AIG Support Failure

One of my financial shorts is none other than bailout queen AIG, shown below with scumbug who should burn in hell for all eternity Joe Costello. For the short-memoried among you, he’s the asshole who got paid hundreds of millions of dollars, while the stupid taxpayers (that’s us) bailed out this worthless firm to the […]
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A Wednesday Market Pullback to Support Target

Surprisingly, the market can actually trade lower!

Today saw a successful retracement swing – finally – toward the first target at the rising 20 day EMA.

What’s the level and what’s the play from here?

Netflix NFLX

In an uptrend, price typically swings up to a new high (toward the upper Bollinger Band) and then swings down to form a higher low as buyers step in (and bounce the market) up away from rising trendlines or moving averages.

This has been the case through most of 2017 except for October when price defied gravity in an extended upswing without a pullback.

TODAY we’re finally seeing that pullback to the safety zone and rising 20 day EMA target.

What’s the plan from here?

Note the Green and Red Price Pathways for planning your next trade(s) within the uptrend.

A support bounce here just keeps us bullish in the impossibly rising bull market while a breakdown beneath t0day’s low target near 2,540 suggests a steeper pullback (look at the other examples in 2017) toward the rising 50 day EMA and lower Bollinger Band targets overlapping 2,520.

Stay safe!

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

Support Pivot in Play for Netflix NFLX Here

Netflix (NFLX) shares continue the uptrend in motion and we just saw a sharp pullback to a key support level.

What’s the level and what’s the play from here? 

Netflix NFLX

Shares continue the sequence of higher highs and higher lows in the context of rising moving averages, all of which define uptrends.

The goal then is to buy pullbacks (retracements) to the rising moving averages, Fibonacci Levels (advanced), or trendlines.

The most recent pullback took us just beneath $ 180 per share at the rising 50 day EMA (blue) ahead of the power-surge to new highs above $ 200 per share.

Here we have a smaller pullback to the rising 20 day EMA (green) and an initial push up away from it unfolding right now.

Continue focusing on the rising moving averages and the “liquidation pocket” (sell swing) beneath the 20 day EMA which opens an alternate thesis pathway back toward the rising 50 day EMA near $ 185.

Stay safe!

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


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Critical Support Shelf Play in Amazon AMZN Right Here

Amazon (AMZN) shares tumbled from the (almost) $ 1,100 peak in July and have remained weak.

Let’s pinpoint a critical price point that will be key to trading the next swing for this popular stock:

AMZN Amazon

We’re dangerously close to forming a Head and Shoulders price pattern with a neckline at the $ 940 level.

Buyers continue to hold support – and create rallies – off this critical price target.

With reversal candles developing here today, we’ll hold our dominant thesis to expect another bounce.

However, if bears gain control and crack price beneath $ 940, expect a quick liquidation event toward the rising 200 day SMA (red) near $ 910 per share.

If you’re playing options, swing trading, or day trading this big name, frame your next decision in terms of the departure away from $ 940.

Come join us to learn these tactics (beyond this simple/quick update) and have an evening game plan you can use effectively for the next trading day.

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


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Market Slams First Support Target on Volume Profile Chart

If you made note of yesterday’s “Professional Volume Profile ‘Look Out Below!’ Levels” post, you’ll be happy to note that the Emini trades RIGHT at our first target now.

Here’s today’s updated Volume Profile (at price) Chart with these key target levels:

Volume Profile

Thanks to Think or Swim’s Volume Profile Study, we can pinpoint which exact levels where volume has traded with price – and more importantly for us, where it has not.

This is similar to Market Profile logic with the vertical distribution but it takes into account volume traded at specific prices.

Namely when the bars on the right side of the chart are longer, MORE volume transacted at that price.

Conversely where the bars are smaller, less volume transacted at that price.

We can consider the larger-volume areas as “acceptance” or support/resistance levels and the lesser-volume areas as “open air” where price traveled quickly without transacting many contracts (volume).

As you saw in yesterday’s post, IT MATTERED because the market just plunged through “Open Air Pockets” (no volume/no support).

