Volatility and Markets the corona virus effect

Volatility and Markets the corona virus effect

Well what a couple of weeks its been in the markets - the volatility and point moves have been pretty staggering and unseen in the most recent times and not really since the 1999-2000 bubble and also since the GFC of 2008..all from the corona virus.. Point moves in the DOW, S&P500 along with the NASDAQ are quite a wake up call for many used to the markets that have gone up in a straight line since 2019. And yet no one was crying out that markets were in bubble territory from all valuations perspective and higher than the 1999-2000 bubble.. Yet all the analysts kept raising their target prices for already over hyped and over valued stocks. Well the virus came and fixed that - in a span of 4 or 5 trading days all the gains of 4 months were wiped out. Just check the chart below...

The market players and individual investors had become numb to any down moves and were high on everything moving up and were hypnotized by the markets - since every buying the dip was a good move - specially in the big names - the DOW stocks and the most owned stocks by the entire universe of funds - HD, MSFT, FB, GOOG, and you can easily name the whole list.. 

As you can see the markets look oversold and may have some consolidation at this level - around 25000 for the DOW and around 280 for the S&P500. The QQQ (or NASDAQ even though looking oversold - may head lower - we think there is short term risk to stocks like AAPL, MSFT, AMZN and FB - the big movers for the past few months. AAPL definitely moves lower to around 240.. We recommend taking some profits in these big names.

Here are the charts for AAPL, AMZN, FB and MSFT. 

FB looks the weakest...

The DIA chart here is showing resistance at 270 so we should expect a bounce to that level  (around 27000 for the DOW). 

Although the markets have been volatile - it is a great time to make money.. The volatility creates huge opportunities to make money with intraday or overnight trades with the right stocks. Many stocks are moving over $10+ a day and that is a huge bonus to make money. It is easy to find these stocks and these are very standard big names like AMZN, MA, V, SHOP, ADBE, NFLX and many more. We recommend more day trading rather than holding overnight positions.

We really like gold and you can check our tweets and blogs and our call on gold since it has been at 1100 and now has had a move to around 1700 a move of around 40%+.. We still like gold and are long physical bullion and buying more... Our target is 2500 as fiat currencies are failing and in the end there will be some reset as the debts are unsustainable as are the promises being made by governments. We expect INR (Indian rupee to head to 80 per dollar..)

Good luck trading and do subscribe to our site - it is a measly 180 per year (premium) and 95/year for basic membership to excellent REAL TIME CHARTS, QUOTES, FUNDAMENTAL DATA, excellent scanner (screener) along with buy/sell strategy signals - we are working on sending technical alerts via sms/email...and many other features... 

Sincerely

Bob B (Founder Trucharts.com)

Markets - What to do now? BUY,SELL,IGNORE,HOPE & PRAY

Markets - What to do now? BUY,SELL,IGNORE,HOPE & PRAY - Trucharts.com Weekly Blog Update - week ending 8/21/2015

Well we finally are getting some excitement in the markets.. Before we get into the gist of our discussion today after the amazing week we had - where the DOW plunged over 1000 points and VIX (volatility index) moved up finally, we would like to list the key viewpoints we have been discussing in our past blogs regarding the market action:

• There has been sideways movements with triple digit moves every week (9-12 weeks)
• Markets have been exhibiting very clear topping action
• Narrow Breadth, narrow leadership, New Highs and New Lows ratio skewed to the downside
• Oil and commodity complex crashing (we said oil dropping was a big deal)
• China - China - China - over mired in debt and capacity in all sectors
• WE HAD STATED THAT CHINA WILL HAVE NO CHOICE BUT TO DEVALUE AND THAT IS EXACTLY WHAT THEY DID - IT WAS THEIR DEFACTO STIMULUS AND WE EXPECT FURTHER DEVALUATION OF THE YUAN - headed to 6.7-6.8 to USD range
• Transports sector down
• We have been saying sell into any rallies, take profits and hedge your positions
• DO NOT listen to the talking heads on TV - it is all BS
• NASDAQ was being buoyed by the biotech stocks and these were going to breakdown and were the new darlings of Wall Street along with the big internet names 
• Earnings and Revenue forecasts were lower for the next qtr from many sectors -specially the tech sector
• Valuations in many internet stocks like FB,PYPL,etc were at ridiculous and lofty levels along with the valuations being given to companies like UBER etc in the private placement
• INTC and MU earnings were key and we had stated that the semi-sector was headed for a major slowdown. We said short INTC,AMBA,SWKS,HAL and MU 
• We had hedged our longs with covered calls to reduce cost basis 
• IBB ETF closed below 13 week SMA the week ending 8/14 for the first time in over 15 months

