Stock Market Update : Week 32

SPY traded back below it’s 200MA once again.

The $113 level, which was the previous peak made during mid July proven to be too tough a resistance for SPY to clear this time.

With the break down on last wednesday’s candle, it not only came below the 200MA support, it also broke the up sloping trending as if it never exist.

This looks pretty ugly on the technical side, but next week we might see a slight pushback, revisiting back to the 200MA when traders covering their shorts and take profit.

The next level of solid support that we might hope for lays within the range on the ~~$105, the lows which were made during the previous 2 months.

A break below that level will really really really make things very very very ugly.

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Continue from last week’s post, the Elliott Wave that we mentioned about gold.

Gold seems to be quite strong, and in the making of another leg up, forming a new wave-1.

But don’t jump in too soon yet. We need a clear above the previous retracement high of “B” (shown as dotted thick-blue line) to confirm the validation of this wave-1.

A good way to trade GOLD from the bullish side is, to wait for the confirmation of this wave-1 by seeing a break above level “B”, and then entered GOLD long when it pulled back and form wave-2.

The rally of wave-3 (from point 2 to 3) is always the biggest rally in a 5-wave Elliott wave, thus giving the juiciest trade.

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Ouch …. Crude oil failed it’s retest on last week’s breakout.

It looks as if to me that the breakout from the $80 level was so strong (with such a long white candle) that this retest will surely succeed, and that crude oil will move higher.

Now that it has shown that the breakout fails, our next support will be at the up sloping trend line, which is where price is currently resting at,  ~~ $75.

And if it continues to drop, a revisit back to the next 2 support level ($71, then $67) will be inevitable.

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Continue from last week’s post,and I mentioned that the USD might get some support at the 62% retracement level, and indeed it did this week.

It bounced back strongly from the $80 level.

The $83+ level is the level to break. If it breaks above, this will make it look exactly like the Crude Oil case, a beginning of a wave-1 Elliott Wave.

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Ouch ……

ALTR broke below it’s important $27 support level.

Tuesday formed a huge HAMMER candle pattern.

This was suppose to be a very bullish candle signal, especially when it formed resting right above a support level. This gives a good opportunity for a lot of traders to get long into this stock.

What’s critical is the next candle.

See that the next candle traded below $27? Most of the traders that got long on the Tuesday’s hammer candle will put their stop exit at the candle’s low, which is somewhat around $27.

And the next day’s candle which travelled below that level triggered a lot of stops, which eventually caused a rush of stocks being sold, and thus, making the huge drop in price the following day.

The next 2 support levels that we have to pay attention to is $24, and if that fails, $22.50 will be our last resort.