Here are some stock market analysis for 20th to 25th November 2017, I will try and comment on the market everyday. I believe the US stock market is still in consolidation mode after a big run up recently. So, the normal zig zag ups and downs in the lower time frame is normal. As long as the Dow Jones Industrial stays above 23200 area then we are still looking at a bullish consolidation which hopefully will enable it to break higher in the future.
*p.s. I will try to update this page everyday as the market develops from 20th to 25th November, Mon - Fri each day before the market opens. So come back to this page and press the refresh button to see the latest analysis on top. By the way, because its written in a hurry my typos might be many. I don't check the spelling because its not those regular articles I write.
Gooday everyone, hope you had a great Thanksgiving holiday! There is a lot to be thankful for this year. I know the bulls will be very thankful for the wonderful uptrend that the major indices experienced. Today the US market will be open, but it will be closing early at 1pm E.T. So, its a half day.
Black Friday it is as most people will be rushing to get Christmas presents cheaper. Reports have said that online sales and consumer spending this season will increase from last year. This is something good as consumer spending accounts for 2/3 of the US economy. Next Monday will be cyber Monday and no doubt people will continue the bargain hunting and spending spree to get things for themselves and their loved ones.
Well, the S&P 500 futures 60 min charts tells us that it is still very healthy. If you look at the chart above, you will notice that the S&P 500 managed to stay above the previous highs. It is also still above the uptrendline that I draw. So any sideways movement that is within this range is nothing more than a rest.
As long as the S&P 500 stays above this support area and stay above the uptrendline I don't think there will be much correction in the index. We could even look forward to it breaking above 2600.
Dow Jones Industrial Average even made a new all time highs. We were looking at an ascending triangle pattern but the false breakout and the quick red bars that develop pointed to a pattern failure. Patterns don't work all the time and as some experienced traders know, they can be good shorting opportunities in the smaller time frames.
Dow broke a 60 min uptrend line and proceeded to correct from there but it is still staying above the support area. Perhaps it is forming a mini reverse head and shoulders. I'm not too sure if the pattern is even forming but I've drawn a horizontal line. Coupled with the fact that the S&P 500 and Nasdaq is trading sideways, as long as Dow stays above the horizontal line I think it could rally higher from there and make another round of fresh record highs.
Moving on to the Nasdaq futures, one glance is enough to tell us that this index is much more stronger than the Dow or S&P 500. With tech being stronger and leading the market, this is a very good sign for the markets. Currently it is consolidating and taking a rest.
As we all know, indices can correct by dropping or consolidating and I think Nasdaq has chosen the better way by consolidating. So let's see if it can break higher above the consolidation.
A Happy Thanksgiving to all of you fellow readers and traders. Most of you will have a long weekend, so Happy Thanksgiving and happy holidays.
We really really had a big run up in the major indices and they are all making new all time highs. Well as they say, don't be bearish till the trend changes. And true to the maxim of "The Trend Is Your Friend", the stock market continues the bullish trend up and surprises many people. Even with Donald Trump and the the fears of war with North Korea. News are just news but ultimately if the world economy is good, then the stock market will continue to trend up.
The 60 min chart of Nasdaq 100 shows that it had a nice run up and is consolidating right now. I think what we want to do is to see if the Nasdaq 100 can break above the consolidation box and have a breakout higher. There is ample support below at 6360 area so even if there is a correction, we may find support there.
The Dow Jones met the measured move target that we set. It broke out of a flag pattern and proceeded to have a nice bull run up. Usually after a run up, there will be some correction. But stocks and index can correct two ways. Either by the price dropping or by consolidation.
It seems that the Dow is taking the second route by consolidating sideways and possibly forming a 60 min ascending triangle. Let us monitor if Dow can break out of the triangle or not.
What a day it has been yesterday with the major indices going higher and making all time highs. One of the big contributors to the positive sentiment is Apple which rose as it meet its rising 20 MA. I'm a big believer in the 20 MA and often look for stocks that are declining to its rising 20 MA.
Apple was one of them and if you have time to look at its 60 min chart you will realize that it also broke a 60 min downtrendline which help to propel it higher.
