Stock chart patterns and technical analysis (TA) explained simply. Disclaimer: This blog and all its contents are for educational and entertainment purposes only. Do not trade or invest based on any information seen on this blog. Please read Terms of Service. The K E Stone blog sites (Keybot the Quant) are blacklisted by Google, so enjoy the ad-free experience, and only use the Donate button when supporting the sites.
Over the last couple weeks we have watched many of the charts in the housing sector display negative divergence and start to receive their smack downs. Builders, flooring, gypsum, paint, and even lumber with WY coming off the top. The Boise IPO two days ago, BCC, got everyone bulled up over lumber as if it was a new element discovered for the Periodic Table. LL has managed to remain lofty even printing new highs but both the weekly and daily charts, across all indicators, are negatively diverged, with overbot stoch's and rising wedge behavior, all bearish signals. Thus, a spank down is likely on tap and Keystone opened up a short position in LL yesterday. With the winter storm, however, some of the rebuilding plays may see a quickie bounce such as GNRC (generators), and HD and LOW as folks search for shovels, salt, flashlights, etc... A snow storm is not like a hurricane or tornado so a large need for lumber is not anticipated. The snow will be the heavy wet snow variety so it may cave-in some roofs over the weekend but hopefully folks will weather the storm. On the weekly chart, note the blue bars that showed a potential H&S pattern that failed. This was highlighted in January as it developed and as fate would have it, the bulls kept pumping higher on the housing recovery euphoria, and the right shoulder was negated with the higher price and the H&S pattern was negated. It is always good to look back at previous thoughts to see how they work out. This is also of value since the SPX H&S in play now, the Quasimodo H&S, with the right shoulder at the same level as the head, just as LL was in mid-January, shows what may happen if the equity bulls have their way in the markets. The SPX 1514-1515 resistance is a key level, bulls need to punch up through and bears have to hold this level at all costs to maintain a right shoulder. Back to LL, with the higher high in price now, this would serve as a new head for an H&S and the October high would serve as a left shoulder. The 48 is a neck line, so head at 60, that would target 36, if the 48 would fail. First thing is first, the projection is for a spank down to occur due to the negative divergence. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
The best trading/investment returns in my experience have been realized when one can identify the historical lows of a particular commodity’s market and it will be interesting to determine if in fact Lumber is at historically high prices. But not knowing if it is or not I’ll certain go figure that out as the snow is falling today here in New York. So changing subjects for a moment Coffee appears to be very near its historical lows. It appears we are going into the zone where coffee will base 1.350 - 1.400 and so as not to get to the party to early closely monitoring Coffee at these levels and taking advantage of trading opportunity’s [iPath DJ-UBS Coffee TR Sub-Idx ETN (JO)] together with options strategies could put us in a position to take 200% percent returns out the coffee market in the next 18-36 months.
Yep, like folks say when they talk their ages, that 40 is the new 20, or 60 is the new 40, coffee is the new natty. Natty was hated last year, the big joke, and it was stellar as the year plays out; will be interesting to see if coffee catches a stimulative buzz as the year proceeds.
Can’t draw any seasonality conclusions with the recent price action in coffee either is a wait and see game as it's going to be acts of God that will be the catalyss that get this market off the ground in any significant way (there is a lot supply). Today’s action is a typical basing with my fingers crossed for a slight pop I want to sell my shares at a small profit and buy them again at lower prices.
got a high volume broken upper rail on the 30MIN coffee chart today elevating JO which is now trading at slight premium to the underlying I would post the chart that I drew up but Interactive Brokers is not for artists it doesn't save files corectly and the new workstation deletes your trendlines the moment you switch screens. It is what is lets see if coffee can push to 1.4300 in the days to come.
The best trading/investment returns in my experience have been realized when one can identify the historical lows of a particular commodity’s market and it will be interesting to determine if in fact Lumber is at historically high prices. But not knowing if it is or not I’ll certain go figure that out as the snow is falling today here in New York. So changing subjects for a moment Coffee appears to be very near its historical lows. It appears we are going into the zone where coffee will base 1.350 - 1.400 and so as not to get to the party to early closely monitoring Coffee at these levels and taking advantage of trading opportunity’s [iPath DJ-UBS Coffee TR Sub-Idx ETN (JO)] together with options strategies could put us in a position to take 200% percent returns out the coffee market in the next 18-36 months.
ReplyDeletehttp://static.cdn-seekingalpha.com/uploads/2012/12/31/saupload_CoffeeLongTermMonthly.jpg
Yep, like folks say when they talk their ages, that 40 is the new 20, or 60 is the new 40, coffee is the new natty. Natty was hated last year, the big joke, and it was stellar as the year plays out; will be interesting to see if coffee catches a stimulative buzz as the year proceeds.
ReplyDeleteCan’t draw any seasonality conclusions with the recent price action in coffee either is a wait and see game as it's going to be acts of God that will be the catalyss that get this market off the ground in any significant way (there is a lot supply). Today’s action is a typical basing with my fingers crossed for a slight pop I want to sell my shares at a small profit and buy them again at lower prices.
Deletegot a high volume broken upper rail on the 30MIN coffee chart today elevating JO which is now trading at slight premium to the underlying I would post the chart that I drew up but Interactive Brokers is not for artists it doesn't save files corectly and the new workstation deletes your trendlines the moment you switch screens. It is what is lets see if coffee can push to 1.4300 in the days to come.
ReplyDelete