Is this Rally over?
June 13, 2020
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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.
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I hope you check it out.
We have had good luck with our Trade Ideas and the ideas posted on our Telegram channel.
I have included the Trade Results Summary. The number of trades is becoming too lengthy for this publication.
After having a pretty spectacular previous two weeks, this week handed us a dose of reality. Trading was getting too easy and I was getting pretty nervous. I did see some nice trade setups early in the week only to get stopped out for losses on most of them.
As you can see, finding Investor Class Ideas has proven difficult with more success with Swing Trade Ideas and the Telegram channel. There are a few blemishes, but overall we are pleased with our results.
MARKET REVIEW
This past week, the markets taught us a hard lesson about how difficult trading is. We had spoken on the Telegram Channel about how crazy easy it was to make quick huge profits. My experience has been when trading gets too easy, the market reminds us how difficult trading and investing is. We got that reminder this past week.
I suspect this could be the end of this rally. Time will tell.
**Click on any chart to enlarge**
S&P 500 Index (SPX)
We got a correction on Thursday and the expected bounce off the 200 DMA. An Island Top Reversal seems to have been formed.
I still believe that this is a dead cat bounce and feel better about the idea this week than last.
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)
NDX pulled back after setting a new ATH. Hard to argue with that. Software is eating the world.
Dow Jones Industrial Average (DJIA)
The DJI pulled back below the 200 DMA into my green area of interest. This is bearish.
ISHARES TRUST RUSSELL 2000 ETF (IWM)
The Russell 2000 is back below the 200 DMA. This is bearish.
TSX Composite Index (TSX)
The TSX got rejected at the 200 DMA and is back inside my green area of interest that we have been discussing for months. Price found support at the YTD VWAP. This looks bearish to me.
S&P 500 Volatility Index (VIX)
The VIF
From last week:
X is at the 200 DMA. Does the VIX bounce here and the S&P pulls back?
VIX did bounce off the 200 DMA and the S&P 500 pulled back. Technical analysis works.
The VIX looks like it will rise which most often means a drop in the S&P 500.
West Texas Oil (WTIC)
Oil appears ready for a pullback or consolidation.
GOLD Spot (XAUUSD)
Gold appears ready to break out higher.
US Dollar / Canadian Dollar (USDCAD)
USDCAD found some buyers on Thursday. I expect a retest in the area of the red horizontal line. Will that happen before or after my measured move green target area is reached?
US Dollar Currency Index (DXY)
USD found some strength is weakening against this basket of world currencies.
BITCOIN (BTC)
Honey Badger is finding support at a trendline and the 50 DMA.
WHEAT FUTURES (ZW1!)
Wheat looks like it wants to test the area 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!)
Soybeans continue to look like they are breaking out of this falling wedge. We have been discussing this for weeks. This is good for farmers.
TLT vs SPY
(ISHARES 20+ YEAR TREASURY BOND ETF vs SPDR S&P 500 ETF TRUST
Nice bounce off the .786 fib level and back above the 200 DMA. Bullish bonds, Bearish S&P 500.
SHOPIFY INC (SHOP)
SHOP has been a beast and I think it is due for a huge correction. Keep an eye for a Head & Shoulders measured move breakdown to 633ish.
I have posted SHOP ideas on TradingView which can be found here https://www.tradingview.com/chart/SHOP/khIJUje2-SHOP-Elliot-Wave-Idea/ and here https://www.tradingview.com/chart/SHOP/nellgdwz-SHOP-Hyperwave/
INVESTOR CLASS IDEAS
The Investor Class opportunities remain pretty thin as I don’t have many meeting my Investor Class Criteria for this week.
I will post in the Telegram Channel as Trade Ideas develop and are identified during the week.
Here is the link: https://t.me/klarenbachresearch
REMEMBER, CASH IS A POSITION
Don’t FOMO into a position. Have a plan.
TSLA TESLA
From last week:
This past week we got into TSLA in the Telegram Channel above 822.50 with a stop below 785. I raised my stop which got hit at 879.71 for a 6.95% gain.
TSLA gapped up on Monday’s open and I did not chase. It had a bullish close on Friday and I will be looking to re-enter.
TSLA went to all-time highs and looks good.
After analysis of last week's price action the previous charts, I think this is a good time to manage open positions and assess whether this market is going up or down.
No Investor Class Ideas for this week.
SWING TRADE IDEAS
The market feels toppy to me and after last week's experiences, I am giving the market time to indicate it's direction.
There no new Swing Trade Ideas for this week. The Telegram Channel will be alerted to any new ideas as they are identified.
Here is the link: https://t.me/klarenbachresearch
GRPN GROUPON INC.
We exited GRPN on the 8th at 1.60 pre-split for a 25% gain.
ARX.TO ARC RESOURCES
ARX found resistance at the 200 DMA. We exited in the Telegram Channel at 5.42 for an 8.3% loss.
A good reminder not to buy below the 200 DMA.
CHRS COHERUS BIOSCIENCES INC.
CHRS did not trigger and is off of our watchlist.
That is all for now!
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