Tag: trading range

Are Stocks Stuck in a Trading Range til February?

Posted on by The INO.com Team

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.

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Stocks are likely going to be stuck in a trading range until the next Fed announcement on Wednesday February 1st.

Why?

Because investors have been burned many times before getting bullish in hopes of a Fed pivot that did not arrive.

So even with signs of moderating inflation providing a modest lift to stocks of late…there is a limit to the upside until investors hear from the Fed again. There is also limit to the downside. And this begets a trading range.

Let’s discuss the shape of the trading range and possible outcomes after the Fed announcement. All that and more is on tap for this week’s Reitmeister Total Return commentary.

Market Commentary

In many ways the trading range has already been in place for the past month flitting between 3,800 and 4,000 for the S&P 500.

And this is likely to stay in place as investors are fearful of reading the Fed tea leaves wrong as they have so many times this year. So even though there were welcome signs of moderating wage inflation (public enemy #1 to the Fed) there are enough whispers from the Fed that their job is far from done.

One such whisper from the Fed recently came from Atlanta Fed President, Ralph Bostic. During his speech he shared that interest rates will get above 5% and hold there for a while. He was then asked for how long would they remain elevated above 5% for which he stated emphatically. “three words: a long time”.

This harkens back to December 14th when the market was on the verge of a breakout above the 200 day moving average before Powell slammed the door on that notion. He too repeated the 3 word mantra (a long time) over and over again when discussing their plans for higher rates. Continue reading "Are Stocks Stuck in a Trading Range til February?" →

Is Wal-Mart in trouble?

Posted on by The INO.com Team

Wal-Mart Stores Inc. (NYSE:WMT) is the largest retailer in the world, and if they are have problems, then we really have to examine and be concerned about what is really happening to the economy.

Yesterday, it was reported that Wal-Mart stores were cutting back on U.S. orders amid an inventory backlog. It was later denied by David Tovar a spokesperson for Wal-Mart. However, true or false it managed to push the stock of Wal-Mart down over 2% on the day.

That is a fundamental viewpoint. What is interesting technically about Wal-Mart is the fact that it recently broke below a 25 month trend line.Trend lines are enormously important for determining the momentum and trends of stocks, commodities, and any number of items that can be charted. In order to be a valid trend line, it must touch three points along the line to be truly meaningful. The longer the time frame, the more meaningful and powerful the trend line becomes. A two year trend line like Wal-Mart recently broke thru to the downside is significant and should not be ignored.

Continue reading "Is Wal-Mart in trouble?" →

Get ready for the Veg-O-Matic Markets

Posted on by The INO.com Team

First Posted  almost 2 years ago and still relevant

September 29, 2009 by Adam

“This is Veg-O-Matic, the world-famous food appliance! . . . the only appliance in the world that slices whole, firm tomatoes in one stroke, with every seed in place. . . . French fries? Make hundreds in one minute! . . . Isn’t that amazing?!”

Let’s face it, the really big money is made in the big trending markets. What happens after a big trend comes to an end? Well, that is when you enter into a period of uncertainty.

Some traders like to characterize this as a trading range. I would refer to it as a Veg-O-Matic market, as it cuts and slices most traders to pieces.

No matter what you call it, trading range or Veg-O-Matic market, it is important to remember that you remain patient and wait for another defined trend to begin.

So how do you tell if a market is in a trading range?

The easiest way is to use MarketClub’s Trade Triangle technology. When you see a Chart Analysis Score of around 55-65 on the chart, it indicates that there is no discernible trend present. Trading range markets, or Veg-O-Matic markets, are best left to the professionals.

If you do feel the urge to trade in a market like I described above, you are better off using some sort of oscillator like the Williams %R indicator or a fast stochastic indicator. These indicators allow nimble traders to catch the swings, up and down. For the average trader, this is a time to be on the sidelines and looking at other opportunities in other markets.

Make no mistake about it, trading range markets are generally difficult to trade and generally do not give up profits easily.

So remember, if it’s a big Veg-O-Matic market, you’re better off waiting on the sidelines until you see a clear trend develop.

All the best,

Adam Hewison
President, INO.com
Co-creator of MarketClub.com

P.S. Samuel J. Popeil invented the Veg-O-Matic. He also created the frenzied ads that made his product a late-night television sensation in the late 1960s and 1970s.

Why Today's Market Action is Important

Posted on by The INO.com Team

No question about it, today's market action caught many people by surprise, but it's important to understand what happened and why it happened from a technical standpoint.

As many of you who have been following my videos already know, MarketClub's “Trade Triangle” technology has been neutral on the indexes since January 20. We have also been bearish on gold since the 22nd of January. So what is happening to the markets?

The recovery in the indexes from March of '09 was basically just that, a recovery. Our Fibonacci retracement indicator was spot-on and points to a potentially more negative down move in the future. All of the indices managed to recover back over 50% of the gains before this recent downturn.

Today, I want to share some significant levels to look for during the balance of February. If these levels are broken and taken out, it would indicate a much more serious problem for the equity markets.

Here are the levels on the indices: S&P 500 key level to watch 1,029.38, NASDAQ key level to watch 2,024.27, and Dow Jones at 9,678.95.

In the case of spot gold, the key level to watch this month is 1,044.20. If the gold market goes below that level, it will signify further retrenchment for this precious metal.

Make no mistake about it, today's action is not positive for the equity markets. However, providing the levels we mentioned above hold, then you could say we're in a broad trading range and we expect the lows to be tested. I, for one, am cynical that this is going to happen.

You may also want to take a look at my recent gold and crude oil videos. Cyclically these markets are right on target and acting the way we expected them to act.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

Get ready for the Veg-O-Matic Markets

Posted on by The INO.com Team

"This is Veg-O-Matic, the world-famous food appliance! . . . the only appliance in the world that slices whole, firm tomatoes in one stroke, with every seed in place. . . . French fries? Make hundreds in one minute! . . . Isn't that amazing?!"

Let's face it, the really big money is made in the big trending markets. What happens after a big trend comes to an end? Well, that is when you enter into a period of uncertainty.
Continue reading "Get ready for the Veg-O-Matic Markets" →