2 dangerous sell signals in the market

Screen Shot 2018-12-12 at 11.20.03 AM

look at the above chart of QLD – nasdaq 100 Double . both the 55 days SMA just crossed the 208 days SMA from above and also the 10 days EMA crossed the 22 Days SMA from above (rather bounce).

My expectations is that market is going to fall further.

NASDAQ is just above the critical 7000 level we have had triple top

NQ has a a shorting opportunity at 6800 level

 

yield curve inverted market crash

i am not a predictor of the market, neither do i have any crystal ball. but the last post accuracy has been immediately proved in the market on Tuesday December 4th 2018. wow, what  fall!

IBD narrates – “At one point in the session, a 2.78% yield on the five-year note dropped under a 2.80% yield on the shorter two-year note. In other words, it made less sense for investors to hold the longer-dated bond for a specific return.”

usually the 10  year is compared with 2 year curve. But this is telling. Market need something to sell.

IBD continues – This was supposed to be a banner week for the Dow Jones industrial average and the broader stock market. President Donald Trump called off his escalation of China tariffs days after Fed Chairman Jerome Powell traded his hawkish talons for a Santa rally cap. But financial markets just aren’t buying the good cheer.

so i will either short or stay out of the market

preserve our capital and profits at all cost! Market is in correction.

then they my be a possibly to play an other day

Great rally so far but OBV not convincing on NASDAQ

according to IBD – “The Nasdaq composite ended with a gain of 1.5%. But the blemish to the gain was that the index met with some selling pressure as it approached the 7500 level. The index’s 200-day moving average currently sits around 7520. The Nasdaq closed in the upper half of Monday’s range, but it ended just below the 50-day moving average.”

The On Balance Volume (OBV) on QLD is not convincing – it is just above the levels on Nov 9th 2018 which is 59.337 Million as opposed to yesterday which was 59.786 million. no divergence (this divergence was exactly seen on Nov 7th 2018 at 62.335 million which was much below at similar QLD price levels on 10/22 when then OBV was 67.719 million)

then the market fell from 7500 Levels on Nov 7th to 6900 levels on Nov 20th – a drop off 600 points because of volume pumping up the price was not intense. OBV would indicate that very clearly.

according to IBD – “The Dow Jones and S&P 500 each added 1.1%, closing bullishly above their 50-day moving averages. Preliminary data showed volume on the NYSE coming in about 10% lower than Friday’s total. Nasdaq turnover was close to Friday’s.”

but for NASDAQ the cortical level of 7500 is not crossed.

Market is in rally but preserve capital and profits

making money in a down market

when market falls it does so quickly.

Now you see in the previous posts how all macro signs pointed this right before 10th October 2018.

it can be found in three parts – part 1  part 2 and part 3

now i made money during this fall (anyone interested to see the proof, please contact me at exlporingdesh at gmail dot com ) or leave email address in  comment section.

how does one make money when market declines.

there are three straight forward ways  A) buy an inverse ETF like QID. B) buy puts on NASDAQ or C) short NQ futures.

Only B has limited risk limited reward.

Let me show you how

happy trading travelers

 

market is in rally

A follow through day is a gain in major indexes for 1.25 % or more in high volume. The market did just that today.Â

IBD says this

The midterm election results and a 2.6% gain for the Nasdaq composite delivered a nice present for stock market bulls Wednesday. The Nasdaq 100 did even better, up 3.1%, helped by strong moves from FANG stocksAmazon.com(AMZN), up nearly 7%, and Netflix(NFLX), up 5%.

The Nasdaq composite followed through on the seventh day of its rally attempt as several top-rated growth stocks made explosive moves in the stock market today. The S&P 500 also followed through with conviction, and the Dow Jones industrial average surged also, both with gains of 2.1%.

lets look at if other stocks in S&P 500 are participating in the action yesterday .

Look at the chart below – 13 % increase in the number of S&P 500 stocks above their 50 days SMA!!

Screen Shot 2018-11-08 at 8.34.10 AM

i have gotten into the market from all cash position yesterday.

Red flag Research shows that a distribution day in any of the first three sessions after a follow-through day can foretell a failed rally. A distribution day that comes later is easier for a rally to overcome. THE RISK DROPS OFF SHARPLY from the 6th day or so

Red flag 2 : top rated stocks action :: in early stages of new uptrend strong action of leading stocks is CRUCIAL. Top rated stocks should be breaking out of bases in big volume.

A confirmed uptrend can weather an occasional sell-off every week or two and still show the fight to keep rising.

THERE WERE 7 distribution days many times in 2017 yet it rose 37% !!

I have gotten in the market yesterday. Good deepavali gift!!

happy trading

 

lessons learnt in market crash – Part 3

Hello traveling traders

Good morning from Sunny Hyderabad. Yesterday was festival of light (deepavali) here and lots of fireworks and goodies to eat!

Part 1 and Part 2 can be found here.

today lets look at russell 2000 a bench mark for small caps

Screen Shot 2018-11-08 at 8.39.54 AM

It will not escape your attention that it is going down since 9/04/2018, a month before the actual crash!! and it drops down the 55 day SMA on 9/26 and stays down there and goes down for 10 days before the general market crash!!

wow!