Updated Friday 11/1/19 2:59 AM EST Table of support & resistance levels Below is the most current projections of support and resistance levels for short and intermediate term outlook. Please note that the S/R levels have not changed from yesterday as there were not a lot of significant market actions today. Planning your trades The long term outlook for stocks is still cautiously bullish. This means long-term investment portfolios can stay in stocks for now. We will elaborate on “why bullish” question in our weekend analysis. For the intermediate term and short term, we need to monitor $VIX and $VXN closely. These 2 indicators are the most sensitive to the true underlying market moods. All other market internal indicators serve to confirm and provide context. But $VIX and $VXN are the leading ones. Between yesterday and today, $VIX and $VXN have formed the kind of pattern that says they are right on the verge of a significant message. If $VIX rises sharply up into the zone of 15 tomorrow, and $VXN rises sharply up into the zone of 18.7 tomorrow, then it’s good for the bulls. This sharp surge in fear is what we call “sudden but benign worry”. It does not seem intuitive, but it is the kind of worry that actually brings in more buyers to really launch the next intermediate-term up swing. We shall call this intermediate-term up swing "Surge9". And Surge9 can rise as high as Resistance3 by late November. Therefore, the sharp surge in $VIX and $VXN tomorrow serves both as a signal for a bullish intermediate term for stocks, and provides a good short-term entry point for riding Surge9 upward. On the other hand, if we see $VIX gap down to below 12, and $VXN gap down to below 15.5, then the bulls should start to worry. $VIX and $VXN are unlikely to stay low or go lower than those zones. Instead, they will start to rise for real. Real fear will deter buyers, which means Surge9 is unlikely to materialize. We may instead see a choppy turbulent market again for November. So if you observe the sharp rise as described above in $VIX $VXN tomorrow Friday, you can start to scale into long positions in $SPX $NDX SPY QQQ TQQQ in the zone between Support1 and Support2. On the other hand, if you see the sharp gap down by $VIX $VXN tomorrow Friday, then think about how you might want to ride out a possible choppy November. You may want to tighten the protective stops of your long positions in $SPX $NDX SPY QQQ TQQQ. And take partial profits in those longs. By the way, we do not recommend that you short this market just yet. Even though $VIX $VXN may surge immediately, and prices may drop sharply in the short term, it’s going to be very tricky to time the short trade just right. TVIX and UVXY will be held down by the effects of contango. SDS and SQQQ may not respond 1:1 to the actions of $VIX $VXN. If it turns out that we will have a choppy November, then first prices will form a top of some sort. That would be the place to enter a short-term short positions. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them.
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Updated Thursday 10/31/19 12:31 AM EST Market context The Fed cut its fed funds target rate Wednesday to 1.50% to 1.75% today, the 3rd consecutive rate cut this year. The initial reactions from stock market and bond market were muted. Traders got a little more excited when Powell hinted at keeping rate low for now, as long as inflation doesn’t surge. As a result, $SPX $NDX SPY QQQ TQQQ all spiked up in the last hour. However, Powell did not hint at additional rate cut in December. And “not raising rate” is not the same as “cutting rate”. The Fed is basically leaving the door open for wiggle room. They have flexibility to do what they might need to in December: another cut or do nothing. In looking at the last-hour spike in price, some of us may start to feel the effects of FOMO. Is it too late to jump on this bullish bandwagon at this point? Will the market take off without us? First let’s take a look at how high prices can go in the intermediate term. Table of support & resistance levels We updated the S/R table, and added Resistance3 to show how high prices can climb in the intermediate term. Projections based on market internals In the intermediate term, market internals show a bullish bias. This tells us that Surge9 is likely to happen, and it can go as high as Resistance3. However, In the short term, some market internal indicators are suggesting the high probability of price pullback first. This actually should be music for the bulls. We want to see price dropped by a reasonable amount, enough to bring in a lot more buyers in order for Surge9 to really be launched. The specific indicators that are suggesting short-term price pullbacks are:
