Broad Market Analysis – June 22, 2018

Hi, this is A.J. Brown with Trading Trainer on the evening of Friday, June 22, with your Trading Trainer weekend edition of your Daily Insights. What we’re going to do here is take a look at the broad market by taking a look at representative indexes of our watch list, namely the Dow Jones Industrial Average, the NASDAQ Composite Index, and the S&P 500 Index. We are also going to take a look at the New York Stock Exchange Composite Index and the VIX Volatility Index. And because it is the weekend, we’re going to take a look at both daily and weekly charts. But before looking at any charts, we’re actually going to log in to the Trading Trainer “Learning Community” web portal by going to login.tradingtrainer.com. Of course, once we’ve logged into the “Learning Community” web portal, I’m going to direct you right to today’s Daily Insights tab and further to the Recommendation sub-tab.

Take a look at the recommendations we have for Monday, June 25’s trading session. Slight changes in these recommendations could have a major impact on your trading. You’re also going to find here a link to our audio commentary. This is the audio where I take you by the hand through today’s Daily Insights and its sub-tabs. Go ahead and click on that link. An audio is going to start playing automagically in the background, in another browser tab or another browser window, depending on how you have your browser configured. Go ahead and listen to that audio. The first time you do click through today’s Daily Insights and its sub-tabs, it will make sure you hit all the high points. You can always drill down deeper on your own after the audio is over. When you listen to the audio commentary, please pay special close attention to the opening and closing comments. In the meantime, for this particular Broad Market Analysis of this Charts of Interest video series, let’s click on the Daily Insights tab and the Index Stats sub-tab.

Our trading bias is neutral bullish. Our industrials shown by the Dow Jones Industrial Average gained 0.49% today on heavy, above average New York Stock Exchange volume but fell 2.03% for this past week on light, above average New York Stock Exchange weekly volume. Our technology stock shown by the NASDAQ Composite Index fell 0.26% today on heavy, above average NASDAQ Exchange volume and fell 0.69% for this past week on heavy, above average NASDAQ Exchange weekly volume. Our large caps shown by the S&P 500 Index gained 0.19% today and fell 0.89% for this past week.

Moving on to our secondary indexes. Our 100 best stocks out there shown by the S&P 100 gained 0.22% today and fell 0.87% for this past week. Our mid caps shown by the S&P 400 Index gained 0.11% today and fell 0.14% for this past week. Our small caps are shown by the S&P 600 and the Russell 2000, two different perspectives on small caps, edging up 0.02% and falling 0.21% respectively for today, and gaining 0.29% and 0.10% respectively for this past week. Our New York Stock Exchange Composite Index gained 0.63% today and fell 0.75% for this past week. Our VIX Volatility Index fell 5.94% today and gained 14.94% for this past week, closing at $13.77. Our gold ETF gained 0.24% today and fell 0.82% for this past week. Our oil ETF gained 5.33% today and gained 7.43% this past week.

Let’s take a look at our Economic Calendar. We’ll go to our Daily Insights tab and our Economic Calendar sub-tab. First thing I’d like you to do is please read the Market Reflections summary from today, and then the Market Focus pointers from Monday, June 25’s calendar entry. Also, because it is the weekend, I’d like you to take a look at the International Perspective and Simply Economics reports. These two reports are must read. They only come out on the weekends. Take a moment during this weekend break to read these two reports. They’ll not only sum up what happened the previous week but give forecasts for the week to come.

Today, we released our PMI Composite Flash. The Composite for May was at 55.7. This time around for June, we reported 56, showing a little bit of softening. Manufacturing in May, 56.6 and for June, 54.6. For services in May, 55.7, for June, 56.5.

Taking a look at our week to come. Monday, we have our new home sales numbers. Tuesday, we have our S&P CoreLogic Case-Shiller Home Price Index as well as our Consumer Confidence numbers. Durable Goods Orders on Wednesday. GDP numbers on Thursday. Looks like it will be a good economic news week.

Let’s move on to our Trading Tools tab and our Watch List’s sub-tab. We had only one ticker identified by our options trading candidate filter. This candidate is new to our list, so we’ve highlighted it in yellow. We’re going to evaluate it for its liquidity and patterns before adding it permanently to our list.

