s not right lower than that other than to momentarily hold the test no breaking lower no reversal so it’s possible that we get a retest of in this market that is with this sentiment it’s possible that we get a retest 5725 with a fresh High that’s done overnight and that that satisfies the upside so will be on guard for that if any morning we come in and there’s been a fresh hi and that fresh High overnight extreme opportunity just isn’t complex if it’s a single probe of the prior sessions hi that’ll be a reason to suspect for reversing down the actual signal just as an example if there were an overnight probe of a prioritized about 5725 and it wasn’t complexed it was a single probe or multiple problems but all retracing back under 5725 and the overnight low or being broken into the open that would be our cell signal or optimal cell signal anything else is going to require some more time establishing a that’ll need to be broken what’s another story that might get that done currently developing is tax reform when we come in Sunday night if you’re coming in Sunday night may be greeted by a relief rally after voting in tax reform after finally clearing that hurdle then whatthe last two days prior to Fridaycall one and a half days Wednesday and Thursday morning were seemingly all about tax reform different Senators coming on board different deals being worked out announcements being made that’s pretty much discounted in the market and discounted has different meanings what is a financial term meaning that the valuation of it is already reflected in the price I think from a technical analysis perspective what we really want to focus on in the meaning of discounting is that a major portion of Market participants have already had the opportunity to express that sentiment they were going to say it’s a major portion because they were pretty productive they broke out of prioritize they fulfilled two objectives in a short. Of time there’s substantially way from the 20 2601 or 25 9050 prioritize prioritize jective substantial portion of Market participants have already expressed their sentiment favorable sentiment discounting the likelihood or their anticipation of the deal being voted when it’s actually voted in then how much of the market is left to express that sentiment and after it’s Carol like this how many are going to be waiting to take some profits on that so there’s no other favorable news anticipated to follow on the heels of that then fresh High whether it’s overnight or entered a fresh High retesting 5725 even though it’s not required to be retested he is going to be an opportunity for pull back an overnight high again it doesn’t have any complexity to it and doesn’t require a retest and is reversed by the open to be chipping away or probing under its overnight lows earlier overnight lows that would suggest top is already formed otherwise after this much refueling this much refueling which are described in just a moment after this much refueling there is potential to stake out a little bit higher next hour of jective isn’t if 5725 is recovered through a closed the next time jective isn’t that much further away before it begins to be satisfied just 10 more points very similar to 2590 50 his room for noise was 2600.75 next room for noise almost 10 points higher than 5725 at 67 get out of 73 and that’s where the next objective is put into play and it’s substantial into the 2700 handle little bit of interim potential at 2700 basically 2698 what if the market immediately begins down trending the beginning of the week what would cause that to happen maybe not getting the vote maybe another delay or having to walk away from it there’s certainly a pattern of that with the years other big legislative attempts as I said I was going to describe or examine more closely the refueling that took place Fridaythat’s necessary to know about to understand how much deeper and why negative reaction could delve much deeper member 5725upside potential already satisfied at Target so it doesn’t have to be requested it’s likely to be retested if this leg has in fact we’re fueled buyers which will know if and when the origin is retraced if bigger news doesn’t overwhelm at a minimum the knee-jerk reaction down has recovered to unchanged it it actually looks like a recovered in the positive territory versus Thursday’s Futures clothes but actually Thursday is cash that stand close was basically 2646 75 so a little bit more potential there but essentially back to unchanged not back to the origin of the knee-jerk reaction until that’s actually probed it hasn’t in fact for fueled buyers but what was being done is talked about during the market to her before the open the normal just organic pull back would have found support in this range in the gaps Rings that’s not an air pocket air pockets are not formed by the lack of previous training air pockets are formed by overly trading an area so the more times you see price cross within an area across back and forth up and down the more it has chipped away at support and resistance the more that is an air pocket here is almost Uncharted Territory the natural support being basically a 61.8% retracement it’s a little more detailed than that but a 61.8% retracement into that Gap area which in fact was the low overnight prior to that news so that would have sufficed but that was chopped away not chipped chopped away as we discussed Wednesday afternoons as the upper end of Wednesday afternoons range which itself was a struggle to avoid dipping any deeper to fulfill its outstanding objective of 26 1750 that would be tested again after having Pro after having resolved back above its session High if Wednesday afternoons range were Revisited again than any unfinished business that it had left outstanding would be immediately in play and it was attractive immediately actually to within 2 or 3 to 6 and no reason for that test to be made so no reason for that to hold other