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March 23, 2020

Put Option Traders Take Your Pick

Is Now the Time to Buy FAANG Stocks?

Don’t ask if the FAANG stocks, including Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG), are a buy now. This subgroup had all been leading beneficiaries of the bull market in stocks. The risk-off conditions from January 18, 2018, did not affect this favored grouping; they continued to make significant gains and made up a large percentage of the return in the averages. 

However, today they will play catch up as the need for cash increases, and the flow of investments shifts to new leadership for the new decade. 

AMZN made its all-time high on panic buying, a common occurrence this year for the averages worldwide and many of the sectors and leading shares.  But AMZN is on the verge of a high rate of change decline. The Technical Event Model is set up for the top to low range to expand in April to over 600 points from open to close of the month.

A fall below 1795 would be the first sign of the downtrend kicking off.

Facebook, is boucing off S-T support as seen in the right hand window below. A recover to the low side of I-T new resisatcen at 167 is within reason. I have highlighted the area in red where the market should find push back.

The backgriund of range expansion that begain in MArch – signaled by TEM’s rule #4 signal, calls for more of the same. Hence the 60 point high to low range that hit in March should be exceeded in April. A situation that calls for target if 90 or lower. the middle window has the L-T support zone shwoing a range from 97 to 126. I feel it is resonable for L-T support zones to be broken when new long term downtrends begin.

S-T a bounce today and Tuesday is withing the sennario buy getting above 167 and staying there is not the expecation. Traders – as always – look for success of failure if the makret can get back above that price. S-T support runs from 145 to 154, if a recover above 167 does not occur providing you with a failure short entry with a fall abck below 167, this weeks S-T support zone would be used for enttry triggers.

Googles run to new highs was post triangle, which is a terminal move, and the breakout measured by TEM called it weak and feeble. From the peak, the decline in the weekly bar has been un-interrupted. Short and hold positions would have seen very little underwater.  The I-T support zone is broken, refer to the middle window for the weekly line chart. The low end of I-T support is now new resistance at 1167.00. What is critical here for the Google market is the volatility background to go back into panic mode, after its peaking on emotional buying. That type of flip was seen at the late January peak of the Dow in 2018 

On a Short term basis, along with our Near-Term outlook for the averages, more trading range may precede the massive duty decline.  The Long Term support zone – not shown – starts at 1,000 and ends at 875.  Option traders have a look at Market Map for the scenario that is likely going into May.

A break below 1044 should set the stock on its way.

Netflix has many of the same bearish background setups as the other FAANG stocks. But what stands out to me is the triple top on the monthly chart and how TMT’s overbought-oversold model is so blatantly out of gear. A precise longer-term sell signal. The monthly chart shows the L-T support zone at 200 to 243, a price range that is equivalent to a 38% retracement of the bull market to date and a friendly target for a put trade.

NFLX has moved back into its I-T support zone, a key point of interest for traders. If it can hold and move above 345, the market may be able to grab victory from the jaws of defeat. On the other hand, a break back below 321 would be a bearish omen pointing to S-T support this week at 305 down to 284. Once the trend is intact, the target is 100 points lower from here.

https://contrarythinker.com/early-spring-subscription-discount/

 

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2018

Contrary Thinker  1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820 or  25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its clients trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice.  My indicators and strategies can be withdrawn for private use without notice, at any time.

— Contrary Thinker does not refund policy all sales are the finale.

–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

December 18, 2019

“Extreme Greed” Trigger’d – Short-Squeeze Lifts Stocks To New Record Highs

 

In the Volatility Report 12.11.2019, I pointed out that the USD was looking bearish – at least for the Intermediate-Term. ” The Hot Money for the last few years has been in the buck. From the 2011 low, a new very long term-bull market is kicked-off. That, however, does not preclude an I-T correction back to test the low of early 2018.”   I also tie a weaker dollar to a leading suggestion that stocks are going into a bear market. 

This news was coincidental at the secondary top highlighted in the chart used here. “Powell says the Fed is ‘strongly committed’ to 2% inflation goal, a sign that rates are likely to hold steady.”

“Fed Chairman Jerome Powell says the central bank is “strongly committed” to maintaining 2% inflation. The remarks are further indication that the central bank is unlikely to raise rates anytime soon. Powell also draws attention to low labor force participation and middling wage gains.”

https://www.cnbc.com/2019/11/25/powell-says-the-fed-is-strongly-committed-to-meeting-its-inflation-goal.html

“The only way is up…” China continued to surge after the ‘deal… Source: Bloomberg Mixed picture in Europe today with the FTSE tumbling along with DAX as Italy managed gains… Source: Bloomberg US markets were broadly higher led by Small Caps… Since “Phase One” of the US-China deal was supposedly complete on Oct 11th, can you spot the odd one out? Source: Bloomberg All of which began when The […]

\US President Donald Trump’s top economic adviser Larry Kudlow told reporters that US exports to China will double under the agreement and that he expects a 0.5 per cent boost to US economic growth in 2020 from the new and updated trade deals signed by the administration.

Click here to view original web page at Wall St and global share markets climb on US-China trade deal progress

 

\The U.S. has not had legitimate market in 12 years. What we call “the market” is a crude simulation that obscures the Federal Reserve’s Socialism for the Super-Wealthy: the vast majority of the income-producing assets are owned by the super-wealthy, and so all the Fed money-printing that’s been needed to inflate asset bubbles to new extremes only serves to further enrich the already-super-wealthy.

 

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There’s more: add in the incremental liquidity from the expanded overnight repo of about $50 billion and another $60 billion in T-Bill purchases, and the Fed will inject a total of just shy of $500 billion in the next 30 days. This also means that by Jan 14, the Fed’s balance sheet would have grown by a cumulative $365BN in “temporary” repos, and together with the expanded overnight repos, and the $60BN in monthly TBill purchases, and by mid-January, the Fed’s balance sheet, currently at $4.066 trillion, will surpass its all time high of $4.5 trillion!

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Something strange is going on: at the same time that central banks are injecting $100 billion each month in electronic money to crush volatility and ramp markets, a similar amount in hard physical currency and precious metals is literally disappearing.

Take gold: as we reported last week, it was none other than Goldman Sachs which recently laid out the case for gold, saying “gold’s strategic case still strong.” One reason for this is that the same central banks that are “full tilt” printing cash, they have also been splurging on gold, and as a result of “geopolitical uncertainty” there has been a record surge in gold demand by central banks themselves. As Goldman notes, “CBs globally have been buying gold at a very strong pace” and “2019 looks to be a record year for CB gold purchases with our target of 750 tonnes combined purchases likely to be met.”

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker Since 1989,

Copyright 1989-2020

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its clients trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice.  My indicators and strategies can be withdrawn for private use without notice, at any time.

— Contrary Thinker does not refund policy. All sales are the finale.

Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

NO WARRANTY / NO REFUND. Contrary Thinker   MAKES NO WARRANTIES, EXPRESS OR IMPLIED, On ITS PRODUCTS AND At this moment EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL CBI BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THE PERFORMANCE OR USE OF ANY PORTION OF ITS PRODUCTS.

 

May 7, 2019

Wall St. analysts believe the retail sector can withstand US-China trade war issues

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