Technical Analysis Of US Market And Stocks March 2019 

Analysis of what is going on in US stock market as well as highlights of some stocks that are forming significant patterns.

March 22 2019 Friday

March 21 2019 Thursday

Sometimes analyzing the stock market can be very difficult as the market does not go up in a straight line!

Anyway, that is where trading strategies come into play. They help you to know when its best to enter or exit a stock. Looking at the general market can help us spot times and areas where it is more conducive to long or short.

In today's analysis I have put in some individual stocks for you to look at.

March 20 2019 Wednesday

Yesterday, the Dow Jones futures formed a topping tail.

Topping tail can be scary at times but one should not quickly come into conclusion that the market may fall whenever a topping tail appears.

What this topping tail may mean is that the bulls are getting tired. And from there we need to continue to observe whether further weaknesses may happen.

If you take a look at the daily chart of Dow Futures above, you will see that a possible double top might happen. As traders we need to be aware of possible chart patterns but until they are valid we should not be too alarmed.

Unless the Dow drops below the recent low where the bottoming tail happened, I do not fear a bigger drop in the Dow that is being started by the double top pattern.

Let us now take a look at the 60 min chart of Dow Jones. Since we saw a topping tail in the daily chart, we of course need to go down to the 60 min chart to spot further weaknesses.

Well, the Dow has indeed broken below a 60 min uptrend line. A sign of weakness. If Dow drops below the low that I have drawn on the chart we can expect more selling in Dow today.

Nasdaq is much more stronger than the Dow.

It is when we look at other indexes we have comfort that even though Dow may form a double top there are pockets of support in the Nasdaq. So unless Nasdaq drops below the daily support area, I do not think that there will be a big crash in the market yet.

The daily chart of the S&P 500 above also tells a story that the S&P 500 has support below. The market is still above the 20 MA and 50 MA and thus we should consider it to be still in a daily uptrend.

It is only when it drops below these MAs will we question about the daily uptrend.

March 19 2019 Tuesday

After breaking out of a 60 min ascending triangle, the Dow futures is chugging higher.

Its a bit slow but slow and steady wins the race.

Currently the Dow futures is still in a 60 min uptrend. Therefore, let's be simple and continue to follow the trend and be bullish.

Take note of the 60 min chart of S&P 500 futures above, it is still in an uptrend. Staying above the 60 min 50 MA.

The boxes are areas of support and should the S&P 500 correct, you will be able to find support there.

Continue to stay bullish on S&P 500 and the Dow.

March 18 2019 Monday

Well, after a smooth ride upwards, the US market is now trading sideways a bit in the 60 min chart. This can be problematic because some stocks may not perform that well in a sideways market.

I really do not know which direction it wants to take in the short term. But since it has been trading sideways for 2 days, it gives us a box area for to analyze whether the bull or the bear will win.

Boxes are very useful to gauge how the market is doing. 

If SPY breaks above the 60 min box, then I believe the market will go higher. On the other hand, if SPY breaks below the box, then I believe the market may get weaker.

March 15 2019 Friday

Updates


If you take a look at the charts below, you will notice that the markets is on the verge of another breakout higher.

The Dow hourly chart above shows us that it is experiencing a volatility contraction. What this means is the price movement in the Dow is getting less whippy.

Volatility contraction often comes before a volatile move.

So the slowing down of whippy action will eventually be followed by a fast move up or down. Some see the pattern above as an ascending triangle.

Ascending triangle can work both ways.

Either it will breakout or if it falls below the trend line, Dow will fall. Usually the pattern will resolve itself in the direction of the previous trend.

The S&P 500 60 min chart shows us that is consolidating sideways.

A sideways consolidation can be considered a box which it can breakout of or breakdown. Its pretty simple. If the market breaks out of the box, it will move higher.

On the other hand if it breaks down lower below the box the current uptrend in the 60 min chart is questioned. And we might have lower prices.

March 14 2019 Thursday

March 13 2019 Wednesday

March 12 2019 Tuesday

March 11 2019 Monday

March 8 2019 Friday

March 7 2019 Thursday

Today let us zoom out a bit into the daily chart and weekly chart of the S&P 500 futures.

As you can see from the chart above, the S&P 500 has been trading above its daily 20 MA ever since it cross back up above it on a big green candle in early 2019.

The rising daily 20 MA is a signal of trend strength but currently it is challenging the daily 20 MA.

If S&P 500 drops below the 20 MA then a deeper correction might happen. I'm not saying the uptrend will end, its just that we have not have a significant correction since January and if S&P 500 drops below the 20 MA, perhaps it might sell off to the next important MA which is the 50 MA.

The weekly chart of the S&P 500 futures show us that the MACD Histogram and Stochastics is giving us some red flags. The MACD mountain has shortened and this warns of slowing bullish momentum.

The stochastics is very overbought and may even curve down to give a sell signal.

All this can be problematic for the S&P 500. So one should be a bit cautious right now as the risk to reward might not be so beneficial to position traders.

The 5 min chart of SPY above shows how choppy trading is this past few days.

If you remembered I mentioned yesterday that if the SPY breaks below the 15 min ascending triangle then more selling will happen. As it broke below the pattern, it was also in the red zone.

This tells us not to long stocks but to be cautious. Traders can also look to short stocks when SPY is in the 5 min red zone.

The SPY is currently at a support area and we will have to see whether the support holds. If SPY breaks below support, then more selling will happen. 

On the other hand, if SPY can break back above into the white zone and above the 5 min box, then it will be conducive once again for intraday longs.

Hope this helps!

Happy trading!

March 6 2019 Wednesday

Well well, yesterday the market traded sideways a bit.

This tells us that the market is indecisive on which direction it should take. But by today I think it will once again be able to decide where it wants to go.

