Our layout -- E signal

We often talk about the tools of the trade in our newsletters.  We've gone through a big change in the last week and wanted to update our readers.   We've been trading with QT/IQfeed for many years as Esignal did not have a simple column that we needed for our type of trading, the volume percent.  The volume percent shows what percentage of the average volume a stock is printing at any given time.  For example if by 10AM EST your stock volume percent panel is showing 40% this means your stock has very heavy volume as it has already printed 40% of its average volume (we usually use 30 day average).

A recent turn of events:  it was decided by its owners (AMTD) to let QT die a natural death.  It will not be maintained any longer and when IQ feed comes out with their new update, QT will most likely not be able to function properly.  We needed an alternative before this happened.  Last week we downloaded and played around with multiple different software platforms (Investor RT, Sierra, Ninja, TradeStation, ToS and E-Signal) and found E-signal to come closest to what we were looking for (plus we had been with E-Signal many years ago so it was still familiar).   Fortunately at this time E-Signal was also rolling out their new updated platform, E-Signal 11.   Guess what -- E-Signal 11 has the capability of adding volume percent as a study, which then can be added as a column indicator.   We added this function today and have everything we want.

E-Signal is faster than QT, has a cleaner more intuitive feel, the charts look nicer, it's not as buggy, and now has the volume percent!

Note the 6th tab is the one we custom added (we sent out the code to our subscribers in today's newsletter to cut and paste into their platforms). 

Our conversion is complete.

On one monitor we have different watch lists split into sectors:

Momentum (think LULU BIDU CMG OPEN), Tech, Ags, Coals, Financials, Oil and Gas, metals, ETFs, etc
On another monitor we have linked 3 min, 5 min, 15 min, 60 min and Daily charts to all our watch lists. 

Typically, the Esignal policy is a "30 day money back guarantee" in which you pay on day 1 but if you cancel within the first 30 days, your credit card will be refunded.  However they offered to waive the fee completely in the first 30-days ($129) as long as you are a new customer (or someone who has not used eSignal within the past 12 months).  Exchange fees will apply however (you will need NYSE Nasdaq at the minimum for $10 a month) and mention HCPG to our contact rep.  

If you would like to try eSignal, please contact Andrew Mui at 1-800-322-1510 or andrew.mui@interactivedata.com and mention you were referred from "Highchartpatterns.com" or "HCPG".  Through a special arrangement with eSignal and HCPG, he will give you a FREE month of eSignal (Exchange fees will apply. Other restrictions may apply) without any payment upfront.  This offer is NOT available through the website nor from any of the other representatives at eSignal.  


Many thanks to Ken who wrote the code : (EFS script for volume percent ).  Here's the exact instructions on how to get it set up on Esignal 11

Oil and the Market

We're coming up to a point of inflection in the market as the USD is getting hammered on a daily basis, crude is over 105 and Brent over 116.   Something has to give soon.  The only way, we believe, the market can regain its upside momentum is if oil lets up.  With oil above three digits expect what we have been experiencing in the last 2 weeks, as illustrated very well by the following chart, nervous chop.  Nevertheless considering how much the market has run from the March 2009 bottom,  it's a testimony to its strength and the stickiness of its trend that it hasn't given back more with the significant sudden rise in crude.    A fragile economy just starting to recouperate and $100+ oil is not a good combination.   The economy can handle a crisis induced temporary rise but can it handle these prices (and the coming food price hikes) on a longer term basis? 

When we trade the ES these days we do it alongside CL_F.  The inverse correlation has been very strong the last few weeks and until this subsides, active traders need to have crude front and center of their screens. 

Trannies

Real panic in the trannies today as the oil rally finally caused some real selling in the sector.  In fact we can't remember the last time we saw so much blood in this sector.    Support at 89 finally stemmed the bleeding.

This chart belongs front and center of your screens -- 89 now is big, symbolic level.  Don't underestimate the importance of the trannies for market health.

Support Trades still working

We have been wanting these alerts since last week when Ags started selling off and they have been in our newsletter for days.    Big reversals on ALL our support trades that triggered today.   We were involved in all of these and tweeted the Ag buys (and CMI which we included in the basket) right at the bottom today in stocktwits.   We sold all of them for profit but not as much as we would have liked, but we did get a bit of revenge with XME as we got back in after the SPX headfake lower (while Trannies held -- as we tweeted real-time, that was bullish).

