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Stock Market Technical Analysis 5-21-19

Stock Market Technical Analysis 5-21-19

hi this is Randy Finney with right side of the chart and this is a closing market rap for a Tuesday May 21st 2019 we'll keep this one short there's really not too much to cover today we haven't really seen many or any technical significant technical events today so just quick recap markets trading between support and resistance to key levels I'm watching about 289 will call 290 if you want down to about 280 or so on spy that's the recent lows and the level here and again that that recent low it's not just the reaction low it's everything that happened back in late 2018 and earlier this year again so pretty important support level bearish if broken I do still believe it will be taken out sooner than later but you got a remote you know keep in mind we were quite oversold in the near term coming down to that level last week and now that we're between support and resistances we may chop around for a little bit longer consolidate and still anybody's game but you know like I said I I still think there's a ultimately that that range will be resolved to the downside here QQQ similar levels 179 or 178 at the lows and 1-86 at the high recently that's resistance again that's not just an arbitrary level it's not just the recent reaction high which of course there is that as well you always want to watch reaction highs for potential pivot points resistance levels bullish if taken out bearish if we fail there again but it was also remember that was a failed breakout in cuckoo cuckoo cuckoo put in a double top high back in 2018 broke out traded above there for a couple weeks and failed that breakout came to back test that level again and failed again so that's quite a bit of significant technical action if you will off that level so that that's a big level to watch right now the Bulls need to see that get taken out and if they do they'll probably have a good shot at taking out the previous highs Bears want to see the recent lows go for the reasons I just mentioned before not only it's a reaction low but also technically significant on QQQ as well with a lot of reactions around level so that's it and until then you know we could chop around a little bit longer or we could break out of this range any day now it could happen tomorrow those PPO as I mentioned still still bullish holding above that zero line making a backtest right now on both QQQ and spy everything else that I've covered recently but let's zoom down to the let's look at the future is real quick here es sp500 emini futures were zoomed in here a little bit on the 60-minute chart you know there's a longer term you have the uptrend line off the lows which was broken back here and we've been stair stepping our way down within this descending megaphone type pattern right here so again this is largely an update to the video I did earlier today I did an early session video for members only and included the markets and as well as a lot of the trade ideas that we're watching now and in trading there's that pattern there so you want to watch this downtrend line it's just slightly overhead from where we where the the futures will continue to trade so then maybe we hit that overnight maybe not either way it is resistance and of course you have that 20 what is that twenty eight sixty forest level right there which is resistance and so far we popped a little bit above it today but for the most part that's about where we failed so you have quite a few reactions back here in the past and so those are levels to watch breakout above the downtrend line I don't see much stopping yes until it gets up here at about 28 92 that would be the next resistance and excuse me and it's a pretty formidable resistance zone as well so should QQQ or es I'm sorry es the SMP 500 futures pop up there that would be another objective shorting area and if they take that out that starts to bring the bearish case a little bit into question here but won't completely wipe it out but again that's where I want to see us remain down ideal scenario for the bearish case would be that this pop that we had today is about all that's left in the market and it's gonna go and take another leg down soon I'm slightly leaning towards that scenario so let's see what happens in the overnights and here it's a 60-minute chart NQ these trend lines let's not put too much into the trend lines let's just look at the let's look at the price action here somebody had mentioned this in the trading room you know hey that's Bear Flag right here Randy you know it's possible it's what I said it's a little little bit large in relation to the flagpole if you want to consider that move down the flagpole or at least down from here the flagpole is the impulsive move leading down but for all intents and purposes it has the same net effect whether it's a small rising wedge pattern or bear flag pattern my answer was if we make an impulsive break down below it that would likely spark the next wave of a selling and probably take us down here to that 70 to 75 ish level that's about where we reversed just a hair shy of that last week doing so as I outlined and again it's my preferred scenario more downside in the markets from here minimal upside if we happen to creep up a little bit more my next resistance is about 75 43 right there but I do prefer a thrust down soon and in doing so it might set the stage for for maybe a swing trade if we can come down soon even undercut that support that I have there and doing so put in a divergent low right here maybe even on the RSI what I'm drawing out as a scenario so this would be positive divergence so let's use that aerial tool let's just say we thrust down here undercut the recent lows but then reverse and we do so with putting putting in divergence here on the PPO and the RSI that could set the stage for a nice swing tradable rally up it is one potential scenario I'm almost leaning a little bit against it but I'm certainly going to look out for it and if it starts to develop or I think that may play out and that's that'll be you know that'll be how I'll be positioned at the time reversing from shorts to Long's there one other thing I wanted to show you before we wrap this up is let's take a look at well let's talk about the gap in last night's video I told you I was leaning towards maybe a gap back fill you know leaning towards some upside in the futures last night and that's what happened we did reverse and we lifted the futures were up and cue futures at one point we're up well over 1% the queues themselves QQQ because it opened up with a gap it closed up about 1% but as the day went on here I'm