Moving on to our Trading Tools tab and our Daily Picks sub-tab. Here you can find the Trading Trainer Daily Picks™ report generation tool. We’re going to take our index tickers and do a deeper dive by taking a look at volume and trends. The volume was extremely high today. We had a volume imbalance on the NASDAQ side. Long duration trends remain bullish. Short duration trends remain mixed, almost as if we’re in a range contraction phase.

Backing this up. Let’s take a look at our template algorithm filters. These mathematically go through whatever raw data they’re presented with, looking for patterns in the numbers. We are going to present these templates with our index tickers in order to get an idea what the broad market personality is doing as well as what to look for in our watch list.

Our Reactive is showing enough pullback to call that a trigger, so is our Buffered. We’re still seeing our pullback in our Short Term Trend test and our Trend Reversal test. You can see that the pullback is still within our channel because our Bollinger Band Width Indexes are getting wide, but our bar count is also incrementing. We’re in double digits.

Team, let’s go to our Trading Tools tab and our charting sub-tab. Here we’re going to start with a Quick Review template which is a six-month daily chart with a linear scale and open-high-low-close bars. To that Quick Review template, we’re going to add our 30, 50, and 200-day simple moving averages. These lagging indicators help me determine the trend. I have these simple moving averages added to our user template here in a user-defined template in my personal profile. I’m going to apply that to the indexes, specifically starting out with the Dow Jones Industrial Average.

The 200-day simple moving average is pointing up. We’ve got our 50-day flat, our 30-day is flat. Price looks like it rebounded a little bit off of Thursday’s lows. Our 7-day simple moving average has crossed down below the 30. Let’s move to our weekly, two-year chart, where we can still see that there is an ascending line of support. We’ve got a bullish weekly polarity. Back to our six-month, daily chart. Here we can still see our bullish weekly polarity and it’s translating almost into a bullish daily polarity. This bottom has to be secured a little bit more. Let’s take a look at our five-minute chart. In our five-minute chart, we can show that we gapped up at open and then basically just went sideways for the day. Back to our daily chart. We’ll take some notes. We closed at $24,580.89. Our high was $24,663.18. Because our close was above our level of support, we’ll go ahead and remove that. We will take note that the 7 has dipped down below the 30. Otherwise, I think we’ll keep our neutral bullish trading bias.

Let’s move on to our NASDAQ exchange. This time let’s start with our weekly, two-year chart. As you can see here, even with this week of faltering price, we’re still very much in a bull trend. Back to our six-month, daily chart. We’re at $7,692.82. Moving on to our five-minute chart, just some sideways price action. Back to our daily. Everything stays bullish.

Let’s move on to our S&P 500 Index. This is the index I feel like most represents our watch list. We’ll start with a weekly, two-year chart. Again, we can see here that our polarity is heading up in the bullish direction. Switching back to our six-month, daily chart. Our simple moving averages are all pointing up and oriented for a bull trend. The 7-day is not pointing up, but it’s still oriented for a bull trend. We’re in a moment of range contraction. Taking a look at our five-minute chart. Interesting profile. Pop up at open and then sideways price action. Back to our daily chart, $2,754.88. Looks like everything else is staying the same. We’ll see if this bottom solidifies.

Let’s move on to the New York Stock Exchange Composite Index. Looks like some sideways movement. We’ll keep our neutral trading bias here.

Let’s move on to our VIX Volatility Index. Let’s start with a weekly chart. Two years worth of data. 40-week simple moving average. You can see that price has come right up to our 40-week simple moving average. It had been hinting at dipping below. Let’s move on to our six-month, daily chart. Swap out our 40-week with our 200-day. Again, looks like we’re right there. Our VIX closed down 5.94% bringing us to $13.77. Still, good premium if you’re selling premium this month.

Our overall trading bias still remains neutral bullish.

Our broad market personality is still in a bull trend testing that bull trend, or perhaps we have found a top. It still hasn’t matured.

The market is responding to the following, including but not limited to, transient external stochastic shocks. Can everybody repeat after me that these headlines around tariff wars are considered transient external stochastic shocks? U.S. fiscal policy. U.S. Federal Reserve monetary policy. The monetary policies of China, Europe, and Japan. The price of oil. U.S. economic news including employment, housing, manufacturing, and retail. And, of course, market news including mergers, acquisitions, initial public offerings, public companies going private, and earnings.

Again, team, those tariffs are causing some emotional instability in investors and traders alike; transient external stochastic shocks. Do you know how to deal with them?

That’s all I’ve got. Please take care.