These are all the triggered alerts from the HCPG newsletter last night.  Arrows represent alerts. Epic reversal in the Ags.

A few were overshoots (we have a whole strategy around support trades and when they only grind instead of panic move down, we go to overshoot mode).  If you don't know what we're talking about read about it here:  Overshoot strategy

Don't confuse buying support with buying a falling knife.  Our best trades over the years have come not from breakouts, not from shorting breakdowns, but from buying support.  

All of today's lows in the following now represent "line in sand" areas, also keep eye on today's low on XLF (50SMA) and IYT (89 support).  


AGU our alert was 86.5-87 -- perfect.

CF 127.2-128 overshot as panic completely took over -- incredible reversal.  The most consistent strategy we have in our arsenal is to buy when others are panicking (not news nor earnings though!) as a whole oversold sector hits support. 

MOS we liked 77.5-78, overshot to trend-line.

POT 164.7-165 was our area to watch.

Wrote in newsletter last night to look for reversal on CMI in the 98 zone on gap fill.

Trend line bounce.  69 was 50SMA but we wrote in newsletter last night that we liked 68 more for overshoot.

Tells and EMA talk

These wide range days are often very good for forming "line in sand" lows and highs on key stocks.   Let's take a look at two on our screen:

FCX held 50 today -- keep this important stock on screen as tell to see if it can hold 50 in the next few days.   Next support 48.

AAPL sliced right through trend-line but bounced on the 50SMA.   First touch since September/2010.  If the 50SMA fails, next support is 325.

 Daytrader Talk:  very classic move here as SPY gapped down, bounced hard until it hit the 20EMA.    Market lost momentum and down it was again -- very good risk/ reward short strategy on descending EMA (and for longs of course ascending EMA)  if stock has travelled a good distance to hit it (and as such is extended).   Entry would be against EMA with stop on high above.   If you want to go long then wait until EMA flattens out and stock overtakes EMA but never buy against descending EMA. 

All eyes

All eyes are on silver futures right now (spot trading up 5%) and tomorrow all eyes will be on silver stocks.   Insane move up and continuation on the breakout over 31.  If you're not already involved: at these levels in our opinion there is no good risk/reward trade anymore.   If you want in long, wait for consolidation/base/pullback.  If you want to short....wait for what you perceive to be a blow off top reversal, then get in with stop above.  We have no interest on the short side -  there are easier trades out there than to short this panicked freight train. 

Crude futures up 6%.  Notice how the previous geo-politcal ramp (Egypt) was given back all back (on WTI, not Brent).   However, we think this one will have more sticking power aas Libya is one of the top ten exporters of crude in the world.   Imagine what will happen if this middle east storm spreads to the big leagues, i.e. Saudi Arabia. 

Commodity Talk

We're finally seeing some volatility enter the picture -- good for us active traders. 

Coal stocks not looking hot as many are through the 50SMA today -- broken for now, we're not interested in touching these for a while.   Our favorite in the sector, WLT, has a similar chart.

Posted this chart right at the 50SMA yesterday noting that it had rallied all the way from 200 SMA support to now 50SMA resistance.  Nice reversal and follow through today -- technically we still like the sector but the move needs to be digested before we see good risk/reward entry in the juniors. 

 

Posted chart on Monday  "Shares are hard to locate but if you can this looks like decent  entry short.   Risk defined with stop on today's high."  If you found the shares, congrats, working well.    First major support not until trend-line currently at 146-147.

FXI held 41.2 support that we posted last week -- we'll see if there's any continuation here tomorrow.  Very significant divergence between US market and  China, Brazil and for the most part emerging markets.  

Breakdown continuation in FCX today -- and looks like it wants to kiss the 100 SMA which would be first support.

Commodities are telling the bear story and stocks like AAPL are telling the bull story.    Incredible power and resilience in the stock.

