Saturday Review’s recording (for 4/30/16) …
Last week’s decline was really Thursday afternoon’s and Friday morning’s decline. The week previously had been all about either recovering from dips or testing resistance. Although relevant support — if not also critical — held Friday’s thorough testing, no recovery is yet signaled… So, what would qualify as that signal Monday morning, or even Sunday night? What is the alternative, and how far can either scenario extend? These and other questions are answered in this weekend’s Saturday Review, linked below.
The following stock requests were reviewed in this order:
FCX, JOY, ERII, ALB, CB, GROW, POT, CACC, HOG, SBUX, CLF, ULTA, CHK, AAPL
04/30/2016 09:13:46 sm: I asked this previously, but feel like I need to ask again – Can the 2110 target be adequately satisfied with the test of the 2105 level? Is that close enough for the market to legitimately be in the process of resuming the decline?
04/30/2016 09:31:49 David B: Good Morning
04/30/2016 09:31:50 sm: good
04/30/2016 09:52:25 David B: could the low on friday be a warning shot across the bow?
04/30/2016 09:53:08 David B: as anything this week been distributive?
04/30/2016 09:54:36 Josey: I have never seen a W pattern on a intr day, but when I have on a longer term it launched a rally. Is it bullish short term?
04/30/2016 10:00:35 Mark Glezer: Has NDX been a leading indicator in this multi-session decline and ES maybe just joining in & trying to catch up?
04/30/2016 10:04:21 sm: Not testing 2110 would seem to be analaous to an intraday target that doesn’t get tested and probed because of weak-handed sentiment that prevents it. Contrarian view suggests that leaving that level will eventually attract price back to that level
04/30/2016 10:06:06 David B: yes that answers th question
04/30/2016 10:06:11 David B: the
04/30/2016 10:06:50 Josey: yes
04/30/2016 10:11:24 Mark Glezer: yes
04/30/2016 10:18:05 David B: FCX,JOY
04/30/2016 10:19:46 MK: wow
04/30/2016 10:19:56 MK: FCX totally fell off my radar
04/30/2016 10:21:46 MK: ALB
04/30/2016 10:21:48 MK: CB
04/30/2016 10:21:52 MK: GROW
04/30/2016 10:21:58 MK: POT
04/30/2016 10:22:03 MK: CACC
04/30/2016 10:22:05 MK: HOG
04/30/2016 10:22:07 MK: SBUX
04/30/2016 10:22:12 MK: ULTA
04/30/2016 10:29:58 MK: ALB has a big interest in Lithium
04/30/2016 10:30:02 MK: as in Batteries
04/30/2016 10:30:36 MK: ok i’ll pare off
04/30/2016 10:30:40 MK: no need to do more work
04/30/2016 10:30:42 MK: i get the gist
04/30/2016 10:34:13 MK: its a long
04/30/2016 10:34:36 MK: yeah i’m in from 112
04/30/2016 10:34:39 MK: so no thanks
04/30/2016 10:34:42 MK: i’ll take my profit
04/30/2016 10:41:23 MK: yeah i sold high 50s
04/30/2016 10:41:33 MK: covered a bunch friday morning
04/30/2016 10:41:50 MK: ok
04/30/2016 10:42:00 MK: will press on monday
04/30/2016 10:42:01 David B: CLF
04/30/2016 10:42:03 MK: if we are weak
04/30/2016 10:42:15 MK: I got DESTROYED
04/30/2016 10:42:18 MK: by starbucks
04/30/2016 10:42:37 MK: was sized wayyyy too big
04/30/2016 10:42:39 MK: in the high 50s
04/30/2016 10:42:52 MK: and that move above stopped me out of 50% of my position
04/30/2016 10:42:59 MK: i’m BEARISH
04/30/2016 10:43:21 MK: ok
04/30/2016 10:43:23 MK: sweet
04/30/2016 10:43:30 Josey: szym, xone
04/30/2016 10:44:48 David B: CHK
04/30/2016 10:45:55 MK: trying to leg into this short
04/30/2016 10:45:58 MK: on ulta
04/30/2016 10:46:05 MK: i’m short at 205
04/30/2016 10:46:08 MK: i know
04/30/2016 10:46:09 MK: you hate it
04/30/2016 10:51:22 MK: If you look at the S&P aand AAPL correlation
04/30/2016 10:51:32 MK: it has massively diverged in Q1
04/30/2016 10:51:36 MK: and will continue to do so
04/30/2016 10:52:37 David B: thanks
Reviewing the recording again I have another question. Now that the market is testing lower prior highs, you’ve said that there are two likely outcomes 1) rallying aggressively away from this area on Monday, 2) continuing the decline lower in search of support, which necessarily means through the bottom of the consolidation (2030/35) to other support areas like 2008 or even 1982. My questions is: Can the market not find durable support at the .618 retracement of the consolidation – something like 2041, rather than have to break through the bottom of this consolidation area?
Good question. There’s usually only one bite at testing a prior consolidation. Just piercing one end of it but escaping a close within the consolidation constitutes that test. That was the opportunity to retrace it 61.8% and then recover. But now, probing back into the consolidation becomes at risk of exiting the consolidation through its opposite end. And the 61.8% retracement would help to signal that move is underway.