Traders' Library Blog

Stocata S&P 500 Analysis: October 29, 2016.

A week ago I wrote: "Last week I mentioned: " At this level, there is price support, support from the low side of the volatility channel, the low side of the up moving pitchfork and the 61.8% Fibonacci retrace level. This support may create some up retrace the coming week." That is what happened and the week is closing higher. The index finds now resistance from previous price levels, the 76.4% Fibonacci retrace, and the 100-day average. This resistance is probably enough to stop the up correction, and we may expect a further move down, in the first instance to the last low around 2115. Read my comments on the weekly chart and monthly chart for the longer term view."

Last week I mentioned: " The index finds now resistance from previous price levels, the 76.4% Fibonacci retrace, and the 100-day average. This resistance is probably enough to stop the up correction, and we may expect a further move down, in the first instance to the last low around 2115." The index came close to this level on Friday, but could not break the support at this level. The index may stay within the smaller trading range the coming week, waiting for the Presidential Elections. From a purely technical analysis point of view, I rather expect the index to break the support moving further down. There is certainly much resistance for a move up. Read my comments on the weekly chart and monthly chart for the longer term view.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: October 22, 2016.

A week ago I wrote: "It looks like the index broke the shorter term trading range reaching the 61.8% Fibonacci retrace level on Thursday with the low price of the day. At this level there is price support, support from the low side of the volatility channel, the low side of the up moving pitchfork and the 61.8% Fibonacci retrace level. This support may create some up pullback the coming week. There is room for a further move down, so medium term, we must expect a continuation of the move down. Read my comments with the weekly chart and monthly chart for the longer term view."

Last week I mentioned: " At this level there is price support, support from the low side of the volatility channel, the low side of the up moving pitchfork and the 61.8% Fibonacci retrace level. This support may create some up pullback the coming week." This is what happened and the week is closing higher. The index finds now resistance from previous price levels, the 76.4% Fibonacci retrace and the 100 day average. This is probably enough resistance to stop the up correction and we may expect a further move down, in first instance to the last low around 2115. Read my comments with the weekly chart and monthly chart for the longer term view.

Sylvain Vervoort http://stocata.org/

Trade War, Hillary and Donald, and your money

For the first time in over 100 years, we will have two candidates who are not in favor of free trade.

 

Both Hillary and the Donald believe that other countries are taking advantage of the US. They both want to through up high tariffs and duties.

 

The Donald will renegotiate with everyone and, of course, it will be beautiful and great after he is through negotiating.

 

Hillary will just hit a giant reset button. Oh wait, that didn’t work in Russia.

 

This is hurting the stock market right now. The market believes that free trade is good for the global economy. Shutting down global trade means a slower economy if not a recession/depression.

 

The last time we had a trade war was back in the 1930’s when just about every country went to war in trade. This was a major cause of the Great Depression. Suppressing trade means less sales for companies and therefore less profits and therefore laying people off.

 

But some people say, like Donald and Hillary, that the US is being taken advantage of. That other countries are using their currencies to take business from us. That they can export to us but we can’t export to them.

 

That is certainly true.

 

But we need to weigh that against having a Great Depression. I’ll take the small problems.

 

I doubt that Congress will back wholesale changes to the trade agreements in place so I don’t expect a lot of change when the new President comes in. But Presidents have a lot of power and can cause a trade war on their own if they want. Just not as extensive.

 

Look for the markets to keep suffering while the election is going on. This election will not cause a bear market but it will keep a cap on any big bull market.

 

P.S. Check out my free podcast on iTunes to keep abreast of these issues and their effect on the market. Search for Wealthbuilder.

Stocata S&P 500 Analysis: October 15, 2016.

A week ago I wrote: "As expected, the index remains in a small trading range, bouncing between previous index low levels and the 50 day moving average on the upper side and inside the BBS channel. I do not expect big changes the coming weeks. Rather a flat move towards the 100 day average while the US Presidential elections are some 4 weeks away. Long term I still expect a continuation of the down move. Read my comments with the weekly chart and monthly chart for the longer term view."

It looks like the index broke the shorter term trading range reaching the 61.8% Fibonacci retrace level on Thursday with the low price of the day. At this level there is price support, support from the low side of the volatility channel, the low side of the up moving pitchfork and the 61.8% Fibonacci retrace level. This support may create some up pullback the coming week. There is room for a further move down, so medium term, we must expect a continuation of the move down. Read my comments with the weekly chart and monthly chart for the longer term view.

Sylvain Vervoort http://stocata.org/

Stocata S&P 500 Analysis: October 8, 2016.

A week ago I wrote: "The first down target 2150, I mentioned last week, was reached on Monday. Tuesday and Wednesday closed the Monday gap. Thursday there was another move down once more reaching the 2150 target, but Friday there as another move up to the upper side of the small trading range, closing the week around the same level as the week before. The index remains close to the highest top of August. With the US Presidential elections November 8, we should not exclude a new higher high. However as I mentioned before I do not expect a continuation of the long term up move. Contrary I rather expect the long term down correction to be continued, but possibly it will only start after the elections. The coming week will probably remain within the short term trading range. Downward short term targets are at 2130, 2120 and 2095. Read my comments with the weekly chart and monthly chart for the longer term view."

As expected, the index remains in a small trading range, boucing between previous index low levels and the 50 day moving average on the upper side and inside the BBS channel. I do not expect big changes the coming weeks. Rather a flat move towards the 100 day average while the US Presidential elections are some 4 weeks away. Long term I still expect a continuation of the down move. Read my comments with the weekly chart and monthly chart for the longer term view.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: October 1, 2016.

A week ago I wrote: "The last support, the 100 day average and the S2 pivot support of the previous week was not broken. Contrary, Wednesday and Thursday there were higher index levels. A further move up was stopped by a previous price gap, the 50 day average, the upper side of the BBS band and the PP pivot level of the month. Friday there was a turn down, covering a previous price gap. If the index will continue the medium and long term down move, next week will have to show lower prices. Targets are 2150, 2120 and 2100. Read my comments with the weekly chart and monthly chart for the longer term view."

The first down target 2150, I mentioned last week, was reached on Monday. Tuesday and Wednesday closed the Monday gap. Thursday there was another move down once more reaching the 2150 target, but Friday there as another move up to the upper side of the small trading range, closing the week around the same level as the week before. The index remains close to the highest top of August. With the US Presidential elections November 8, we should not exclude a new higher high. However as I mentioned before I do not expect a continuation of the long term up move. Contrary I rather expect the long term down correction to be continued, but possibly it will only start after the elections. The coming week will probably remain within the short term trading range. Downward short term targets are at 2130, 2120 and 2095.

Sylvain Vervoort   http://stocata.org/