Resistance Trendlines

Stan and I are doing a free educational webinar an hour after the close tonight at the theartofchart.net looking at translating technical analysis into profitable trades. If you’d like to attend you can register for that here. The little retracement yesterday made the targets on the 60min sell signals on ES and NQ, and denied […]
Slope of Hope

Automatic Trendlines in SlopeCharts

I’m very pleased to announce some more improvements to SlopeCharts. First, you’ll notice some new items in Drawn Objects. Well, they’re not new per se, but we’ve made the functions more granular. I’ve highlighted the icons below – – from left to right, there is rectangle, oval, rectangle-with-text, and oval-with-text. You can probably figure out […]
Slope of Hope

Crucial Trendlines for Small Caps

It’s quite apparent that a cabal was assembled on February 11th whose purpose was to Completely Break the Spirits of All the Bears, and they’re succeeding marvelously. This morning alone has been a total whipsaw, with the initial surge-and-purge completely faking out dullards like myself. I must point out the Russell 2000, which has been […]
Slope of Hope

Weekly Distribution Arc Trendlines and Targets for SP500 and Dow

2016 begins very bearishly, and the selling continued this morning.

2016 isn’t off to a great start for the US Stock Market as China once again spooks global markets.

Let’s focus on the Dow Jones and the S&P 500, pinpointing the key levels and what decisions we need to make for adjustments.

Here’s the Dow Jones into 2016:

The Dow Jones peaked in early 2015 above 18,000 which is a key reference level for traders and investors.

A large sell-swing collapsed price under 16,000 to the rising 200 week Simple Moving Average (red).

From here, buyers bounced the market higher to end 2015 back at the 18,000 level.

What’s most important to us all now is the quick movement down away from 18,000 toward the new reference level on which we focus our attention: 17,000.

I drew a rounded arc trendline for your to highlight the distribution and change in trend from bull (up) to a possible new bear (down).

Check out the two lessons on Accumulation and Distribution available for you.

If we see the Dow Jones trade under 17,000 this January – soon – then we’ll expect another similar sell-swing down toward the 16,000 level like we saw in the middle of 2015.

You would want to be protective or defensive if this is the case.

Switch to protective and defensive strategies as long as the Dow Jones is under 17,000.

We would not look to add new positions (buy stocks) until the index is back above 17,000 or preferably when it trades back down 1,000 points lower into 16,000.

We will of course update you along the way about which strategies, stocks, ETFs, and tactics to use.

Here is the same picture in the S&P 500 Index if you prefer to use this as your benchmark index:

Like the Dow Jones, we see the same type of Arc or semi-circle price pattern at the 2,100 high.

Stocks peaked in early 2015 above 2,100, collapsed in August 2015 down to 1,900, and then recovered later back to the 2,100 level.

December and now early January give us another sharp decline in the S&P 500 toward 2,000.

Like the 19,000 level in the Dow Jones, use 2,000 for your key reference in the S&P 500.

If we continue to see the index beneath 2,000, we would preserve and protect capital, take profits on stocks that may also be breaking key support levels, and wait until the market trades lower before buying new stocks for our portfolio.

This is a quick perspective on the key levels and how we will be adjusting our strategies – keep checking back for more updates and recommendations on specific stocks.

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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).


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Quick Updating SP500 and Dow Jones Trendlines and Targets

What quick-reference levels should we be watching on the S&P 500 and the Dow Jones Industrial Average and why are the trendline patterns different?

Let’s start with the S&P 500’s rising wedge pattern:

There’s certainly more than one way to draw similar trendlines, but the pattern above shows a compressing or potential “Rising Wedge” pattern developing in the S&P 500.

Our key focal points are the easy-to-remember 1,970 (today’s spike-reversal low) and 1,982 which has developed as a short-term resistance/reversal level.

Note the negative divergences that undercut the early July and present rallies into the 1,980 level.

We’ll be neutral between these two levels and otherwise breakdown bearish on a clean impulse under the 1,970 region.

Otherwise, do note that the trend and structure is rising and it has been a better strategy to trade with the bulls/buyers rather than against them.

The structure is slightly different – as are the levels – in the Dow Jones:

The Dow Jones takes on a more traditional “Rising Parallel Trendline Channel” or Rising Rectangle Structure.

As such, the key focal points remain the 17,150 high and similar spike-reversal low off 17,050 (along with the midpoint or “Round Number” 17,000 level).

Failure here – in a break under 17,050 – suggests that the Dow will logically trade down as it has previously toward the midpoint (17,00)) then the 16,850 rising lower trendline support target.

No matter what others strategies or indicators you use for your analysis, keep these simple trendline targets in mind.

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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).


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Watching Converging Trendlines in Gold June 4

After a stellar move higher in Gold, price now faces a challenge of converging trendlines into the $ 1,630 area.

Let’s take a quick look at the current price level and develop a simple game-plan from there.

Here’s Gold (futures @GC) on the Intraday Hourly “Structure” Chart:

I drew two simple price trendlines that connect as many price highs and lows as possible.

The first is the Horizontal Support Line stretching from December 2011 to the present spike into $ 1,630.

The second is the Falling Trendline which connects to form a broader Triangle Price Pattern with “Apex” or Convergence here at $ 1,630.

We could also draw a lower trendline into the $ 1,550 level but we can also see how buyers stepped in during May’s lows as they did in December 2011 (and September 2011).

While there’s many other ways you can analyze the current Gold price chart, be sure to take into account this trendline convergence or overlap into the $ 1,630 area.

That doesn’t mean price is required to reverse here – it’s just a key level on which to focus and plan short-term trades depending on whether trendline resistance holds (bearish if so) or breaks (bullish above $ 1,640 for confirmation).

A push/breakthrough beyond $ 1,640 strongly suggests a Structural Reversal of the short-term trend, implying higher targets ($ 1,670, $ 1,700, etc) could be achieved in the context of a new intraday uptrend.

The recent push above $ 1,600 locked in a “Higher High” which is the first step to a structural reversal).

As a quick additional note, the falling 50 day Exponential Moving Average – which has held successfully as resistance from March 2012 to present – rests at $ 1,620 to form an additional indicator confluence with the $ 1,630 area.

Keep an eye to this level as we see whether Buyers/Bulls or Sellers/Bears win the current “Battle for $ 1,630″ and $ 1,600.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available!


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