What The Markets Are Telling Me
Based on current Fibonacci price support and resistance zones,
it looks like the major indices are setting up for at least a short-term sell
off. Not only are index ETFs like
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SPY |
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(
QQQ |
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(
DIA |
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price resistance and time cycles that are calling for at least a small reversal
to the downside, but the Long Bond
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US03H |
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time cycles for a reversal to the upside. Why does that matter? I think we are
playing a game of “Serve and Volley†right now between bonds and stocks. Out of
bonds into stocks…out of stocks into bonds. With that said let’s take a look at
a few daily charts and see what I’m looking at.
Below are the charts
of SPY, QQQ, and DIA. As I said in the paragraph above, they are each facing key
Fibonacci price resistance and time cycles telling me we may be in for a
reversal in these price zones.
Below is a chart of
the 30 Year Treasury Bond
(
US03H |
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PowerRating).
This chart has all the key ingredients I look for in a trade: 1) Pattern 2) Time
cycles 3) Fibonacci price support. Bottom line here: this is a major, major,
major price decision zone. If bonds collapse below this zone look for equities
to continue to rally and bust through the resistance I mention in the index ETFs
above. However, if Bonds hit this price zone on the chart below and start
bouncing up…be expecting a reversal in equities to the downside.
This chart below is
the daily graph of Gold Futures. This commodity is facing a large resistance
zone as defined by the chart. However, I also have a chart of the
Gold Bugs Index
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HUI.X |
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which shows that these gold stocks may be in for another 10-20% run in the near
term up into that large resistance zone. In fact, right now, we are in limbo as
key support is about 10% lower and key resistance is about 20% higher. But this
is what gold looks like in my books. No real action here for me.
Here is a chart I mentioned last week on the Oil
Service Holders
(
OIH |
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PowerRating). It is setting up for a long trade. In
fact, I was triggered into a long trade on Friday, but so far in the red on the
position. I definitely want it to hold this support zone. If not, I take my
lumps and move on.
Finally, below is a
daily chart of Dell
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DELL |
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PowerRating). Many of you
have seen that I have released a near and dear strategy that I call the Triple
Crown. In Traderswire, I shared this set up on DELL. Friday, we were triggered
short at 27.90 and today we took partial profits at 25.75. I realize strategies
are a dime a dozen, but I take pride in this strategy because of the risk
profile of trade set ups and the explosive moves that occur out of the set ups
on a regular basis. I look forward to working with those that have chosen to
take a peek at it.
Good night
Derrik
P.S. I’m in the midst of finishing
up an in-depth training module teaching you exactly how I trade my favorite
strategy, my “TRIPLE CROWN STRATEGY.” If you would like details on it,
please click
here. Also, you will receive 1 free month of my Nightly
Trading Service (a $150 value) when you order. Click
here for more information or call 1-888-484-8220 ext. 1.