Well now everyone is wondering what next - what are you going to do with your portfolio - Well guess what - we are staying on the same viewpoint and thesis - Sell into rallies, take profits and short IBB (could be the best short). Markets will bounce - but these will be short lived - you can expect more volatility in the next few weeks. You will see clearly below in the charts below that major trendlines have been broken for all indices and the close below major moving averages is a big concern to us. We still like the INTC,MU,AMBA short and are shorting IBB/GILD. We were long NFLX - but with a covered call strategy. We will close half our position and wait for a better entry point. We will look to buy some index ETF on any bounce - target range for DOW is first support 16000 and then around 15000. We think PYPL could be another great short - we are short PYPL.

You can also use our BUY/SELL automated trading strategies on the stockview page to see where sell signals were generated and try to see which stocks in your portfolio are on a SELL signal - do this on weekly and daily charts for your stocks.

Here is the page: www.trucharts.com/StockView.aspx

Here is the image of trading strategy box on the page above: You have to click to expand the box:

Here are some charts we would like to show this week - look at the trendline and averages - these are weekly charts - please look at RSI and MACD - these are headed down:

 

 

       

Good luck trading, take profits here and now, and sell into any rallies and wait for better entry points. DO NOT LISTEN to the talking heads on CNBC.

We love documentaries and our recommendation for this week is an amazing documentary on smart meters and why you should not allow these in your neighborhood - we live a world of tyranny and corporate corruption and power: You can see this one on AMAZON or YOUTUBE.

Take Back Your Power

byJeffrey Armstrong

Trucharts Team/Founder/CEO

Greece Referendum - How will markets react this week? Trucharts.com Blog - week ending 6/26

Greece Referendum - How will markets react this week? Trucharts.com Blog - week ending 6/26

Well looks like our call on the weakness in the underlying fundamentals of the markets are finally coming to fruition. Earnings from ORCL (ORCL chart), Micron (MU Chart) were pointing to a slowdown in the tech sector - which we alluded to in our blog. 

We stated to take profits and hedge your positions with covered calls or puts a month out for a strike price 5% to 10% below the current prices, for some protection to the down side. INTC - chart below (weekly):

As you may have read in the news INTC is planning layoffs and with the MU news of slowdown in the PC sector we expect that INTC will very likely state the same. The ALTR buyout was primarily to fill their old fabs and they paid a hefty price for ALTR. Seems like a sign of desperation. We will be shorting INTC tomorrow.

Then this weekend we have the news from Greece calling for a referendum. We think the Greek leaders are doing the right thing and letting the people of Greece decide the fate of the country. The creditors are not happy but the choice of cutting back benefits/pensions significantly and hurting the people of Greece is not to be left in the hands of the a few politicians and the Germans. We will have to wait and see how Greece exits the Eurozone - we think they may have already made that decision.

We expect volatility in the markets this week - we alluded to the topping nature of the markets for the past few weeks and how the weakness in the individual DOW component stocks, transportation stocks as a sign of topping behavior. Here is the chart for SPY and DIA (weekly) - notice the weakening technicals (RSI, Moving Averages and MACD) - SPY has not closed below it's 13 week SMA - Chaikin Money Flow is still positive - the next two to three weeks are critical and we have to see if the SPY can hold or bounce of the 50 week SMA. We also stated how the markets have been playing the round number games with the Dow Jones 18000 level, SP500 2100 level and 5000 for the NASDAQ for the past 6 weeks with three digit moves every week.

SPY Chart:                                                            DIA Chart:

SPY support at 208 and DIA support at 177. Here are the daily charts - keep an eye on the moving average support lines:

 

What to do this week:

1. It is going to be a shortened trading week very likely with low volumes going into     
    the weekend because     of the 4th of July weekend.

