For this recent rally over the last few weeks, IWM has set higher prices, but today we saw an interesting divergence. The Slow STO did not set a new high, but price did. I'm no EW guy, but I think that means “wave 5” (i.e. last of the upthrust) is upon us. Anyway, I'm not hung up on that.
The November fractal makes a possible reappearance. If so, we saw the high of the week today. New highs over the next few days takes it off the table. One thing is different: In Nov. the bollinger bands were headed “down”, while today they are headed “up”. I think this was due to the notion that a weaker dollar is better for DOW, and a stronger dollar is better for $RUT.
Why did I choose IWM instead of $RUT? (go on, ask me). Okay, here's why: Intra-day price squiggles seem keyed off of IWM instead of $RUT. For example, the closing price on Thursday was right on IWM's 50 day MA (where as on $RUT it was well above). This was a bear trap — people who analyzed $RUT based on just IWM might think “it barely closed above 50 day support that's so bearish!” whereas $RUT was clearly above the 50. Always good to check both to look for fake moves.
What if…?
What if $RUT is going to set a new 52 week high? We are less than 2% away, maybe 1% and some change. What will that do to bearish sentiment? Bears will (reasonably) wonder if maybe they jumped the gun on shorting. Quants and HFTs will try to pump the other indexes to new highs. What if $RUT makes a new high but others do not confirm? I don't know what that means but that's why I've stayed on the sidelines. Take a few minutes and adjust your trading plan accordingly.
TNA: possible sell from last Friday is not confirmed. TNA is a hold for tomorrow. (I figured this much)
TZA: todays candlestick is a (wait for it, wait for it) Black Opening Marubozu !
Frankly, I think they made this one up. None the less, they claim the possible buy from last Friday is not a dead issue.
They claim tomorrow could see either a continuation (more down side for TZA) or a reversal (up side for TZA). A white candle for TZA tomorrow would be a buy signal.
The divergence you are referring to might be a sign that TNA is in the last wave of this move up. If it continues to play out, the divergences will get pretty apparent.
Looking at $RUT, I see either 3 waves up (this would be the 3rd) or 5 waves up (this would be 5). It would make sense if this is the 5th wave and apparent divergences show up. I'm not an EW guy by any means, though.
I also expect TNA to go up. Watch closely to see if IWM/$RUT respect the upper BB (they should). I think there will be a tradeable move coming soon.
Today was day one of the Full Moon Trade, which favors TNA. After one day, this trade is up 5.3%. (Not up 6.3% as the buy was not at the closing price.)
Volume today for TNA was a bit higher than normal for these past 11 days.
$RVX (VIX for $RUT) closed 2.8% lower, favoring TNA.
TNA has been up 12 of the past 14 days.
Ultimate Oscillator for TNA peaked at 78 six trading days ago and has generally fallen since then but has remained above 50 and is currently 68. Indicating continued strength for TNA.
However, TNA today closed 5% higher than that day with the peak Ultimate Oscillator value. A higher close with a lower Ultimate Oscillator value might be seen as negative divergence indicating that TNA is due to fall.
Bollinger Bands for $RVX (VIX for $RUT): today’s red candle moved closed to the lower Bollinger band, but that lower band dropped today, indicating that $RVX could continue to drop tomorrow, favorable for TNA.
Bollinger Bands for $RUT: $RUT rose to near the upper Bollinger Band, but that upper band rose today, indicating that $RUT could rise again tomorrow, favoring TNA.
http://www.americanbulls.com had TNA as a BUY on Feb 9th, and a possible sell today if TNA had dropped. With the big gain in TNA today, TNA remains a hold for tomorrow.
Overall, it looks like TNA broke out above an area of congestion and is likely to continue rising tomorrow.
This tip off will be filtered out and ignored by the bears.
Nice chart, Dreadwin
Gotta love those Japanese candlestick names. Or not.