This is not the market of a complacent bull like 2017. This is a nervous, worrying, twitter-driven bull market. The strongest buying tends to show up after big surges in volatility. So in order to bring in enough buyers to truly launch Surge9, $VIX and $VXN have to rise some amount, and stock prices have to pull back some amount. Planning your trades Tomorrow Thursday we may see $VIX gap down to below 12, and $VXN gap down to below 15.5. $SPX $NDX SPY QQQ TQQQ may rise into the zone between Resistance1 and Resistance2. This will be an uncomfortable short squeeze, causing more bears to buy to cover. If you are not in a long position already, you may be experiencing FOMO. But know that a lot of the buying may be coming from short covering, rather than true long-term buyers stepping in to deploy a lot of fresh cash to work. So ask yourself, do you want to deploy a lot of fresh cash here, or wait for a decent pullback which is likely to come soon? For us, the low-risk, high-probability move is to wait for the pullback before entering long positions. The zone between Support1 and Support2 for $SPX $NDX SPY QQQ TQQQ is a good place to scale in long. Chances are high that there are enough buyers in this zone to enable $SPX $NDX SPY QQQ TQQQ to climb up to Resistance2 in the intermediate term. By the way, we do not recommend that you short this market right now. Yes, prices may pullback. But they may not. And if that's the case, you will be squeezed badly. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated 10/29/19 at 1:14 PM EST Table of support & resistance levels $SPX $NDX SPY QQQ TQQQ gapped up and surged up above Resistance1 today. In the process, they pushed their respective S/R levels up. We revised the S/R table to show the new price landscape. Projections based on market internals As we’ve been sharing with you in the last few posts, market internals are still showing conflicting messages, but overall they continue to show an intermediate-term bullish bias. Within this intermediate term bullish bias, there are now more instances of bearish divergence.
Planning your trades The main message from market internal indicators is “cautiously bullish” for now. Assuming that the Fed won’t be announcing any new rate raise, and assuming that we don’t have sudden really bad economics news, we think that $SPX $NDX SPY QQQ TQQQ are likely to rise up to Resistance2 during Surge9. If you are long $SPX $NDX SPY QQQ TQQQ for long-term investments or intermediate term trades, do consider taking partial profits and tightening your stops. We don’t recommend initiating new long positions just yet. Be patient and wait for Powell to speak first. Chances are good that $SPX $NDX SPY QQQ TQQQ will re-test Support2 one more time before launching into Surge9. We do not recommend that you short this market right now. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Sunday 10/27/19 at 8:09 PM EST Market context This coming week will be full of events that have the ability to move the market more substantially than what we saw last week. Here is a complete list of important events. Certainly the most important events will be FOMC rate announcement on Wednesday 10/30 at 2 PM EST. It is widely believed that the Fed will cut rate by another 0.25%. However, it is up in the air right now as to what Jerome Powell will say regarding December and future rate cuts. Trick or treat? May be neither. According to Goldman Sachs, the Fed is unlikely to raise rates, but they also are unlikely to continue with another rate cut in December. They may simply just take the bowl of treats away. So from a trading standpoint, what is the best way to navigate this market? Before diving into that, let’s take a look at short-term support and resistance levels. Table of support & resistance levels We updated the S/R table based on Friday’s price actions. Observe that Resistance2 is a new all-time high for $SPX $NDX SPY QQQ TQQQ. Projections based on market internals Market internals are showing conflicting messages, but overall they continue to show an intermediate-term bullish bias. NYSE market breadth, as measured by its cumulative Advance/Decline line is at an all-time high. Nasdaq market breadth is rising in the short term as well. But it is going sideway in the intermediate term. This is a bearish divergence, but this kind of bearish divergence can go on for quite a while. The percentage of bullish stocks have declined for both NYSE and