The 15 min chart of SPY above shows us that the S&P 500 did indeed trade sideways. It formed a beautiful 15 min ascending triangle.

This tells us two things:

If the market can break above the highs of the ascending triangle, then it is like to go higher for the day. This of course provides us with a trading opportunity.

Buying the breakout of the ascending triangle and putting a stop loss at the lows of the pattern is a valid trading strategy.

On the other hand, if SPY drops below the lower trend line, there is a possibility that the market will move lower. Ascending triangle patterns can work both ways. It can help us spot a breakout or a breakdown.

Well, the same story is also happening with the DIA. More often than not, when the SPY creates a pattern, the DIA also almost always create the same pattern though in a bit of a variation.

Perhaps the bullish cross in the 15 min chart might give it a slight bullish bias today. So do be on the lookout for a breakout.

Meanwhile the SMH is trading in a whippy fashion in the 60 min chart. But eventually I think it is trying to form a 60 min triangle for it to breakout of.

Breakout or breakdown we do not know. But of course the bias is always to the preceding trend. In the case of SMH, it is upwards breakout. So lets see what happens and act accordingly.

I'll show you some daily charts here. KMI which is in an uptrend formed 2 bottoming tails in the uptrend. This tells us there is selling during the day but the bulls refuse to give up. You can usually buy the breakout of the highs of the 2 bottoming tails.

If it breaks above the highs of the 2 bottoming tails, it is likely to continue moving higher.

INTC is also in a daily uptrend.

It is above its rising 20 MA and 50 MA and this signals to us a healthy daily uptrend. It also formed 2 bottoming tails although I would say semi bottoming tail. If it breaks above the highs of these 2 bottoming tails then it is likely to continue to move higher.

Hope this helps!

Happy trading!

March 5 2019 Tuesday

Its been quite some time since I brought in the 5 min buy/avoid chart. Below is the chart. You can use it to know when to buy or sell intraday.

When the SPY is below in the red zone (below 5 min 50 MA) then it is not conducive to buy. Instead you should avoid buying stocks and you can consider shorting the market or stocks.

Yesterday, the market drop into the red zone after about 11am. Then it was all the way bearish till late in the trading day. Right now it is in the white zone so once again you can consider to long stocks.

Sometimes its important to have a filter to know when to long stocks and when to short stocks, I have found that the red zone/ white zone can be very useful to help traders be on the right side of the market during the trading day.

The above is the 15 min chart of SPY. It is making a 15 min cup with handle pattern. If the market can break higher above the handle then the entire market is likely to move higher.

On the other hand, if the market breaks below the handle, it is very likely more selling will continue.

Yesterday, the stock market formed a bottoming tail in SPY.

This is a result of heaving selling and then the market closing back up far from the bottom. While this is not a green color bottoming tail that has the market close higher near the open, nevertheless, it is useful to show us what the market will do.

If the market can trade above the highs of the bottoming tail, then it is likely to move higher. Do be careful if the market trades below the low of the bottoming tail as more selling will happen.

March 4 2019 Monday

In a way, the US market has just started a new uptrend in the 60 min chart. The Nasdaq and S&P 500 futures are stronger than the Dow Jones.

The above is the 60 min chart of Nasdaq 100 futures. It broke out of a 60 min downtrend line and was able to go higher. Right now, the index is in a 60 min uptrend.

The index is trading above its rising 60 min 20 MA and 50 MA. Usually this is a sign of strength. The box I have drawn shows a consolidation for the index. If Nasdaq can trade above this box then it is likely to break higher. On the other hand some caution is needed if the index drops below the box.

Boxes in 60 min charts are very useful to gauge the short term strength of indexes. An index that is in a strong short term uptrend will break above many 60 min boxes with its 60 min 20 MA and 50 MA rising nicely.

That is what we want to see in the Nasdaq 100 as well as the S&P 500 and Dow futures.

The chart above shows the 60 min chart of the S&P 500 futures. The index clearly found support at its rising 60 min 200 MA. It broke out of a box as a 60 min bullish cross happened and is now trading at its previous swing high that is acting as a support.

If the S&P 500 futures can break above the 60 min box I have drawn, then it is also likely to shoot higher along with the Nasdaq futures.

The Dow futures actually broke out very nicely of a 60 min dowtrend line. But it immediately collapsed and the next day gap up higher. This is very choppy trading and can be nerve wrecking compared to the S&P 500 and Nasdaq.

Sometimes one index can act quite nasty compared to the other. But eventually if the S&P 500 and Nasdaq chugs higher, the Dow will also move higher.

Take note of the rising 60 min 200 MA (in yellow). Well, if Dow can stay above this rising 60 min 200 MA and also stay above the uptrend line that I have drawn, then it is likely to move higher as well.

On the other hand, if it starts to drop below the 200 MA and the uptrend line, it could signal more weakness and choppy trading.

I think the daily uptrend is still intact and there is no weaknesses in it yet. But the short term movements can be choppy.

The chart above is the daily chart of SPY which is the ETF for the S&P 500.

Notice how the SPY is now above the daily 20 MA, 50 MA and 200 MA. The 20 MA (red) is slanting upwards and this tells us that the daily uptrend is strong and intact and alive.

As long as the SPY stays above the rising daily 20 MA, stay bullish!

Yesterday or actually last Friday, SPY formed a small bottoming tail. I think its a bit difficult to see it in this chart but if you zoom in on your own chart, you will see the SPY had a bottoming tail. This tells us it rejected to go lower.

Therefore, if the market stays above the bottoming tail then it is very likely to continue to move higher.

March 1 2019 Friday

Charts with the Freestockcharts.com label are courtesy of Freestockcharts.com

Charts with the investing.com logo are courtesy of Investing.com powered by Trading View

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