Saturday Review’s recording (for 4/29/17) …
Consolidating for two days into the weekend didn’t prevent the week’s earlier strength from making it the strongest performance in months. Is this just a pause that refreshes? Is more refreshing needed? How will we know either way? These questions, and more, are discussed in this week’s Saturday Review…
The following stock requests were reviewed in this order:
VA, MA, GDXJ, GDX, UA, AMD, XLE, JJG, CMG, VZ
David B: Good Morning
(04/29/2017 09:42)
Mark Glezer: DT – can be bullish
(04/29/2017 09:44)
Mark Glezer: never mind not a DT
(04/29/2017 09:50)
David B: closing below what level would take new highs off the table?
(04/29/2017 09:53)
JP: does below 2378 and maintaining that level as a high set up as an island reversal
(04/29/2017 09:58)
Mark Glezer: gapping up Mon could be shortable if within Fri range?
(04/29/2017 10:05)
David B: V,MA
(04/29/2017 10:13)
David B: UA,AMD
(04/29/2017 10:16)
Mark Glezer: heard a rumor that UA passenger got $140M in a settlement
Mark Glezer: never mind
Mark Glezer: you are right :)
Mark Glezer: my estimate was $10-15M
(04/29/2017 10:20)
Bill G: XLE and JJG Seems like and inflection pt relative to last Aug/Sep lows
(04/29/2017 10:25)
Bill G: I was thinkink a failure would be large in either direction
(04/29/2017 10:26)
David B: CMG,VZ
(04/29/2017 10:28)
Bill G: Huge long position by hedgers in grains
(04/29/2017 10:34)
Mark Glezer: thx much
Bill G: thx
David B: Thanks
so if there’s a number of international exchanges that are going to be closed Monday for made a Mayday being the being an internet being a holiday in many countries and then throughout the week there are several major exchanges Danny Kaye is not open all week or for the entire week so there’s a liquidy issue as much as a participation tissue or more so because with participation issue not a one-sided market and that’s interesting when and where it appears because of the last couple days the Market’s been struggling to to maintain 12 to maintain let alone to resume the uptrend the uptrend that didn’t necessarily appear suddenly but we didn’t know relatively choppy base the last low stopped optimistically short of filling the two week-old Gap open below Toledo context of this rally not only that indication but for me or rejecting that low by gapping up couple of things about the nature of the next step up at cetera we know that this context of this lake is optimistic ugly optimistic deserving of consolidation something that would take the pressure off of the rally and it happened as soon as it means that being a identify any particular action and how it happened to get there is a difference between up and down just confirming the next day minimum of being any other points along the way in fact just confirming and one of those top out of that high it’s possible to form a more durable top create another pull back and eventually resolved up but this leg probably isn’t the leg that Riley’s into an ongoing bull market so that’s not to say that we testing the high let’s just assume for a moment I’m not sure it’s a good assumption to make but let’s assume that this late does get back to the high let’s say this leg does get back to the house which is the objective but I’m try this week let’s say this week it’s back to the high which isn’t necessary regardless of that being the objective even if we were a hundred percent sure that is the next objective that doesn’t mean it gets there this week but let’s say we do just head straight up this week optimism certainly seems to be if not it’s all time best it’s still saying plenty of signs in price action reflecting it slip say we get back to the high this week we’re going to just touch the high and then a durable top forms instantaneously and reversed and probably not when that has touched the room for noise above it is 2405 and probably 2415 that’s bases gym so probably 2415 is touched in the process it’s also possible for that leg to get exponential is probably as much chance of that as for meeting that Pryor High the high this week and if this week does extend hired to that prayer that probably does reflect so much optimism that from a country in perspective it may be doomed to failure but in the interim that’s optimism and can get carried away show another way to look at this to make it seem to make sense of it is that we don’t know when the high comes but presumably just based on the highs and lows the different shifts and optimism and pessimism probably one month to 6 weeks from now we’re here or lower after having been higher so it’s not that were looking for for runaway bull market but once we get our ever high proves Honda one big Canada 2415 the market reacts down and probably not aggressively or at least if it is aggressively reaction down and other words if this Pryor High is Prague aggressively and then reacted to aggressively forming a very similar structure then probably that’s not a durable at that point if we get this kind of reaction down what is this was the same in the same way not in the same way that this is excessive optimism pessimism well it’s good for the goose and gander if this is overly optimistic and so it’s going to run into trouble overly sentimental you cancel each other out so that accepted to excessively and it’s the same shape as it is being tested they will only look for a temporary probably down as may be on a mission it might seem pretty long and drawn-out at the time but probably on a mission to hunt down a couple of gaps to fill lower-priced before resuming there’s a pattern that it could start to resemble it’s not actually this has similar properties Define the downtrend but notice what starts to happen