Mixed Bag

We had mediocre alerts (i.e. not our favorite stocks) going into today and most of those triggered for small daytrade pops.  Nothing too exciting.   It's a mixed bag and we don't feel particularly strong conviction in either side but do believe the action going forward is going to be less "easy".   We have on medium position short ES_F but are not gunning it and have 2.25 point stop (1318 entry, 1320.25 which is just over today's high, is our stop), so keeping things tight.  (update, scratched the trade on lack of follow through.  Will get involved again if we see further cracks to the foundation.).


On the bullish side and reason we can't go all hoo hah bearish: charts of leader stocks like AAPL which look strong and still trending higher.

GS through 50 SMA again and looks good, sector picked up steam today.

OIH has no clear resistance but severe congestion in the 155-160 zone.  Shares are hard to locate but if you can this looks like decent  entry short.   Risk defined with stop on today's high.

On the bearish side crude weak. 

And the stock we like the most as our tell, FCX,  back through 50SMA with full reversal today.

Mixed bag. Take a side, and keep things tight!

Precious metal Review

We've had a few posts on precious metals, especially when they were crashing: precious metal support  and gold support . 

We wanted to review a host of precious metals that we follow.  As we're written in this blog and in our newsletter for years now -- for us gold is meant to be bought at support and not at breakouts (as opposed to tech for example).  

ABX held on the 200 SMA and can be bought on any pullback with stop on 200 SMA break.  First target is the 50SMA.

 As we posted real-time on StockTwits today we entered AEM swing at 69.77.  We think it can do 74.  Our stop now has been moved to break of 71.

 ANV fantastic price action -- note how buyers never even let it hit the 200 SMA and it's nearing new highs.  Too extended for us but we'll definitely pay attention on the next support cycle.

 BVN went through the 200 SMA but held on the longer time-frame ascending trendline .   Today it broke up through descending trend-line and looks good to go to at least the 50SMA.

 Our mistake in silver stocks was wanting too deep a pull-back.  Buyers snapped these up before our support got hit.   Note how 100 SMA held on CDE ( we wanted 21).

 EGO held right on support. 

 We would have picked up EXK aggressively on the 200 SMA but alas the daily support held -- very nice bounce and through the 50SMA.  Too extended for us -- we'll have to wait on this one.

 GDX went through on daily 200 SMA, and not much of a pattern here but...

As you can see, perfect weekly bounce on the 50SMA.  Very nice follow through and we bet there are many stops under that 50SMA.  That's the line in sand for gold position traders. 

GDXJ very clean hammer on the 200 SMA -- acts even better than GDX and has our full attention. Today it broke the trend-line and looks like an easy trip to at least the 50SMA above. 

 GLD undercut support and now has stopped at the 100SMA -- we were too cheap here wanting just a few more points downside before getting in and missed the boat.

 Through trend-line today and looks good to go for 50SMA visit.

 HL very nice clean bounce on support and 100 SMA.   The 50SMA above now will most likely slow down this bounce.

IAG very impressive chart here -- big break of trend-line on weekly.   Very impressive.

 Another impressive name here in the sector -- note how strong the stock held as the sector was hit in early Jan.  

 For the most part silver held support much better than gold -- MVG's 100 SMA was like a wall, now taking off.  Should see 50SMA easily.

 Our least favorite stock in the sector due to how messy/edgeless it is but worth watching because it's a significant portion of GDX.

 NG through trend-line with no problem today.  Nice clean chart.

 PAAS didn't hit our 200SMA level and instead bounced on daily support. Today paused at 20SMA.

 We dislike RGLD probably as much as NEM.   Messy chart, no clean edge.

 SIL is good to watch as silver miners ETF.    Held daily support -- and big bounce but watch for it to at least pause at the 50SMA.

Held daily support and didn't make it to our deeper 24.5 number -- very loved sector.  Through the 50SMA today and looks like it wants more.   We're seeing a lot more momentum and love in silver than in gold.  

Our favorite stock in the precious metal sector -- bounced on daily support and now heading to the 50SMA. 

SSRI also held support and didn't make it to the 200 SMA -- for the most part there were too many buyers like us who were waiting for support triggers and when that happens often the stock reverses just short of the level you're stalking.  It also is evidence of how liked the sector still is among traders.

Bounced on daily support but now should at least pause at 50SMA.  Too extended for us to get involved but great price-action off the bottom and one we'll definitely watch in the near future.