2. Sell some covered calls and buy some protection - we are heading into earnings      
    season.

3. Take some profits as we stated earlier - nobody is going to complain or regret 
    locking in some profits.

4. Watch critical support levels for your stocks - you can do this easily with our charts 
     support resistance option on the stock charts page.

Our positions: Long BIDU, CYBR, Z, - short INTC/AMBA. All positions hedged with calls and puts.

On another note here is the chart for IBB ETF (Biotech stocks) - just see it's support level at the 13 week SMA - unbelievable.

We added new features to our site - a quick chart box on the home page and a new chart skin color scheme on the stock charts page - check these out - nice new features to have. The charts we are showing are with the new color scheme.







Some articles for good reading:

http://techcrunch.com/2015/06/26/the-tech-industry-is-in-denial-but-the-bubble-is-about-to-burst/

http://www.businessinsider.com/stock-market-is-a-petri-dish-2015-6

http://www.nytimes.com/2015/06/27/business/international/chinese-stock-indexes-plunge.html

http://www.zerohedge.com/news/2015-06-27/bad-breadth-milestone-warning-stocks

http://www.zerohedge.com/news/2015-06-27/chinas-370-billion-margin-call

http://www.econmatters.com/2015/06/chinese-stocks-how-to-think-like.html

http://www.zerohedge.com/news/2015-06-27/desperate-china-cuts-key-policy-rates-after-stock-market-crash-its-just-1987

http://finance.yahoo.com/video/risky-buyers-making-comeback-housing-233326345.html

http://www.zerohedge.com/news/2015-06-28/ecb-says-greek-bank-holiday-now-necessary

http://www.zerohedge.com/news/2015-06-27/moodys-fitch-fret-over-billions-student-loan-abs-defaults-loom

Was it a market Correction? Or the start of something bigger?

Market Correction or is the market going to crack here?

Markets on Friday pulled back and broke the 50d and 13d SMA from the wedge pattern we discussed in our last blog. The NASDAQ closed above its 50d SMA. Here are the charts with critical short term trendlines. We expect support for SP500 around 2048 area and for the DOW around 17450. For NASDAQ, around 4850. These will be short term critical support areas. 

There was news on new housing starts which was not good heading into the peak home buying spring season and the housing stocks - check (www.trucharts.com/stockview.aspx?TICK=LEN as an example). Then we had news from Greece and possible default, then the news of the slowdown in China growth and the stock market bubble - investors opened over 4.8M accounts in one week - think about that number 4.8M in one week - Wow!! China is experiencing the same bubbles we had in the US - stocks bubble, housing bubble and then now again stock bubble. There are bubbles brewing everywhere and now for the first time San Francisco median price crossed $1M - this is what happens when money printing machine is running non-stop.

Check the trendlines for the DOW, SP500 and NASDAQ. Watch the levels closely. We have been in a sideways consolidation pattern after the breakout in Oct of 2014. There have been breakouts, but the markets have still been in a sideways pattern. Support for DOW is around 17000, SP500 support is at 1980 area.

With the earnings season in full force there have not been too many surprises - PM raised forecasts and the tech companies have had lackluster earnings - even the forecasts have been muted. We think this is the peak of the tech cycle. 
We are looking to short XLK (www.trucharts.com/stockview.aspx?TICK=XLK) 
and/or SMH/IPGP (www.trucharts.com/stockview.aspx?TICK=IPGP) for the short term. 

There is a another set of earnings barrage coming next week and the week after - IBM, AAPl, TWTR, YHOO and many more - check this link on our site for the earnings calendar: http://www.trucharts.com/EarningsView.aspx?qst3=qstthisweek.

Our all long portfolio was down only 0.1% on Friday even though the markets were down over 1% each and our long/short portfolio was up 0.5% on Friday. We hedge all our positions and our TWTR position was called away on Saturday. We are long MO, USO, BIDU, TWTR. Short positions are AEM, IBB and SNDK position closed on Saturday.

Check out our special susbscription rates for full access - our features are bar none the best of the web - we are aware of other sites that charge just $35 per month for the real time news feature. Here is the link to our subscription page and our site features:

http://www.trucharts.com/truCharts_Services.aspx

http://truchartscom.blogspot.com/p/why-is-trucharts.html

Good luck trading.

Trucharts Team