Right now we’re trading off the 2,493 Red High Volume Node from yesterday’s chart.

We’re seeing at least a small intraday bounce here off the 2,493 level that we targeted yesterday.

Aggressive traders could have short-sold the departure from the 2,506 level or beneath 2,500 as price moved rapidly toward 2,493 and the trade would have been successful.

And what now?

IF sellers crack us under 2,493, there’s not much volume-at-price support until we hit the pocket near 2,460.

That’d be very helpful information to know to develop your trades.

 

Come join us to learn these tactics (beyond this simple/quick update) and have an evening game plan you can use effectively for the next trading day.

Afraid to Trade Premium Content and Membership

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

ULTA Beauty Plays Desperately for a Longer Term Support Bounce

Can they do it?! Can they do it?

Buyers will be eager to step in to hold support at the current critical pivot for ULTA shares.

What’s the pivot and what’s the swing trading play from here?

ULTA Beauty Support Bounce Play

Before we get to the pivot play, let’s look at the beauty of the divergence and clear reversal pattern from the $ 300.00 per share level.

Shares advanced in a strong uptrend on higher momentum and volume, especially in 2016.

That situation deteriorated with a lengthy negative momentum AND volume divergence in place as we stepped into 2017.

Buyers gave it one more go, exhausting their campaign when shares peaked above $ 300 on a massive, year-long divergence with a V-Spike Reversal Top Pattern.

The end-result was the expected, logical sell-swing toward rising moving averages, and sellers broke price beneath the rising 20 and 50 week EMAs very easily.

Now we’re at the “final support” pivot of the prior lows from two big reversals in 2016.

Buyers can plan a bullish-style BOUNCE rally trade up away from the $ 230 per share level, placing stops just beneath the critical support zone.

Short-sellers must admit that it’s far too late to BEGIN a campaign of short-selling here, as the better play was on the initial reversal back beneath $ 300 or on any of the breaks beneath the 20 or 50 week EMAs.

However, short-sellers can remain patient/neutral here ahead of a possible breakdown beneath $ 230… meaning buyers won’t be able to stop the selling pressure with their reversal/support plays.

As a trader, your goal is to take advantage of the WINNING side and join with them as price “departs” up away from, or down beneath, the $ 230 key pivot.

Frame your trades in terms of the departure from this key pivot – and keep it simple.

Afraid to Trade Premium Content and Membership

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Corey Rosenbloom, CMT

Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

Critical Swing Trader Support Test in Netflix NFLX Here

Netflix (NFLX) gives aggressive traders a chance to play a triple-support price level now.

Let’s pinpoint this confluence and plan the “departure” trade from this critical pivot:

Netflix NFLX

We’re seeing three factors overlap as probable support just beneath $ 170.00:

  • The 50% Fibonacci Retracement
  • The 50 day Exponential Moving Average (EMA)
  • and the Prior Price High from June 2017

I highlighted this event to members in our “Swing Trade Section” of our Daily Strategy.

Today, we’re seeing an initial bullish bounce along with the market.

For now, watch $ 167 and the $ 170 zone as critical support, playing the bullish departure “up away from it” with a confirmation breakout above $ 175.00.

However, the bearish ‘breakdown’ thesis triggers beneath $ 165.00 and especially $ 162.00.

Place your stops and plan your short-term trade(s) with these levels in mind.

Afraid to Trade Premium Content and Membership

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

US Dollar Falls to Key Target Make or Break Support Price July 31

If you’ve been following the US Dollar Index, you may have been surprised with how rapidly price collapsed from the 100 level toward the current major support target of 92.

We’ve been expecting and trading this development in the membership, though it’s occurred much faster than expected, yet here we are at our longer-term price target.

What is it and what’s the quick plan from here?  Let’s take a look.

US Dollar Index DX Support Fibonacci

With the exception of a FAILED BREAKOUT and BULL TRAP above the 100 level, the Dollar remained within a multi-year sideways trading range or rectangle price pattern between 92.00 (where we are now) and the 100 level (where we were only a few months ago).

Price traveled the bearish pathway in a single swing without any stable retracement along the way (compare the prior two bearish pathways in early 2015 and 2016).