here cup handle Breakout now when this pattern developed a cup & handle when this pattern develops in a downtrend and it on going down trend scoping out its own Lowe’s at some new lows but really forming a retest of a prior low when this cup & handle appears in the context of an ongoing downtrend that’s pretty substantial bottom and this tends to extend for a very long time however when it appears in the course of an uptrend it has the same initial potential but not for any substantial amount of time so it’s not really a cup & handle but I want to point out that it has the same qualities or characteristics and it has not just the characteristics and its shape and there’s a couple other features here I’m going to point out but also in its resolution or at least its initial resolution but this is the wrong time to be digging be this is a different group of sponsorship that’s forcing this at the end of an ongoing downtrend this is last-minute sellers this is late so it’s okay we’re done with trying to hold this long for the eventual recovery but they are absorbed and that’s the end of that an uptrend this is distribution among stronger hands and stronger hands just can’t time I talk it’s not that they’re unable to they’re just not interested in it they’re not as interested in it as their trades getting out of a sizable positions require selling into some remaining enthusiasm and so when they’re finished Distributing there’s going to be just for the sake of supply and demand suddenly suddenly having outweighing of demand not because demand picked up but because it suddenly relatively Supply shrink so it’s weird I think so it’s basically the stage right we shouldn’t see big volume we shouldn’t see I mean maybe there’s some gateways like this that squeeze higher but not a long drawn-out Affair which thing any of those characteristics concerted broad-based rally effort they were probably in a stronger or at least that’ll speak to the potential for it being a stronger longer term duration and so we shouldn’t be singing it is better if it were then it would probably have a bullet resolution ultimately because they are made to be broken so that is we probably wouldn’t make it out of this not just correction seemingly haphazard under the rim this is one reason why we should look for even hear you don’t know it until a couple of days past we’re suddenly this sentiment an exploded in explicable E maybe but it happens is the explanation suddenly gives way to this to it seems like everybody went home with couple days early it’s developing under the rim and that represents or a flex pessimism at least restrained optimism but not the case to some degree from a contrarian perspective it’s foolish that’s not to say that there’s even a deeper pull back anything is possible and in fact in this pattern that we’ve been tracking there’s room back to 2375 with that being the last relative High number a few weeks ago and the fomc minutes were released and suddenly that afternoon plummeted and began the last down leg of this pattern two consecutive closes above it is what put into play new highs by proxy the replacement of the entire down so I tested it is not unusual but there’s room down to it and probably threw it to 7150 and maybe even lower if there’s some negative news announcement this is been a very headline Rich environment and this Market has been very happy to react to headlines I get the right wind at its back or a headwind whichever and 6061 suddenly comes into play as well but again the resolution of real looking for is just a temporary IR hi Brittney I so that was one it was one feature I like to see which is the handle developing under the rim the next week I’d like to see we haven’t seen yet because this is still likely to track a cup and strike up and handle it’s just that the ultimate resolution is different because of the contacts where to piers in the trendy ongoing trend but the resolution should be aggressive not almost literally exploding higher all the way through but you want to see some recognition and restore the market something fun like a game of musical chairs at the music has stopped and there’s no church what level basically knows every pull back is just a deeper and deeper correction it wouldn’t be abnormal just unusual doesn’t usually happen but it happens that the entire day is retraced and tired of this right now this cup & handle type pattern does stop making does stop being influential if the Cup itself brakes but it’s not unusual other side of normal just unusual to return all the way back down to the actual trend line break the context of this being a very brief higher High new high when it gets there is that the contact is overly optimistic or accessibly optimistic well that’s not the case if this were to correct all the way back down to the breakout point that accepts of optimism that point so the question would take off the table actually closing below whatever level like under 23 6061 so that the next lower jective actually fill this Gap or touches The Break-Up point that takes off the table that the new highs won’t be durable or would be doable that takes off the table it’s just a temporary I coming very little this pattern can and it without probing I knew I okay so this week Mayday that’s interesting coming off of the two days really raining sideways I mean it hasn’t been just know is it really been that sloppy there’s been predictability ahead of the sessions how they were going to behave and levels that have been predictive of those reactions not going into Thursday being able to forecast both of the next session but for instance the forecast Thursday’s likely pull back or even Wednesday at