just watching the the both watching the price action as well as what I'm about to get to here on the fang stocks I you know I closed my lungs reversed it to a short expecting a little fade into the close or the half last hour of trading is what I said in the within the last hour of trading expected a ramp there or and or into the clothes that's pretty much what we got you can see it's not a whole lot but uh that was that was right about here heading into you know just before the 3:00 p.m. hour got underway and they did sell off a little bit at the close and what I was trying to point out here is you know we failed to back fill the gap there is a gap there's uh there's where we closed on Friday right there and normally especially in a healthy trend once you enter a gap from below the gaps tend to get back filled pretty quickly so I view this as is is pretty much weakness yes we were up today but the fact that the queues couldn't even make a back fill that gap I see what I think there is I think too many eyes are looking at it and you're gonna have a lot of sellers stepping in there either way maybe tomorrow they will backfill it I don't know tell you my convictions very near-term aren't I right now but I'll be clear you know I went back to going back and you know in the active trading account back to shorts my swing shorts that's a whole other thing I are raised those accounts that's swing trading stuff that's still short but in the active trading account you know I went from going long you know going home long in the futures and being long yesterday into reversing that before the close and I think we'll come on down here and move lower further the remainder of the week spy SP y 60-minute chart here's a downtrend line I covered in today's video fact at the time we were down here we hadn't hit it yet it came in off the highs right here this high not be high but about the May 3rd highs come in where were a lot of reactions right here so here's a downtrend line to watch and so far we stopped cold at it we haven't we didn't have an impulsive rejection off it at least not yet but I suspect we'll probably gap down tomorrow and come on back down and continue lower just based on everything I'm seeing and then finally to to make it real clear as to why I'm still favoring more downside in the market the fangs are broken and again I said when tech breaks and market breaks when the fangs break the market breaks this is Microsoft here's our trend line off the lows on the 24th breakdown back test you know it's it's still above the recent lows and that'll obviously open the door for another leg down but this to me is a you know not an all in kind of short broken chart but it's a broken chart it's a sell signal breakdown and you know stock that I think's going lower and that's not even the worst of a lot you look at Amazon there's a nice wedge overbought divergent high boom breakdown back tests and starting to you know rolling over since the back tests you know I think you can see it there but just to show you what I'm talking about here's your break down there's your back test and so far moving lower and also below this I think that's a pretty significant former support now resistance level about 1875 50 so I think there's more downside to come in Amazon and if there is that almost guarantees that QQQ will head down as well since Amazon such a top weighted component and then of course you have Apple Apple you know fell hit my this target here the other week ago 182 50-ish bounced back made almost a perfect back fill the gap and then boom move back down hit that level once more bounce but this is just a stock that's not looking it's looking weak here's a stock to me that just broke down recently from a nice clean bearish rising wedge pattern divergent I had a break you know initial leg down little counter-trend rally kick back rally stopped rightward should stop on the back fill that gap which is resistance it could have went up here to number 197 70 and still you know very well fit the you know a normal counter trend rally within a larger trend but I think Apple has more downside here and then I gave my color-coded targets this is where you know where things will start to change from just a healthy health correction action two things are going to get a lot worse here and there in the coming weeks two months if these levels go especially that last one so there's Apple just not looking hot still well off the highs and as you guys know that's a market-leading stock alphabet we all know what happened alphabet this charts a little busy let's just jump forward to Facebook Facebook broke this this is the primary uptrend line I had that's a breakdown and an ear back test I have a secondary trend line here that hasn't given way yet but it's close to and again it's it's just everything else we're already priced into the charts the divergences the extreme extreme are very overbought readings there and of course when I go out to the weekly chart which I'm not going to do here so this you know taken together with what's going on in the markets but when you look at these market leading Fang stocks and make no mistake about it the market is not going to new highs without these guys this these these stocks are pretty much the market they're very over weighted especially in QQQ their top way to compare components of the S&P 500 and more than that it's a psychological impact and emotional impact a lot of people love these stocks have a lot of money in these stocks are over weighted both individuals and institutions so that's that yeah so there's my near-term outlook and we'll see what happens tomorrow if things go the other way all I've given you some levels to watch on the upside that might start changing the near-term technicals but remember at the end of the day if we don't break down reverse tonight and head down and take out this this level tomorrow those recent lows keep in mind that we could be looking at a little more chopping here but I don't think we're gonna chop here for more than a few more days that's just my guess I think markets when you start to get a correction you get a little kickback rally for maybe a week or so if if the bigger move that I'm looking for is coming I think it'll it'll come soon I don't think we'll have to wait much beyond much beyond this week we'll see wrap it up here and I'll pick it up tomorrow this has been Randy Finney with the right side of the chart I hope you enjoyed it

Reader Comments

  1. Looking at the vix, you would never know we have battle groups in the middle east, trade wars with the second largest economy in the world and a soaring dollar..

    Thanks Randy.

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