We have THREE factors at a confluence support level:

  • The 50% Fibonacci Retracement
  • The rising 200 week Simple Moving Average (red)
  • and of course The Prior Price Support/Reversal Level

As traders, we never know what will happen but instead plan dominant (expected) and alternate (unexpected) theses and then build our trades from there (often playing the departure from a key price level).

We’ll label the dominant thesis as a “Support Bounce” play up away from 92 to play back toward 94.50 and higher and thus hold out for the alternate “Bearish Breakdown” play on a trigger-break beneath 92.00 (targeting 90.00).

Get your trades and plans ready for what happens next!

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

Critical Support Test Challenge for Goldman Sachs GS

Goldman Sachs (GS) reported positive earnings that beat expectations yesterday… yet the stock fell.

Shares now face a critical “Make or Break” support challenge at a key confluence level.

What is it and what’s the short-term trade from here?  Let’s plan it:

Goldman Sachs GS Flag Support

As a long-term trader, it still frustrates me to no end to see a stock beat earnings yet collapse lower.

That’s one reason I focus so much of my trading on technical analysis – charts make sense!

Anyway, earnings aside, the chart reveals Goldman Sachs (GS) shares to be at a critical confluence support pivot.

We’re specifically seeing the overlap of the rising 200 day SMA (red) with the lower rising “flag” trendline of a rising parallel trendline channel (yellow highlight).

Ideally shares bounce here and trade the bullish pathway toward the $ 230 level again.

However, traders should be ready to short-sell (or take stops) on a breakdown/breakout beneath this support level which could collapse shares quickly toward the $ 210 per share prior low from June.

Even if you’re not trading this stock at this juncture, it should be fun to watch what happens next for your educational reference.

Afraid to Trade Premium Content and Membership

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


Afraid to Trade.com Blog

The Tesla TSLA Daily Chart Drop to Support July 6

Tesla (TSLA) shares plunged this week, collapsing from the $ 380+ peak toward the $ 300 level.

How did it happen and what’s the play from the currently achieved support target?

Let’s discover together:

Tesla TSLA

First, take a look at yesterday’s lesson on trend reversals in Foot Locker (FL).

With that information, we see a similar push up to new highs, a “double top” or “failure swing” testing the prior high above $ 380 along with caution/warning signals from momentum.

Volume similarly declined (diverged) on the second peak, locking in a non-confirmation of the new high.

From there, sellers became aggressive, collapsing the price lower beneath the 20 day EMA and then rapidly under the 50 day EMA.

The 20 and 50 day EMAs serve as targets and possible retracement buy points during uptrends.

Tesla shares plunged beneath these levels, not stopping once.

The breakdown took us toward the midpoint of the prior consolidation (highlighted) near $ 315 per share.

IF buyers fail to step in here and support the price, then we’ll likely see a full fall toward the next target of the rising 200 day SMA.

For this week and beyond, use the $ 315 bull/bear pivot as your “departure point” for your trades.

 

 

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”


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Child support payments don’t contribute to children’s well-being; fatherless children tend to be obese

Professor Kari Adamsons of the University of Connecticut spoke about her research at the International Conference on Shared Parenting 2017.

What is American society getting from the roughly 3 percent of GDP that we spend making sure that alimony and child support cashflows are established and maintained? Professor Adamsons says that research psychologists can’t find any effect on American children’s well-being whether or not child support was being paid from one parent to the other.

Part of this may be due to the fact that adults who receive child support cash often respond by cutting their working hours and therefore the net spending power within the winner parent’s household may not change much.

Adamsons, however, described big differences in child-support/well-being correlation based on the race of the mother. For “non-white mothers” (Rachel Dolezal qualifies?), when child support was paid there was a negative effect on the children’s well-being. This is consistent with previous research, to the extent that “low-income” in the U.S. tends to overlap with “non-white,” e.g., see the Children, Mothers and Fathers chapter:

“Child Support and Young Children’s Development” (Nepomnyaschy, et al, 2012; Social Science Review 86:1), a Rutgers and University of Wisconsin study of children of lower income unmarried parents, found that any kind of court involvement was associated with harm to children: “We also find that provision of formal [court-ordered] child support is associated with worse withdrawn and aggressive behaviors.” The authors found that informal (voluntary) support from fathers could be helpful to children living with single mothers but court-ordered support, even when the cash was actually transferred, was on balance harmful.

