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Risk Windows for the Week of 22nd May and Time to Kick the Can


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#1 Douglas

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Posted 20 May 2023 - 11:29 AM

According to my risk summation system, the days this coming week with the highest risk of seeing a turn in or acceleration of the current trend in the DJIA are a window stretching from Monday the 22nd of May through Tuesday the 23rd morning and a window on Friday the 26th. 

 

Last week the Monday risk window looked good with a gap at the close, but then petered out after just one day to the downside, so it goes in the dud bucket.  The judge is still out on the Friday risk window.  It did tag the high for the week.  As to whether it will amount to more than just a hill of beans awaits trading early this coming week.

PvUDx8L.jpg

 

The QQQ triangle finally broke nicely to the upside when everyone went all in on the big tech names since no one's going to stop making their cell payments in the coming recession.  

 

OMoaYpA.jpg

 

Now that the triangle is broken, there are just three little questions still remaining I guess: (1) will there be a pullback that tests the top line just broken before the Q's race on to Nirvana and (2) is there any significance to the focus of the triangle and finally (3) will the big boys finally open the gate back up and let the little guys into the party since the small cap breadth triangle below is clearly heading in the wrong way.

 

Vhn1srP.jpg

 

 

Finally, are you as tired as I am of watching all the monkey motion around increasing the debt limit?  A pox on both their houses.  At least the stock market is more or less ignoring it this time around.  If the news media would just stop reporting on it, maybe these publicity hungry clowns would wrap this three ring circus up and go home.  You just know all they are going to end up doing is kicking the can down the road yet one more time.  

 

Regards,

Douglas

 

 

 

 



#2 pdx5

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Posted 20 May 2023 - 05:45 PM

When 10 stocks make indexes move while the other 490 are lollygagging, what should we infer from it?
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#3 andr99

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Posted 20 May 2023 - 06:01 PM

When 10 stocks make indexes move while the other 490 are lollygagging, what should we infer from it?

 

that the remaining 490 will follow soon.....


forever and only a V-E-N-E-T-K-E-N - langbard


#4 Douglas

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Posted 21 May 2023 - 04:29 AM

pdx5, I imply that this narrow QQQ rally will fail. 

 

Andr99, the sticky inflation rate is why I think that the 490 will lead the 10 down instead of the reverse.  I could be wrong, I often am, but my personal shopping experience says that the inflation genie is not yet back in the bottle, so despite all the happy pause talk, the FED, the BOE and the ECB all have a lot more work to do to get to 2%.   If I am correct, these central banks will be forced in the not too distant future into further rate hikes to drag the inflation beast down.  This does not bode well for the economies or the stock markets, the QQQ variety or the DJIA that I show below.  I believe that the stock market has not yet correctly priced in this additional tightening.

 

My outlook is shown in my current EWave count below which is based on a triangle shown in green just completing a "B" wave.  The downward "C" wave I am forecasting to follow should commence very soon.  IF the upper green trend line is broken to the upside, I am probably wrong and my count is crap meaning the upward "B" wave still needs more time to fully develop.  The nice thing about my outlook is that the triangle provides clear "right" - "wrong" boundaries.  

 

YOG7ucc.jpg

 

Regards,

Douglas



#5 pdx5

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Posted 21 May 2023 - 03:34 PM

andr99 is not concerned with inflation. Tennis is not an expensive sport.

And he makes good profits staying bullish and  following Da Cheif.

 

Besides Italian boys are known to stay with mama and avoid marriage.


Edited by pdx5, 21 May 2023 - 03:39 PM.

"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#6 Douglas

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Posted 21 May 2023 - 03:59 PM

pdx5, play nice.  If I could live in Italy, I wouldn't worry that much either.  Italy, at least the Lake Maggiore and Italian Riviera parts that I worked in and visited were a paradise with amazing food, delicious wine, beautiful women and spectacular weather.  Now that  I'm retired, I'm stuck in cold and damp England freezing my hind end off most of the year. 

 

Andr99 is probably right to be bullish since the Fed has his back.  If you're a bear, you're fighting a crazy central bank with infinite ability to print money and pump the markets at will.  Any serious dip in the market or even potential for one like when SVB failed, the Fed jumps right in with billions upon billions of funny money insured or not to bail the bulls out.  Fighting that kind of commitment is very risky.  Remember in the late spring of 2020 the US economy was in total collapse in the middle of a pandemic, but the stock market was rocketing ahead, cause guess who was printing as fast as the press would run.  No economy, no problem, the Fed press can make the magic happen.

 

Regards,

Douglas


Edited by Douglas, 21 May 2023 - 04:05 PM.


#7 andr99

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Posted 22 May 2023 - 01:57 AM

andr99 is not concerned with inflation. Tennis is not an expensive sport.

And he makes good profits staying bullish and  following Da Cheif.

 

Besides Italian boys are known to stay with mama and avoid marriage.

 

Instead I'm staying with myself and enjoying freedom because I leave marriage to those who believe in fables. I was lucky when I was twenty.......a good looking gifted nerd. That was enough to attract girls like bees on honey and I thought they looked at the person. Just a couple of years later I discovered that they were more attracted by the money of millionaires even if they were stupid and not exactly good looking. And given that I follow the experimental scientific method the rules of which were provided by Galileo, I came to the conclusion that the world is based just on money, which is the reason why there are wars and religions talking about poverty as the key to heaven while their only goal is accumulating the more money they can. I came also to the conclusion that FREEDOM IS THE MOST IMPORTANT THING. Still today I think the same......

 

As for inflation, I go with charts and experience, I don't follow anybody, cheif included. Looking at last year's drop on chart, what I can say is that it looks over. Possibly the stock market has already discounted all the effects of bad news about inflation and inflation is expected to cool down......I don't know exactly, but the charts to me say........bullish. And I follow what they tell me. 

 

As for tennis, it's simply phenomenal and I will dedicate more time to it in the future.....            


forever and only a V-E-N-E-T-K-E-N - langbard


#8 andr99

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Posted 22 May 2023 - 02:37 AM

by the way....Northern italian guys, living with parents, which is not my case, usually in the week-end go to sleep when the sun rises because they spend the night in a bed with some married women while their husbands are at home with the sons.

That's why most couples are divorced and you can't imagine how much a divorce costs in this banana-country where I live. 


forever and only a V-E-N-E-T-K-E-N - langbard


#9 Douglas

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Posted 22 May 2023 - 06:06 AM

If I'm right and there is a little selling coming, the green reaction line below might be the first support on the way down.   Action/reaction lines are one of the techniques I use to draw support trend lines where there are no prices.  They don't always work, but they occasionally do, so it's usually worth taking a look at them.

 

YatzW6M.jpg

 

Regards,

Douglas

 

P.S.  After I posted this, I noticed that the green reaction line is little too high, it should be a smidge lower.  I'll correct it when I follow-up if this works or not.


Edited by Douglas, 22 May 2023 - 06:13 AM.