unfinished business below 2609 75 r s i s m l taneously over sold at Tuesday afternoon’s pullback low that’s not support that’s just an objective the actual objective was 2605 if this Wednesday afternoon rain driven touch 2605 would be the objective 2605 was touched at the low could have been probed buy a few points it doesn’t it’s neat when it’s precise when the market behaves precisely but that wasn’t necessary to send the same message that message being all those down side attractions are fulfilled so 26 1750 don’t have been left outstanding over at 2609 75 and even then what would be the room for noise under those attractions down to 2605 all touched all held all recovered before the clothes through the clothes sellers gained no traction for that effort which expended a lot of selling pressure so how is that potentially potentially obviously because all that selling pressure is gone satisfied and almost in the blink of an eyehow is that potentially barish because there is now norevisit these levels not to revisit lower prioritize from Wednesday afternoon the 26th 1750 unfinished business that from that session that’s now neutralized or oversold are a size at 2609 75 visiting those levels would suggest or risk that sellers are we gaining traction and buyers aren’t exploiting all that selling pressure having been satisfied now there is still potential just as noise for a pull back for a replacement Friday’s recovery we’re not going to go through the specifics of that other than to point out that if there is a dip if there is a reaction down it’ll just be coincidence that it happens to be touching Wednesday’s 2626 or 2627 lower prior highs you’ll just be coincidence so long as it’s recovered back above a relevant level through a relevant window so if overnight there’s a dip touching 2627 and it’s recovered back above that sessions High 2634 5325 that’ll be bullish to have contained or isolated sellers as an example but start breaking lower start testing lower Pryor High start testing features of previous sessions that don’t require retest anymore at without rejecting those tests before they open that’s where the trouble starts as far as resuming the rally as far as even retesting the high should be interesting and should be opportunistic there should be opportunities to trade off the levels but it’s not going to be predictive until a timing window and irrelevant timing window passes into relevance and we get to see how it disposed of a test of a relevant level we won’t have any new information predictive of the next direction or the risks risks in either direction but it is certainly possible that this is the beginning of the end retest of Thursday’s High which isn’t required is disposed of isolated to some irrelevant window and reversed under some back under some relevant support in time to be predictive of momentum reversing down that’s really the only into higher highs it’s tough to see this pattern immediately resolving down durably having satisfied so much pressure already it would have to be in reaction to news which action news wouldn’t be durable it would have to be done overnight which would leave outstanding the Gap back to Friday’s close wanting to be filled so unless something so powerful is Friday’s low through some relevant window or started chipping away at graduate we’re still going to look for Thursday so could be a very compelling by and that had formed until midweek last week not the current week before breaking iron to Thursday’s High and was itother than cocaine in the recovery basically coming up strong about the 6118 or Trey Smith of the drop still shallow still leaving some room for noise above how about and q’s the speculative attraction for big money it has been doing very strongly outperforming es and the Dell really making up for lost time in some respects but a performing none the less but what happened last week last couple of weeks here’s that same basing through midweek last week that broke higher Wednesday and Thursday that’s all right there we go that it broken higher into last week and never recovered into Thursday’s rally was a retrenchment 6118 retracement correction done this is incredibly important two virgins from other indexes we’re going to see the down a moment but just compared to the control group which is the ESC S&P 500 these hundred more speculative relatively more speculative stocks this isn’t the Russell this is still large-cap widely followed established companies to some degree to a great degree considering that they still don’t have the greatest predictability and income or Revenue I’m sorry revenue and net income so there had been a lot of interest is one thing that it kept alive the rally in our minds was that the speculative fervor hadn’t died out or was actually reborn after that last consolidation that last topping a few weeks ago but now speculators or the speculative side of the institutional Market is pulling in there raining in their horns again and Qs ES so is that money rotating anywhere specifically like who’s outperforming this is the Dow 30 stocks polar opposite while still being stocks while still being highly liquid otherwise polar opposite to the speculative MDX and cues in the minds of Institutions fiduciaries Etc they have to be in stocks Maybe by prospectus or some other directive or they still want to be committed to the market but not in the riskiest area that is still available to them but why do we followed more predictable this 61.8% Friday actually got up to its room for noise he has left some on the table the Dow outperform the Dow is attracting more money than the broader base control group the S&P 500 Friday actually had retested Thursday’s High where he has did not that created a little bit extra room to absorb selling pressure but that selling pressure only came into lower prioritize Wednesday’s lower prioritize compared to the ES which Pro gundyr Wednesday’s lower prioritize Wednesday afternoons