This is an Intermarket Analysis chart review which graphically represent relationships (strong and weak) that can foretell how the currents are moving to better identify how stocks/sectors/indices will move! You can see my last Intermarket Chart Attack here. Note my caption was “Not Done.”
I really don’t like Financials or the gap that was created by the latest market downdraft. Another way to play financials and SPX short is $BRKB, which is heavily weighted in both and also suffered a similar weekly gap down, whereas SPX only suffered a daily gap down along with NIKK and DAX. See where I’m going with this? Not Done.
I see XLE heading to $65 (and hope it holds for a lovely bounce). Keep in mind all those related plays that move with it: WTIC, HYG, OIH (for which we are short). Not only that but fave ETFs – XLE, XES and XOP – all have daily gaps down from Mon Jan 29, and now with Crude rolling over (started today, for which we are short), the momentum looks to continue to the downside. Not Done.
Small caps are approaching strong support (yellow arrow) but there is a gut instinct in me that it will gap right below it or bounce meekly and then fail. Not Done.
This is just trouble for metal bulls, and if you need a refresher on why I think commodities and metals/miners may fail, see my last Chart Attack where I’m presenting, and positioning, for a USD bounce. Not Done.
Last but not least, I am getting ready to buy bonds. I think TLT bottoms as soon as TNX hits 2.925%. I think TLT is shaking out the weak hands before it moves sharply higher and the market sharply lower. Oh wait, the market already moved sharply lower 10%, then bounced 5%. Well. I expect a retest of prior lows and that’s when the shift to safety – DXY, Bonds – will accelerate…when the prior market lows don’t hold. Just Starting.
With that, Careful and Happy Trading!
Samantha
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At LaDucTrading, I analyze price patterns and intermarket relationships across stocks, commodities, currencies and interest rates. I develop macro investment themes to identify tactical trading opportunities and employ strategic technical analysis to deliver high conviction stock, sector and market calls. Through LIVE portfolio-tracking, across multiple time-frames, my real-time Trade Alerts via SMS/email frame my Thesis, Triggers, Time Frames, Trade Set-ups and Option Tactics. I selectively use Unusual Option Activity (UOA) and Deal Flow but no proprietary indicators – just solid chart pattern recognition, volatility insight and some big-picture perspective thrown in. Twitter: @SamanthaLaDuc