The chart above is a multiple time frame analysis of Apple. Many traders like to put multiple time frames so they can see what is happening in all time frames for the stock. I just put two side by side since I trade only with a laptop but that is all that I need. The left smaller frame is the daily chart of Apple.
As you can see the stock was declining to its rising 20 MA. Even on the daily chart I was able to draw a downtrendline. You will be able to see it clearer if you look at the 60 min timeframe of Apple yourself.
The right chart is the 5 min chart of Apple. Apple gap up on heavy volume and started to make a nice large bullish candle. This setup a bull gap up large candle setup. Basically you just buy the stock as it trades above the highs of the 5 min bullish candle and then you put a stop loss at the lows of the bullish candle.
You do this to stocks that look good on the daily chart. In our case, Apple was meeting its rising 20 MA, so the 5 min chart pattern setup is very good.
Yesterday we saw how the Dow Jones hit the support area which is the reverse head and shoulders pattern is located. The Dow started making dojis and bottoming tail and then it reverse higher and went back above the 20 MA to give us a nice bounce up.
Naturally as the Dow rallied and hit the resistance area, it drifted down because of the resistance. The drifting down help Dow to form a flag pattern which this morning it broke out of and send Dow and the other indexes higher. I've drawn a measured move across the pattern and if you look at it you will realize that the measured move is just where the previous highs is. So there are a few things that might happen as Dow hits the previous high.
It may hit it and then reverse back down but I have a feeling that it might consolidate around there. And if there is a consolidation there, then we hope that Dow will be able to breakout from there into another round of new all time highs.
All the volatility in the 60 min charts area opportunities to buy stocks on dips for short term trading. When the major trend is up, it makes sense to buy on the dips because the odds of Dow going higher and finding support at the dips is very high.
Let's take a look at the Nasdaq 60 min chart of its futures. We drew a box over the recent consolidation highs and it was unable to break higher. It broke down below the box and form a correction. Just a small correction as there is support below. As the price action develop, it formed a 60 min cup with handle pattern.
While the Dow broke out of a 60 min flag, the Nasdaq 100 futures broke above the handle of the cup and shot higher. Currently it is at the congestion area and what I would like to see is for it to consolidate a bit and then move higher.
By the way, I just want to show you how Apple is meeting its rising 20 MA. This is important when you can see that it might also be breaking a 60 min downtrendline as it hits the daily 20 MA. If it breaks above the 60 min downtrendline, it might send Apple higher.
A bullish Apple will also be good for the general market and hopefully that will help to send the 3 major indices higher as well.
I must agree that the US stock market is performing really well under President Donald Trump. Despite all the negative news, I am still bullish on the markets because it is still in a nice uptrend. The trend is your friend and so far there is no change in trend.
The chart above which is the daily chart of the Dow Jones Industrial Average points out to us that the uptrend is still intact. Notice how the Dow keeps on making higher highs and higher lows. I like to use the moving averages 20 period and 50 period to gauge the health of the US market.
Most of the time, the Dow has been trending above the rising 20 day moving average and the 50 day moving average. For a long term picture, the Dow has been trending above the rising 200 day moving average as well. Recently it has gone below the 20 MA showing at the most a period of sideways movement.
I still look at the 23200 area as a short term support area. As long as Dow stays above this box area which I have drawn on the chart, I think it is consolidating nicely. Perhaps it might meet the 50 MA as it consolidates and break out higher. If the 23200 cannot hold and Dow corrects, we look at the 50 MA as an area of support.
The Dow Jones has shown a tendency to stop dropping at the rising 50 MA for many times. So we can continue to expect it to find support at the rising 50 MA.
The 60 min chart of the Dow Jones futures show that it is quite weak in this time frame. Currently it is trying to form a doji as it hits the support area that is formed by the reverse head and shoulders last week. If the support area cannot hold, I look for more weakness in the Dow Jones.
For it to find support and move back up, I would like to see it trade back above the 60 min 20 MA. Last week's rally had been superb but it also failed immediately. The bottoming pattern of the reverse head and shoulders pattern and the breaking of the downtrendline help to send the Dow Jones higher until a topping tail appeared which send it lower.
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