Chart of IWM:
http://www.screencast.com/users/dreadwin/folder…
For this recent rally over the last few weeks, IWM has set higher prices, but today we saw an interesting divergence. The Slow STO did not set a new high, but price did. I'm no EW guy, but I think that means “wave 5” (i.e. last of the upthrust) is upon us. Anyway, I'm not hung up on that.
The November fractal makes a possible reappearance. If so, we saw the high of the week today. New highs over the next few days takes it off the table. One thing is different: In Nov. the bollinger bands were headed “down”, while today they are headed “up”. I think this was due to the notion that a weaker dollar is better for DOW, and a stronger dollar is better for $RUT.
Why did I choose IWM instead of $RUT? (go on, ask me). Okay, here's why: Intra-day price squiggles seem keyed off of IWM instead of $RUT. For example, the closing price on Thursday was right on IWM's 50 day MA (where as on $RUT it was well above). This was a bear trap — people who analyzed $RUT based on just IWM might think “it barely closed above 50 day support that's so bearish!” whereas $RUT was clearly above the 50. Always good to check both to look for fake moves.
What if…?
What if $RUT is going to set a new 52 week high? We are less than 2% away, maybe 1% and some change. What will that do to bearish sentiment? Bears will (reasonably) wonder if maybe they jumped the gun on shorting. Quants and HFTs will try to pump the other indexes to new highs. What if $RUT makes a new high but others do not confirm? I don't know what that means but that's why I've stayed on the sidelines. Take a few minutes and adjust your trading plan accordingly.
http://www.americanbulls.com reports for today:
TNA: possible sell from last Friday is not confirmed. TNA is a hold for tomorrow. (I figured this much)
TZA: todays candlestick is a (wait for it, wait for it) Black Opening Marubozu !
Frankly, I think they made this one up. None the less, they claim the possible buy from last Friday is not a dead issue.
They claim tomorrow could see either a continuation (more down side for TZA) or a reversal (up side for TZA). A white candle for TZA tomorrow would be a buy signal.
Yes. We just need to see it hit the bollinger bands.
The tradeable move you are referring to would be in TZA?
Nice Post Earl.
The divergence you are referring to might be a sign that TNA is in the last wave of this move up. If it continues to play out, the divergences will get pretty apparent.
Looking at $RUT, I see either 3 waves up (this would be the 3rd) or 5 waves up (this would be 5). It would make sense if this is the 5th wave and apparent divergences show up. I'm not an EW guy by any means, though.
I also expect TNA to go up. Watch closely to see if IWM/$RUT respect the upper BB (they should). I think there will be a tradeable move coming soon.
TNA gapped up and closed up 6.3%.
Today was day one of the Full Moon Trade, which favors TNA.
After one day, this trade is up 5.3%. (Not up 6.3% as the buy was not at the closing price.)
Volume today for TNA was a bit higher than normal for these past 11 days.
$RVX (VIX for $RUT) closed 2.8% lower, favoring TNA.
TNA has been up 12 of the past 14 days.
Ultimate Oscillator for TNA peaked at 78 six trading days ago and has generally fallen since then but has remained above 50 and is currently 68. Indicating continued strength for TNA.
However, TNA today closed 5% higher than that day with the peak Ultimate Oscillator value. A higher close with a lower Ultimate Oscillator value might be seen as negative divergence indicating that TNA is due to fall.
Bollinger Bands for $RVX (VIX for $RUT): today’s red candle moved closed to the lower Bollinger band, but that lower band dropped today, indicating that $RVX could continue to drop tomorrow, favorable for TNA.
Bollinger Bands for $RUT: $RUT rose to near the upper Bollinger Band, but that upper band rose today, indicating that $RUT could rise again tomorrow, favoring TNA.
http://www.americanbulls.com had TNA as a BUY on Feb 9th, and a possible sell today if TNA had dropped. With the big gain in TNA today, TNA remains a hold for tomorrow.
Overall, it looks like TNA broke out above an area of congestion and is likely to continue rising tomorrow.