It turns out that contact with the father was also a negative for well-being when the mother was non-white. Certainly Adamsons wouldn’t have suggested this, given that even tenure has its limits, but it seems that if what society cares about is child well-being and we accept that courts must deal with children on a rushed wholesale basis, the laws and defaults should be different depending on the race of the litigants(!).

Somewhat separately, Adamsons talked about what research psychologists have found regarding the effects of losing a father. Why are we always in the running for World’s Fattest Nation? Could that be related to the fact that we have the largest percentage of children without two parents (stats)? Adamsons said that “fathers have a strong and unique [not replaceable by another adult, such as the mother] influence on obesity.” What about the fact that courts usually assign a father to at least an every-other-weekend babysitting role? “That kind of parental involvement is probably not helpful. It isn’t normal. When they’re visiting with the father, the kids are waiting to go home to the mother.”

Philip Greenspun’s Weblog

Toll-Free Tech Support

Well, the market – – especially the high-tech-laden NASDAQ market – – had been in full-blown swoon mode last night, but around the level 5640, it found the same support it had found twice before. The Powers That Be aren’t too keen on red quotes on their screens, and sure enough, Goldman Sachs fell all […]
Slope of Hope

Divorce litigation, child support, and Costco in Iceland

Conferences are fun because you get to talk to people from all over the world. Of course, at the International Conference on Shared Parenting 2017, the subject of the conversation tends to be divorce, custody, or child support litigation. Over coffee with Ragnheidur Gudrunardottir, the District Commissioner of Greater Reykjavik, I learned as much as I could about all things Icelandic.

I told her how shocked I had been at the prices when changing planes last summer on my way to the Royal Caribbean Baltic cruise. How could Icelanders afford it? Ms. Gudrunardottir agreed that the country might be due for another economic, um, adjustment. “Costco is coming to Iceland and 40,000 people signed up for memberships before they even opened,” said said. “That’s in a country with a total population not much over 300,000.” (story)

As in Denmark or Sweden, divorce can be obtained via an administrative process. It takes 2-3 months, but there may be an additional delay for the finalization due to a requirement that people spend “6 months separated from bed and table.” (Note that North Carolina uses similar terminology within their litigated process.) If parties can’t agree they may spend up to one year mediating. As a last resort, litigation is available and she estimated a maximum of $ 10,000 in legal fees might be spent, similar to what we heard about in Denmark.

Also as in Denmark, which formerly ruled Iceland as a dependency, child support seems to be calculated as a multiple of a basic amount. If an Icelander has custody of a child with a non-working co-parent, the government pays about $ 300 per month in “child support”. If the co-parent earns a good wage, the cashflow comes from the co-parent and is referred to as “alimony” even if the parents were never married. “What if you defrosted those rich bankers from 2007 and one of them was being tapped as a co-parent?” I asked. Ms. Gudrunardottir estimated that the alimony payment would be 3X the basic amount, or about $ 900/month ($ 10,800). This is a little more than the Danish maximum, much more than the Swedish maximum, and only a fraction of the potential revenue available in the U.S. (see California, for example). The after-tax (net) average monthly wage in Iceland is about ISK 370,000 (Wikipedia), $ 3740. Thus an Icelandic child support plaintiff would need to be collecting on a minimum of four children before being able to out-spend a median wage earner.

As was typical of conference attendees from Civil law and administrative divorce-oriented countries, Ms. Gudrunardottir didn’t say “Now that I have learned about the marvels of litigation and how Americans with lawyers and witnesses really get at the truth, I wish we had more litigation and Common law procedures in Iceland.” (And, correspondingly, people from the litigation-oriented societies (U.S., U.K., Australia) would talk about how litigation might be improved, almost never about how it could be replaced with an administrative procedure.)

Philip Greenspun’s Weblog