Wednesday’s likely rejection of its morning hun because of its origin and how late that resolved down which it was likely to resolve down from the moment that it tried resolving up has late is the resolution came lower lows became likely and then Thursday afternoon that surge was pretty optimistic without getting out of of 2388 resistance from what was the shallowest potential back to buy it was tested but that opened up the template for retesting Thursday’s look which came very Shelly on a Friday member there was a very big likelihood that’s just opportunity or phone ability but likelihood of a capitulated leg I Collapse at some point Friday which was avoid it so so vulnerable to that and not doing that again this is one of those indications of optimism lot of optimism still in this market even on the second day of two two and a half days flat The Lone Ranger that can be gotten out of the way that often that accepts about them coming neutralize pretty quickly Monday’s open by trending down Sunday night to get down get down to the 71 5072 area not really that low but that’s the lowest that I want to commit to right now dropping down could immediately and the correction and let Monday get on with remember made a lot of a lot of exchange is closed around the world and not just for that day and not necessarily a day but throughout the week so I’m Rollin outages so to speak so not going to be a lot of sponsorship out there to get spooked and to some degree this could have been a lot of sponsorship getting out taking advantage of the rally that preceded it ahead of the illiquidity to come it’s going to be difficult getting trending going trying to break out of this rain not there won’t be attempted But ultimately difficult to succeed earnings is a catalyst to make that happen Wednesday afternoon we’ve got the fomc policy statement and it’s not abnormal it’s just unusual that payroll employment situation report on Friday should hit the same week as the fomc and the bond market is already quite controversial it’s going to be put through the wringer so it should be an interesting week now maybe this is already with that optimism may be successful that liquidity or impending illiquidity can cut both ways either way and maybe capitulated leg has been avoided by holding the test of Prior Lowe’s it wasn’t actually rejected I don’t think that’s the case because if that were the case it should have been rejected by the clothes yesterday but there’s no rejection whatsoever more so it’s more likely it’s just a delay in that could pitch a little late but for some reason 7 News comes out another headline reaction North Korea gives up accept Syrian refugees whatever so suddenly everybody is getting along perfect solution is found Market Gap so it better get up above above Friday morning as well and preferably above the entirety of Friday session essentially 2388 but again I don’t see that I don’t see those headlight number to that pattern playing out with that’s how we’ll know what is playing out big recovery actually get out of Monday’s range which is essentially Thursday’s Rangers well just as quickly as possible even that won’t be definitive there’s a lot of resistance up here nights might think was so close to the prior High of course getting out that aggressively first thing Monday morning that back about the prior to sessions range that quickly of course not there’s a lot of resistance at the weeks I and of course the more alright this could have been 7370 back into this area getting rid of all that only do anything that insufficiently that downside potential would remain alive as gapping up just a little bit doesn’t immediately extend hired establish like the open a trend to the opening 15 minutes something like that but as far as as far as this point for this vantage point so far away knowing that that’s where I would short is a shallow Gap but not necessarily Gap up could then spend the morning backing and filling or gravitating closer to the to last two sessions eyes but the resolution would likely be down I agree alright here’s interesting we’ve been looking at Chipotle for a while I’m not going forward to stop just yet but the point out this was someone up and handle bottom look at that handle develop under the rim and it’s not isolated or isolated it certainly has that can handle add aloe at the end of or the context of an ongoing downtrend but it’s really a retest of a priori it’s a different characteristics Rida Low was aggressive this one actually took longer to develop but definitely different characteristic and by the way directions to that’s alright compare them to reviewokay again came up with a higher low breaking down trending resistance stalling at the last trendline touch and then extending a higher the day off of the lower low stalling pessimistically I’m so a lot of pessimism here in the Dell still stalling pessimistically you’re only getting back toward the prior hi that’s the fomc high that it was actually over laughing at least pre open but still extending out so getting more in the line in other words with ES member we looked at these last week and they just want to Bullet enough to preclude lower those before last week’s rally but they kept the context alive knowing that if there were lower lows it was just part of the pull back and then finally and Qs there’s the fomc taking it out considerably that Pryor High and trending straight up to speculation is alive and well and that may be just as much a reason for a reaction down for starting the week with a dip because speculative activity just got squeezed by the Friday Factor among other things today so depending on today that’s obviously where resources are going