Nasdaq since July. This means that while $SPX $NDX are reaching their all-time highs, there are lesser number stocks participating in this bullishness. This is another bearish divergence from the current price levels for $SPX $NDX. This is an advance warning, but it is not a signal that we can trade on just yet. It tells us to be cautiously bullish. CBOE equity put/call ratio shows that we are still in buying mode. According to the daily chart of this ratio, no big selling surge is coming in the short or intermediate term. Volatility, as measured by $VIX $VXN, is dropping sharply towards the lows of late July and mid April. The simple interpretation is that dropping volatility is bullish for stocks. Recall however that $VIX $VXN soon surged after this low level in late July and mid April. We are likely to see this happen again. But predicting $VIX $VXN surge is tricky. Here’s what we think will most likely will happen. $VIX is likely to rise back up to 15 later this week. $VXN is likely to rise back up to 18.7. But then both $VIX and $VXN are likely to drop sharply downward again one more time. This complicated $VIX $VXN move will bring about a likely Minor Drop in stocks after FOMC, and then a Surge as the Up Trend resumes. Planning your trades So exactly how do we trade all this conflicting info? First of all, we think that it’s quite risky to position your trades ahead of FOMC on Wednesday. So exit and stand by with your cool cash if you can. Be patient and wait for Powell to speak first. Assuming that the Fed won’t be announcing any new rate raise, and assuming that we don’t have sudden really bad economics news, we think that $SPX $NDX are likely to rise up to a new intermediate-term high at Resistance2. But don’t jump into long positions from the current price level just yet. Chances are good that $SPX $NDX SPY QQQ TQQQ will re-test Support2 or Support3 one more time before rising for real. We think the zone between Support2 and Support3 is a good place to scale into long positions in $SPX $NDX SPY QQQ TQQQ, after FOMC announcement. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Friday 10/25/19 at 12:27 AM EST Table of support & resistance levels We updated the S/R table based on today’s price actions. We have nudged Resistance1 and Support1 levels upward, compared to yesterday. In the short term, this is likely where the bulls and the bears will continue their battle. Projections based on market internals NYSE cumulative A/D line daily chart is pretty much an all time high. But there are other indicators standing in the way of total bullishness.
So in the short term, $SPX $NDX SPY QQQ TQQQ will most likely drop down to at least Support2. What comes after that will depend on FOMC. Planning your trades Next Wednesday 10/30, all eyes will be on the Fed again for FOMC announcement. Markets expect the Fed to announce a rate cut of 0.25%. You can read more about FOMC expectations here. This rate cut is most likely already factored into the current price actions of stocks. Don’t expect major moves between now and Wednesday 10/30. But fireworks could come at 2 PM EST on 10/30, depending on what Powell has to say about future cuts. The prudent thing to do at this point is to take a break and wait until next Wednesday Oct 30. However, if you want to trade short term, the next high-probability move to consider is down. Amazon dropped 9% after hours today as their profits declined. This caused a sharp drop after hours for QQQ TQQQ. Be picky with your entry though. Wait for $SPX $NDX SPY QQQ TQQQ to get back up close to Resistance1. Wait for a hammer/doji to appear on SQQQ SDS hourly charts. This combination increases your chance of getting the entry price right, and avoid fake moves. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Wednesday 10/23/19 at 9:50 PM EST Table of support & resistance levels This S/R table still has the same levels as yesterday as the price landscape has not changed in the short term. Market context $SPX $NDX SPY QQQ TQQQ tested Support1 overnight, and started climbing up this morning. We wrote in our trading plan last night:
As we write this after the trading hours of Wednesday 10/23, $SPX $NDX futures and SPY QQQ TQQQ have reached Resistance1. We posted a notice on Stocktwits that you should take your money and run. We hope you did! Projections based on market internals Even though market internals are still showing an intermediate term bullish bias, not all market internal indicators are equally bullish. Under the hood, Nasdaq market breadth has been lagging NYSE. And on the price action charts, small caps ($RUT IWM TNA) have been going sideway since February this year. The key conclusion here is that the appetite for risk has been greatly reduced. But the other important information to keep in mind is that big money is not ready to give up on this market yet:
As a result we have this Choppy Market that may persist for a while. What this means is that we still have to endure more short-term rapid swings up and down (Bounce and Drop). In the very short term, $SPX $NDX SPY QQQ TQQQ have pretty much risen back up to Resistance1 as we write this. As we mentioned before, Resistance1 price level most likely will bring out more sellers tomorrow. As a result, prices will likely drop back down again from Resistance1, possibly all the way to Support3. What will happen after $SPX $NDX SPY QQQ TQQQ drop all the way down to Support3? Support3 is a low enough short-term price level to bring in more buyers to start a new Bounce up, possibly all the way up to Resistance2. Keep in mind that this good size Bounce is unlikely to happen until $SPX $NDX SPY QQQ TQQQ find enough buyers at Support3. Planning your short-term trades We hope you have locked in profits from your long $SPX $NDX SPY QQQ TQQQ positions today. If you are considering shorting the market, we recommend shorting $NDX QQQ TQQQ. $SPX SPY are too bullish for shorting purpose. UVXY TVIX are too risky as M1 contango is at almost 7% right now. Wait until after $NDX QQQ TQQQ have risen at least into the zone between Resistance1 and Resistance2. Use the chart of SQQQ as a guide to short $NDX QQQ TQQQ as follows.
Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Tuesday 10/22/19 11:46 PM EST Table of support & resistance levels We updated the S/R table based on the latest price actions. These are short-term S/R levels to help you plan your short-term trades. Projections based on market internals Market internals are still showing an intermediate term bullish bias. The good news from this is that we are unlikely to see the start of a Down Trend any time soon. However, as you can tell from just simply looking at the charts of $SPX $NDX SPY QQQ TQQQ, we are not done with this Choppy Market yet. (Sorry but the term “Non-Trending Market” was too much of a mouthful.) What this means is that we are still have to endure more short-term rapid swings, up and down (Bounce and Drop). In the short term, $VIX $VXN charts, as well as NYSE and Nasdaq A/D charts, show that volatility is likely to rise a bit more. This means $SPX $NDX SPY QQQ TQQQ are likely to drop a bit more. $SPX $NDX SPY QQQ TQQQ are most likely going to drop down to test Support2 tomorrow. After that, price movements will be unpredictable until one of these 2 conditions happen:
If you have short positions in $SPX $NDX SPY QQQ TQQQ, wait for them to drop down to Support2, and then tighten your short positions there and lock in your profits. When $SPX $NDX SPY QQQ TQQQ rise back up to Resistance1 as described above, you can consider re-entering short. When $SPX $NDX SPY QQQ TQQQ drop all the way down to Support3 as described above, you can consider entering long. Don't forget FOMC meeting announcement is next Wednesday October 30. Market is unlikely to make any major moves until then. You can continue to hold on to investments in long-term accounts for now. Based on market internal indicators, $SPX $NDX are unlikely to start a new Down Trend in the short or intermediate term. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Tuesday 10/22/19 8:59 AM EST Table of support & resistance levels We updated the S/R table based on the latest price actions. These are short-term S/R levels to help you plan your short-term trades. Projections based on market internals Market internal indicators are all sending out a highly bullish message. The current Bounce is capable of turning into the resumption of the Up Trend that started on 12/26/19. However, $SPX $NDX SPY QQQ TQQQ are likely to gap into Resistance1 at open today. There is still a fair amount of skepticism from buyers about the ability of this market to rise above Resistance2. Therefore, there is a high probability that $SPX $NDX SPY QQQ TQQQ will need to drop a bit and test at least Support1 first. This test is necessary to assure existing bulls, and to bring in more buyers. If enough buyers arrive, $SPX $NDX SPY QQQ TQQQ can go all the way to Resistance2, and possibly to rise above it. