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Sunday Update Week of January 14th – January 2016 Deja Vu?

A prepared trader is a generally a profitable trader, and Sunday is a great day to get ready for the week ahead by studying up from last week’s price action.  In this weekend’s analysis, we take a look at the broad markets continued strong move up this week and compare the recent lower indicator action with the early 2016 moves which aren’t exactly the same but are showing many similarities.

SPY: Weekly Candle

Written Analysis:

  1.  The recent three-week rally has moved up almost perfectly to the previous channel support now acting as a hard level of resistance above. A strong move off the 200-week simple moving average occurred as well. This mimics the January 2016 move very closely.  One thing to note here is the lack of volume with the uptrend which may suggest it could be short-lived. However, this same low volume “melt-up” occurred in Q1 of 2016.
  2. The Vortex Indicator is showing a wide divergence between the VI – and VI+ which is strikingly similar to the move in early 2016.
  3. The MACD has taken a beating since October and the MACD has yet to see a bullish cross since. However, there are signs of a reversal as the MACD histogram is starting to reverse which is just a function of the fast (blue) moving towards the slow (yellow).
  4.  The Williams % Range has not been this oversold since January 2016 but has quickly moved out of this area and could continue to the upside as there is plenty of room left before any type of overbought conditions on this particular time frame (lower inputs on this timeframe will obviously show higher levels which could be signaling a potential reversal if this proves to just be a dead-cat bounce).

QQQ: Weekly Candle

Written Analysis:

  1. The price of QQQ bounced perfectly off the channel support trendline going back to 2016 with a hard move up to potentially test the 50-week exponential moving average. An alert is set on this moving average which will automatically send an email or mobile alert when the price enters into this purple area. Volume continued to decrease last week as price melted up higher.
  2. The vortex indicator is looking very similar to the SPY setup with a wide space between the VI- and VI+ showing divergence. When the red line (VI-) starts to converge towards the blue line (VI+), this has confirmed further moves up such as in 2016.
  3. The MACD has been crushed over the last four months with the histogram showing signs of short-term momentum to the upside. A bullish cross would potentially make this a more convincing move but could easily just be a huge bull trap as many bearish variables are still at play both nationally and globally such as the shutdown and trade wars. Europe has started seeing a slowdown in production as well.
  4. The last time the Williams % Range was this oversold was in 2016 as the market was finding a long-term bottom. As the %R starts to move out of oversold levels, a breakout could occur with a move to the upside through -50.

XBI: Weekly Candle

Written Analysis:

  1. XBI has seen the largest moves up out of the three ETF’s analyzed this weekend. This has been the leading mover in the broad markets as this led the market to the downside in October, showed the temporary bottom in the markets on Christmas eve before the SPY or QQQ showed signs of a reversal, and now leads the markets to the upside. The 50-week exponential moving average is the area to watch above next week. We have set an alert on this line to let us know exactly when price action gets within this area.
  2. The Vortex Indicator looks idential to how it did back in early 2016 with the VI- starting to converge towards the VI+.
  3.  The MACD is violently moving upwards shown by the decrease in the histogram which is a function of the sharp move in the blue line (MACD, fast) towards the yellow line (Signal, slow). An upside cross would confirm momentum is continuing in the bulls favor.
  4. The Williams % Range is breaking out to new highs after this recent move up and down out of oversold conditions. However, as seen in early 2016, these steep moves up and also have steep moves down as well.

Related Blog Posts

  1. Alerts – Add alerts to your trendlines and indicators with sensitivity.
  2. Multi-time frame analysis (MTFA) – Overlay your chart a secondary timeframe with on trendlines, indicators, and Fibonacci levels.
  3. Trendline Preferences – Customize your trendlines to automate a consistent trendline drawing strategy.
  4. Add Watchlist – Create your own watchlist and quickly move through charts with automatic analysis on each!
  5. Automatic Candlestick Recognition – Automatically input your favorite candlestick patterns into the system and have TrendSpider find all the ones on your current chart!

GE: Before vs. After

This weekend’s “Before and After” shows GE breaking through the price channel (shown by the two green lines) with an alert set on the wedge resistance above. The after picture shows the price hitting this alert area on the resistance trendline being rejected hard at this area. The price did eventually continue up as demand increased to break through this technical area.

Before

After

Mobile Alert Sent

 


Timestamps Captured This Week

GE

AGEN

AMZN


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REMEMBER: These are charts that have interesting technical setups based on automated technical indicator analysis included. Charts and analysis provided for educational reasons only. TRENDSPIDER IS A CHART ANALYSIS PLATFORM. IT IS NOT INTENDED TO BE TRADING OR INVESTING ADVICE. ALWAYS DO YOUR OWN DUE DILIGENCE USING MULTIPLE SOURCES OF INFORMATION AND/OR SEEK THE ADVICE OF A LICENSED PROFESSIONAL BEFORE TRADING OR INVESTING. Please read our full risk disclaimer on our website by clicking here.