lower prioritize on the way basically to Monday morning signif the performingmoney Morningside it would have lost twice as much intraday so relative a performance so now they’re big indication that sentiment where it matters in strong hands is making a turn shifting and it’s doing so while markets are standing at the as I was saying earlier or have been at the precipice dangling their legs over so field we tested the high or backing and filling shut that is distribution at the highs over the next several days that could have a very serious effect of the downside a resolution to the downside okay any questions go ahead and post them let’s go ahead and start looking at stocks of Interest couple of course that I want to update as well but let’s go and starts you don’t need to limit your requested to I’m going to do the first two that I see from anyone and then Circle back around if there’s others Barclays it’s almost had an opportunity here to reverse the trend lower lows lower eyes it’s not just a matter of them producing a higher high which this was one year ago but then to reduce a high or low which would have been and could still be I shouldn’t say it’s off the table but the higher low the last relative low to the last relative High from March of last year March was at April that 8:16 815 so so far that’s a higher low and we’ll know what the degree of certainty a great degree of certainty that the trend is reversed and recovered through a closed that’s 12 closing a major Trend shift in Barclays otherwise or until then we don’t know whether this is just a consolidation waiting to resume the decline calculable e 9 needs to hold 9 913 calculator turn predictive reflective but so that’s where this stock is the last touch yeah touched indicating a couple of consecutive for would signal and confirm the minimum objective would be to retraced the entirety of that trend line the minimum exposure the origin of what could then become a trend reversal on a close above 12 under 9:39okay Squarewhere is gone into into hyperdrive it really need me to tell you that when you can look at the truck but just to put some numbers to it 3330 the to 61.8% projection of basically the low needed to hold a very narrow pullback limit which is dead 168 and that has allowed this trend to extend and it doesn’t mean just prob’ly fresh High that means taking multiple of this trend and use that to identify the next time jective so there’s resistance all the way I’ve been with this one but this is a resistance influential as well it looks like having attracted to Gap up but ultimately if this is going to extend then it’s objective is essentially 7385 7390 so there’s potential for a double in this pattern so long as 3168 3109 hoses support optimal 8:30 this whole range of great importance begins at 35 6061 under 4290 haven’t confirmed under 3926 before being able to at least have to actually enter into this range and once this range is entered into back above 3926 would signal that the rally had resumed and yes confirmed 4291 and it’s under a double from this range under 31 this is the pullback objective it’s also a pullback limit I can’t speak to what the character of the reaction would look like if we’re just to continue on interrupted and break under 31 actually that would be bullish more bullish and bearish because it’s what essentially be the first reaction down for the previous friends on the way to break and go to 3131 or 9 this word to back and fill and refuel then I’d be concerned with a break on 231 which I believe is in Barons today and they’re pretty favorable toward it that is this week it just came out todaykind of sloppy up herevery weird pull back a year ago but see if we can still make sense of that if there was some kind of a paradigm shift in the stock beneath the surface year ago who takes on a different character there’s some remnants of the previous pattern but quite so I can give you a yes that’s the highway maybe I’ll be there is I can’t call for noise really but just that whatever is sponsoring this excess this excess leg above 9758 may have been satisfied at 109 18 and is now struggling to hold 104 needs to Old 104 support to maintain the upside potential for extending even higher so long as it holds this pull-back and recovers a 18 then that was not a substantial top so the next bicycle would basically be closing about 109 18 without it closing again under 104 are the low of this range that’s testing 104 if this turns into a more substantial correction it has room down to 9365 and probably would test 93-65 before being able to recoveras the drop persists and there’s a long way to go to even begin trying to reverse the trenddid attempt to try to reverse the test if it’s red with a bounce to 1465 get out of 1560 and the attempt might extend even higher back into the 1865 area still not a good base in here at this word of develop immediately the likelihood of becoming something more substantial to the outside very low Bank of America interesting big volume increase chest size but it’s a ride into writing to relevant resistance what was that close so 2810 was contained reaction down from 1.8% projection of this pattern 2841 recovered through the clothes that’s what matters is the closing price and it recovered kind of a head and shoulders pattern 61.8% projection and then some other percent actually reached at the low so there’s a little bit of a trade hear back above 2825 sooner rather than later but that would that would Target 2947 and potentially 3084 2802 through the clothes that should be followed through if it were to close higher close above fresh eyes that is above this week size then that puts into play at basically extends the rally remember extending doesn’t mean just printing slightly higher highs it means actually leveraging or duplicating almost an entire leg and in closing at 8:02 2802 down to 2750 that would seal a top I can’t make that and then closing under 2750very shallow