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Sunday 10/20/19 at 2:24 PM EST In this weekend analysis, we will try to address a number of questions that our readers have been asking. Non-trending Market We have been using the term “Volatile Market” to describe the type of market that stocks have been in since mid-September. This term is causing some confusion, so we are going to re-label it “Non-trending Market”. As this label implies, stocks are not in an Up Trend or a Down Trend right now. $SPX $NDX have been going sideway in choppy trading conditions since mid-September. $RUT have been in this Non-trending Market since late February this year. Knowing what type of market stocks are in is important, because it dictates our trading strategy. In calm Up Trend market, it’s a lot easier to make money. We enter and add to our positions during the Dips. We hold for longer periods of time. After a while, stocks will go up in Up Trend market and we are likely to make money. Down Trend is a whole other beast that we will write about in another post. In Non-Trending Market like right now, we have to be prepared for rapid small swings up and down. Therefore, we cannot hold our positions for too long. We try to buy lower, sell higher, and repeat. Note that while it is possible for volatility ($VIX $VXN) to drop down into a lower range, stocks can still stay in Non-trending Market longer. We are in that scenario right now. Stock market sometimes needs to spend time in Non-trending Market while the bulls and the bears fight it out. Eventually, one set of sentiment will prevail and starts to dominate. If that sentiment is bullish, stocks will pivot into Up Trend from Non-trending Market. Conversely, if that sentiment is bearish, stocks will pivot into Down Trend. $SPX $NDX $RUT are in Non-Trending Market right now, but in the intermediate term time frame, $SPX $NDX are likely to resume the Up Trend that started on 12/25/18. Know your individual market Many of you have asked for our opinions about European markets, Asian markets, emerging markets, gold, oil etc. We must apologize again and say that we do not trade anything but $SPX and $NDX. We monitor small caps, the Dow, global stock markets, as well as bonds, gold, $USD in order to identify macro patterns. But we do not trade them. We use this information to provide context for the movements of $SPX and $NDX. We have learned the hard way that trying to trade too many markets is likely to lead to losses. We cannot possibly understand the nuanced moves of so many different entities. We have no trading edge when we attempt to trade too many markets. We urge you to reduce the number of markets you trade in. Just ask yourself before you place a trade in a particular market: what is your edge in this market? Do you have any additional data to support your thesis besides chart patterns? Know your time frame We also urge you to pay close attention to the time frame in our analysis, and in your trading strategy. Stock movements are highly dependent on the context of its time frame. It is possible for stocks to start a small swing downward on the hourly chart, while they are still in an Up Trend on the daily chart. This is otherwise known as the Dip. Based on the questions we have received, we want to clarify. We always try to provide you with long term and intermediate term guidance so that you can understand the context of the short-term market moves. However, when we discuss the actual trade setups in our post, we are discussing short-term trades that are likely to happen in 1-3 days. We have found that it is possible to identify the high-probability short-term swings that may span the next few days using our trading system. Combining this with the information from the S/R table and good position management techniques can lead to a profitable short-term trade. Many of you have written to us to share your success in doing this. However, price actions in all time frames are driven by price levels, and supply and demand at different price levels. In other words, stocks will continue to go up until they become too expensive and bring out a lot more sellers. Conversely, stocks will continue to go down until they become really cheap and bring out a lot more buyers. It is not realistic to make projections such as “stocks will go up for 3 days, then down for 2 days, then up again etc..” We are highly suspicious of such time-based predictions because no one has that kind of crystal ball. This is why our trading system is based on price levels, supported by other indicators such as market internals. Table of support & resistance levels We updated the S/R table based on the latest price actions. These are short-term S/R levels to help you plan your short-term trades. Projections based on market internals Before trading