The Price Action Lab Report – Friday, October 31, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – October 30, 2014

U.S. stock indexes rose on Thursday due to a positive GDP report. The S&P 500 rose 0.62%, NASDAQ gained 0.37%, the Russell added 0.82% and the Dow jumped 1.30%.

Bond prices were steady with the 10-Year Note yield at 2.31%, down one basis point. Crude oil prices reversed course with the spot price falling 1.13%. The US dollar rallied versus the Euro to $1.2609. Precious metals prices plunged due to the dollar rally. Spot gold fell 1.06% and spot silver plunged 3.69%.

Comment:  A vicious short squeeze is still underway, initiated by Fed comments and supported by economic news and earnings reports, while all negative factors that caused the correction in the first place are now ignored. Although this was not the most impressive V-bottom, it nevertheless left no breathing room to shorts that saw prices rising every day with virtually no pullback. Expect statements from more bears soon that they are giving up. Note that now this market finds fuel to rise mainly from bears and when there will be no more it will fall, maybe hard, despite any statement of support by the Fed, which seem to come at the right time. Verbal intervention is good but at the end of the day actual short covering is required for the market to move up because most professionals are selling the rallies and they take the profits and run. At some point things will become clear but until then we may see another all time-high in S&P 500, possibly even today, as overnight the futures are rallying due to more stimulus from the BOJ. Fasten your seatbelts.

Short-term Technical and Quantitative Analysis

The short in GLD hit its profit target at the open of yesterday with a gain of $2.27/share and the long in SLV hit its stop also at the open with a loss of $1.06/share. The short position in GDX has an open profit of $1.89/share and although the stop is at 17.06, covering at the open if not hit may be a good move due to developing oversold conditions. No new setups today but there are already enough pending. Also, one setup was cancelled due to price action. The table below shows two open positions and eight pending setups in 9 ETFs:

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This V-Bottom in S&P 500 is Not the Most Impressive One

The current V-bottom in S&P 500 is not the most impressive one of the last three years and after these formations became prevalent due to the Fed providing support at key market levels. Here is why.

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The Price Action Lab Report – Thursday, October 30, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – October 29, 2014

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The Long-Term Trend of Volatility is Up

Although the 1990s contributed to a decrease in the slope of the uptrend in volatility, the long-term trend is still up. Unless there is another reduction in the slope of this uptrend, either natural or engineered, stock market passive investing risks will keep increasing with more wild swings in portfolio values like those that followed previous tops.

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The Price Action Lab Report – Wednesday, October 29, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – October 28, 2014

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RUT(hless) Massacre

The Russell 2000 index rallied 2.86% yesterday to close above both its 50- and 200-day moving averages. In the last 7 days the index has gained 6.2%, which translates to a massacre for technical head and shoulders and double top traders.

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The Price Action Lab Report – Tuesday, October 28, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – October 27, 2014

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