hovers optimistic we short of actual support and it affects Ali optimistic for a while because it doesn’t it’s not exploited then it’s Target is exceeded more optimism excessive optimism and by exceeding its Target it runs out of sponsorship and as soon as it gets it together just within a couple three sessions it runs out of sponsorship again that doesn’t mean to tread does reverse down having dipped back down as far as it has closing back about 4940 should put into play a retest of that high of August Hai which cell or September side which itself left outstanding a gap back to 5279 so I’m reluctant to get barishan this until at least retesting or fill in that Gap that can 5280 there’s a trigger that is trying to hold support in the support for the trigger is 4875 really no Rhyme or Reason to how much time it’s allowed to take it shouldn’t take long it doesn’t usually take long but it can take a while it typically doesn’t go on indefinitely but so long as 4875 is holding his support there still potential to or still in a traction we’re still in the orbit of 5280 it’s not a great risk reward to just get long here because we won’t know that’s wrong until closing at 2:46 alright because of the consequences versus other equities they can behave differently it’s certainly interesting here that volume is clearly expanding it’s done that before into and out of a turn comes in at 61.8% so basically presumably confirming that 61.8% influential volume to still be just noise to still be just a corrective balance that would satisfy a lot of that volume increase everything but it is nice for the it is nice to Gage this against a previous low it’s hasn’t been a year of decline or at least so I can’t really say that this is greatI definitely want to see somethinghaving had a year of rallying recently this isn’t actually this didn’t begin the year or spend half the year declining precipitously and chop Ali and being bad about by wide-ranging opinion that’s also helpful when looking for a January fat candidate that you can get extremes that a start that helps us. Get to extremes that kind of price action and then finally because of the different tax treatment to an MLP I’m not really sure that this is going to be a great candidate for suddenly recovering when text lassoing pressures and bait at the end of the year or that text actually influencing it down this volume is is very concerning because it is a company price trending down and having responded to 993 if there is a break under 993 got to be concerned with that extending down to the next level okay I understand Rite Aid any chance from cover to 6 Rite Aid situation I’m not going to be able to from a dollar 92 back to 6 without seeing some kind of bottom e action that I can measure and then extrapolate out what levels would satisfy that but just to just to point out 6 happens to be a higher prior low a higher priority that’s already been tested after being broken so if 6 were recovered it’s probably because something even more substantial than that was on its way to being recovered 675 and even higher 757 huge Paradigm Shift probably would have occurred at that point anyway but until there’s some kind of backing and we can call this guy at 275 it’s prior low 2:15 so if somehow this pattern produces a close above 275 and holds 250 now to pull back before closing above whatever that that first road of hyenas say 275 is up to 3 330 something above 215 say 220 specific levels calculate what the objective would be possible objectives as far as November I want to see a fresh High doesn’t have to be I would be afraid of a fresh low I would I wouldn’t buy the weakness but I’d identify a place to buy strength not necessarily to get back to 6 but something that would explain a thing of January that candidateI would also cost and everything seems to beCanada so here’s an example last year we got ahead of itself bounce it in November and into December and lost its January effect sponsorship alright any other retailers Jamie I don’t think we’re going to have a great question I don’t think we’re going to have the high profiles I don’t think we’re going to have a lot because you have Princeton Sears Kohl’s it wasn’t really Under Pressure through the year debased this what if this is the kind of pressure you want to see through the year end of Thanksgiving get some sort of a retest in December this clearly didn’t didn’t behave as a January if I can it would but this I just want to look for it even the beginnings of a January that candidate we don’t have that here for Kohl’s obviously JCPenney is possibly a January Fete Canada down and down it had sort of I think we can get rid of this resistance which never recovered that last Touch of that trend line that’s imperative so the downtrend maintained but put out a fresh load that’s pretty quickly recovered here so that’s interesting it’s not a trend change yet but we have a November low if November’s Lowe’s were tested I want to look at that but meanwhile have a good just hold 285 and then close back above these highs that would be good going but the the tire profiles just haven’t had that kind of a year maybe Sears Under Armour you can even look at last year November December January you can see the disappointment clearly there’s that news reaction exacerbated by perhaps artificial buying expecting a January but clearly there’s news herewhichat 3250 well that’s being attacked is being attacked a lot more aggressively than I was expecting after the reaction down from earnings it really Consolidated and resumed very quickly but without volume and prove it so I’m still sticking with that 3250 Target and no higher or any other is anything else let me know okay thanks everyone for taking time from your weekend to be with us at the Saturday review the chart was going to be open tomorrow night I will be there later yeah we’ll see how the markets reacting to the news okay have a great weekend everyone take care