Is the Economy that strong?
May 25, 2020
I recently began an Introduction to Trading and Investing Workshop that will provide you with the tools and confidence to take control of your own investments. This will be critical if the market behaves like I think it will.
It has been a well received one-on-one screen share consultation lasting approximately two hours with a one hour follow-up.
The follow-up will occur within two weeks where we discuss your challenges while reviewing some of your trades and ideas.
I believe that this workshop will be of great benefit to both new traders and veteran investors. You can sign up on my website with this link: Trading and Investing Workshop
Our free Telegram channel, Klarenbach Research, is growing in numbers and the members are getting more comfortable with asking questions regarding traditional markets and Bitcoin.
This is the link https://t.me/klarenbachresearch.
I hope you check it out.
We have been doing well with our Trade Ideas and the ideas posted in our Telegram channel.
I have included the posted open and closed trades since the publication started.
As you can see, finding Investor Class Ideas has proven difficult while the Telegram channel has been effective for Swing Trade Ideas. We are pleased with our results, now the challenge will be to retain our gains.
MARKET REVIEW
I thought the previous two weeks would provide more direction on the markets. Perhaps this week will determine if this a dead cat bounce or that the market is going higher.
It will be interesting to watch.
Be careful with your long positions and long entries.
**Click on any chart to enlarge**
S&P 500 Index (SPX)
On April 5, I posted a daily chart of how I thought price action would play out. You can find it on TradingView here: https://www.tradingview.com/chart/SPX/tFmCL9rR-SPX-Idea/
So far my idea has been pretty accurate.
We discussed this level of interest here: https://klarenbach.substack.com/p/uncertain-times
Price is still bouncing within my green area of interest above an advancing 50 DMA. The longer price stays in this green area, the more likely it will resume to the upside.
Price got rejected at the .65 fib level and is still below the 200 DMA.
I still believe that this is a dead cat bounce and will be looking for confirmation to go to cash or to enter short positions.
At this time, I still consider the B Wave from my March 26 tweet near completion and am waiting for confirmation of the C wave formation.
NASDAQ 100 INDEX (NDX)
The NDX is just below all-time highs and is bullish above the advancing 10,20, 50 and 200 Day Moving Averages.
Dow Jones Industrial Average (DJIA)
On April 5, I posted a daily chart of how I thought price action would play out. You can find it on TradingView here: https://www.tradingview.com/chart/DJI/2qne4HCp-DJI-IDEA/
The DJIA is weaker than the S&P 500 and the NASDAQ. Price is now above an advancing 10, 20 and 50 DMA. Keep an eye on the DJIA next week
Until I get new information, I still think this is a dead cat bounce with further downside.
TSX Composite Index (TSX)
The TSX is looking similar to the DJIA.
On April 5, I posted a daily chart of how I thought price action would play out. You can find it on TradingView here:
https://www.tradingview.com/chart/TSX/ZHhZrUpz-TSX-Idea/
S&P 500 Volatility Index (VIX)
The VIX is consolidating above the 200 DMA. Perhaps volatility will pick up and the S&P will go lower.
West Texas Oil (WTIC)
Oil keeps grinding higher and that is good for my part of the world.
If you are interested in an example of how Technical Analysis can be effective in forecasting price action, check out this December 12, 2018 oil forecast on Tradingview.
Here is the link: US oil Idea for TVC:USOIL by Trent.klarenbach
I combined fibonacci retracement and extensions with support and resistance lines to create the forecast. It turned out well.
TradingView allows posting of ideas and with paid subscriptions allowing one to see the following price action. The chart below depicts the price action since the original post.
SPDR Gold Trust (GLD)
GLD looks like it could go higher
US Dollar / Canadian Dollar (USDCAD)
The bulls and the bears are fighting for control with a slight edge to the bears as price closed the week below the declining 10, 20 and 50 DMA.
BITCOIN (BTC)
BTC closed below my Hyperwave Phase 7 line.
From last week:
BTC on the BLX Index and continues to look strong.
The above Weekly chart is the BLX index with my version of the Hyperwave phases. I won’t get into the Hyperwave theory, however, subscribers to that theory recognize how important Sunday’s weekly close is. A close below the Hyperwave Phase 7 line could mean that sub $1000 is still on the table.
WHEAT FUTURES (ZW1!)
Wheat is still within my Ascending Triangle. A level of interest is where the 200 Week MA and yellow trend line converge. That level could be an opportunity to go long.
Currently, this is a no trade zone for me.
SOYBEAN FUTURES (ZS1!)
If Soybeans don’t break to the upside out of that falling wedge and instead breaks down through the current level of support, it could be a long way down before a significant number of buyers are found.
TLT vs SPY
(ISHARES 20+ YEAR TREASURY BOND ETF vs SPDR S&P 500 ETF TRUST
I interpret this chart as money is flowing from Bonds to Equities suggesting the S&P 500 has more upside.
We initially discussed this chart in the March 29, 2020 Anticipating a Change in Market Direction publication and how it was used to stay out of the S&P 500 as it was setting all-time highs.
INVESTOR CLASS IDEAS
The Investor Class opportunities remain pretty thin as the buyers and sellers fight to gain control of the direction of the market.
There are a number of stocks that are close to ticking all the boxes, however, they need a few more days to set up.
Keep an eye on Biotechs.
These ideas will be posted in the Telegram channel prior to the next day’s open.
Here is the link: https://t.me/klarenbachresearch
REMEMBER, CASH IS A POSITION
Don’t FOMO (Fear of Missing Out) into a position. Have a plan.
SWING TRADE IDEAS
There are a number of stocks that are close to ticking all the boxes, however, they need a few more days to set up.
I have a list of 165 prospects that I will be monitoring and will post in the Telegram Channel as a trade sets up.
Here is the link: https://t.me/klarenbachresearch
AURORA CANNABIS (ACB)
ACB is up 64 % since the idea was published in the April 5 newsletter. It was down 40% at one point.
Take a look at the crazy price movements.
CIEN CORP (CIEN)
We have been raising our stops, letting our winner run.
Currently, CIEN has 10% gains.
ZYNGA INC (ZNGA)
We have been raising our stops letting our winner run.
Currently, ZNGA has 6% gains.
MEG Energy Corp. (MEG.TO)
Keep an eye on MEG this week for a break out over 3.42 with a Stop at 3.04
That is all for now!
Drop me a line with any questions or comments. You can do that here
I am actively posting charts and ideas on social media.
You can find me here:
Klarenbach Research: klarenbach.ca
Telegram: Klarenbach Research
Twitter: @trentklarenbach
StockTwits: trentklarenbach
Tradingview: trent.klarenbach
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