started on Thursday, we wrote “$VIX $VXN short-term charts show that volatility is likely to climb by a small amount, enough to bring about a Drop.” The Drop did start on Thursday and continued on Friday in a typical grinding down fashion. In the very short term, $VIX $VXN are not done rising just yet. $VIX will likely rise up to 15.5. $VXN will likely rise up to 19.5. This rise in short-term volatility implies that $SPX $NDX SPY QQQ TQQQ are not done with the current short-term Drop yet. In the intermediate term, however, $VIX $VXN charts show they are likely to drop, after this quick rise upward. $VIX can possibly drop down to 11.5, and $VXN to 14.5. CBOE equity put/call ratio daily charts show it is likely to drop as well. As volatility drops, it is bullish for stocks in the intermediate term. Market breadth, as shown in the Advance/Decline lines for NYSE and Nasdaq stocks, is rising and therefore bullish for stocks in the intermediate term as well. The percentage of bullish stocks is rising for both NYSE and Nasdaq stocks. This also confirms the intermediate term bullishness. In summary, the projection based on market internal for $SPX $NDX SPY QQQ TQQQ is this. In the very short-term, they are likely to drop down to test Support2. If they survive this test of support, it means that there are enough buyers stepping in at this price zone to support the Bounce upward. In the intermediate term, this Bounce can go from Support2 all the way to Resistance2. Planning your trades If you currently have short positions, we recommend that you tighten your stops, and consider exiting when $SPX $NDX SPY QQQ TQQQ drop down close to Support2. If you currently have long positions, think about whether you can live with $SPX $NDX SPY QQQ TQQQ retesting Support2, before prices will likely rise again as part of the Bounce. If you currently are not in any position, then hold off and wait for $SPX $NDX SPY QQQ TQQQ to retest Support2. A successful test here will likely bring in enough buyers to start the Bounce. Indicators of a successful test of support: On the hourly charts of $SPX $NDX SPY QQQ TQQQ, wait for a hammer or doji pattern to show up at Support2 or somewhere close to this level. However, if you cannot monitor charts intraday, then consider spreading your capital into 3 partial entries at:
For long-term investments such as in 401k accounts, keep this in mind. The odds are high that stocks will resume the Up Trend and continue higher, after we are done with the current Non-Trending Market. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. Updated Friday 10/18/19 at 8:17 AM EST Table of support & resistance levels We updated the S/R table based on the latest price actions. These are short-term S/R levels to help you plan your short-term trades. Projections based on market internals Yesterday we wrote “$VIX $VXN short-term charts show that volatility is likely to climb by a small amount, enough to bring about a Drop.” $VIX $VXN are likely to continue rising some more today Friday, as stocks are likely to continue the Drop a bit more today. However, the magnitude of this volatility rise will not be big. So as a result, the magnitude of this Drop in stocks will not be big. The odds are high that during this Drop, $SPX $NDX QQQ SPY TQQQ won’t go lower than Support1. After $SPX $NDX QQQ SPY TQQQ retest Support1, they are likely to rise up in a Bounce. This Bounce can take prices up to Resistance2 next week. Planning your trades If you currently are not in any position, then hold off and wait for $SPX $NDX SPY QQQ TQQQ to retest Support1. A successful test here will likely bring in enough buyers to start the Bounce. If you currently have short positions, we recommend that you tighten your stops, and consider exiting when $SPX $NDX SPY QQQ TQQQ retest Support1. If you currently have long positions, think about whether you can live with $SPX $NDX SPY QQQ TQQQ retesting Support1, before prices will rise again as part of the Bounce. For long-term long positions, the odds have improved for the bulls and long-term investors. Stocks are likely to continue higher after we are done with the current series of rapid swings. Disclaimer The information presented here is our own personal opinion. It is intended to supplement your own research and trading systems. Consider it as food for thought. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions. Note that we trade highly risky 3x leveraged ETFs. You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you. Please read more about them before trading them. |
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