Stock Market Analysis 7-26-19

Stock Market Analysis 7-26-19

hi this is Randy Finney with right side of the chart and this is a closing market wrap for the week ending Friday July 26 2019 so as we head into the weekend some things to look for next week you know not really a lot of anything new or important to report they you know the current uptrend continues without any sell signals or signs of a reversal the trend yet however there are some things I want to point out that I am pointed out recently first of all it's today let's look at the volume this is the spy the sp5 under tracking ETF and you can see the volume bars down on the bottom you should be able to make those out if not you need a probably a higher resolution monitor but there the gray bars here I have them I have them turned down a little bit I don't like busy charts that have too much bright colors to take away but right here I'm gonna put a crosshair you know what I'll put a horizontal line on where today's volume bar was and when you go across now you look there it is right here no way there it is you can see that we are at or below the lowest volume of the year so far very most I see one one day back here but either way you know splitting hairs whether it's the lowest day or you know a little bit lower some of the lowest volume what does that mean well it's it's always a sign of non-confirmation of rally not always but usually and now let's let's look at a chart here's something I've shared in the past I this is a for years I've used this I'll use a sometimes I'll play around with a number but I'll put a 10 10 day or yeah 10 period or ten day exponential moving average on volume and that's what you see down here so more so than the volume bars themselves because one day doesn't mean oh gosh we had a low volume day and markets and it went up that means it's non-confirmation the markets gonna drop no what I look is for persistently low and extreme low volumes and that's where the 10-day EMA helps smooth it out so you look at this line here and so when we go back here's all the way back to the beginning in January 2018 and you can see that it's not a perfect indicator but when the volume approaches I put a red line doesn't matter where that level it's just kind of arbitrary because at different points in time in the market volume levels than Norm's and the highs and the lows are different so this is just showing for the past couple years here what we're looking at and you can see that when you see this declining volume down here and you get close to or at that red line very often that's where you get the big drops it means a markets rising on declining and very low volume it's a sign of non-confirmation buyers are drying up so it's simply saying and you can see here again we hit it a couple times right there we had to pull back the first time a bigger pull back the second time and then we started rising remember this also came on the heels of a pretty big correction so it's when you get to that top so again it is not and I'll be very clear when you look at this not a buy insult or sell signal every time you hit that red line but it is a hey something's not right as rally is just lifting up on drying up volume there's really no conviction and then boom that that was as you can see volume picks up on the sell offs and there was a big drop we had in the fourth quarter we didn't hit that red line again remember the last time we hit it back here in 2018 was before that 20-something percent drop in the markets worst correction that we've had since the bull market started and then we hit it most recently again right here and that was the biggest drop so far biggest correction in 2019 so we touched it kissed it recently and now we're well below that line so this is to me it's just another of many red flags and look you can waive these red flags all day long they usually do play out it's just they're not timing indicators they just say hey something's wrong you know markets at new time highs but nobody's buying it there's not a lot of conviction behind shorts have given up but the buyers just aren't showing up either and so that's what I want to show you there QQQ you have a few more whip saw signals on that my volume indicator here again you can replicate this and put up a different EMA s kind of find where where that line hits but you can see for the most part it does a pretty good job and again at least warning heads up you know super low volume boom drop low volume again boom we got a correction we had you know kept hitting that kept correcting every time we hit that line there was another correction this one marked the top so we had this these persistent you know a steady advance on persistently low volume that finally led to the 20-something percent drop in to the December lows we did touch a line here didn't it you know got a little correction not much but there was we went below it right here you can see for the first time actually cross below it actually that was the first time ever and boom then we had the biggest correction in 2019 and now we are clearly below that line so that just tells me hey that's not really a healthy rally it's not what you want to see not many people wanting to buy these new highs but it you know it seems whatever the reason is just take it for what it's worth I just thought I'd share that with you the same old same old these market updates are getting old but I told you I'd do one today markets were up near QQQ you know a little stronger let's talk about earnings real quick well we'll get to that so there it is same nothing has changed technically we're still above the breakout point you know the most recent breakout above these highs are around 190 150 back tested at once we're moving higher again on very low volume with clear negative divergence is still very much intact at this point in time on both QQQ and spy spy there's a little uptrend line I've added here you can watch for a potential cell signal especially if it breaks on volume and then the targets obviously still that 294 level that was our big breakout point in spy where we had a you know double top highs right there and then finally took it out here and again this move has just been on declining and diminishing volume so while that's not a sell signal it's a you know be careful because that's often when the big drops come when you hit those lows you know have advances on low drops so we get a cell signal soon I'll do an update otherwise if nothing big happens on Monday I'll I'll probably go back back to doing you know maybe buy or try weekly updates you know two three updates a week on the broad market I'm still focused on individual trading ops members I just put out a long video covering probably two dozen good two dozen different trade ideas individual stock sectors both long and shorts that was just published on the site you should have that now so there's a little I'm not reading material that did that in video format so you can watch that over the weekend all right let's look at some of those earnings that we had last night all right so where do we want to start down here on the bottom all right so as I mentioned as I said last night you you don't want to jump the gun on a position when they have a big move in after-hours trading especially not the initial reaction because as I said earnings consist really the three parts I view it as the initial earnings report you know whether what the company reported as earnings or losses and all their you know financial data for the quarter then it's followed usually by the conference call and then then that can change things drastically that's where the company will then you know forget about cares what we earned but that's dig down into those numbers and let's you know some companies not all but most will give you for guidance what they expect going forward so I think for you know Intel traders it was a lesson learned now you can see I'll just go through the from the top to bottom here's Starbucks there's their earnings yesterday boom they popped up there's our overnight highs traded flat from there and then so the by the way guys the dark gray right here is the regular session so that was the day before yesterday overnight session the dotted line is you know the overnight a day breaker you know when we roll in so this is pre market here post market yesterday and then today's trading so Starbucks built on their games alphabet you know popped up and pretty much closed right about it yet last night's highs but it still held those gains so that's about almost a 10% gain on alphabet Intel was the one that played that game we had over a 10 percent reversal there's the after-hours pop huge gain over 10 percent 110 or 100 percent plus of that game faded so this is why again you don't want to react to the initial reaction you know if that was in the regular session you would have seen until enter that huge gap I talked about I think it was from April big earnings induced gap a massive gap I covered Intel recently on the site as a you know covering the semiconductor sector and the opponents there and I showed that Intel was had rallied into major resistance and was at the bottom of that big gap resistance a huge gap in that so what happened is when you look at the chart I'll go over to that chart in a second today we open there popped into the gap and then failed it so that is a false breakout you know bottom of it especially a big gap is a significant resistance level Intel couldn't hold it and then boom they faded it you can see a lot of the fade came after the the market opened today so again this is just an example why I said let the dust settle why take a position and just before earnings or right after you know jumping on the initial pop or drop because just as often I'll see these big drops get reversed so that's it Amazon you know which again is the largest component out of all those that reported last night and QQQ you know they had they sold off pretty big recovered some of that but they still closed down today Amazon closed down one point five six percent I think you can see it there and that's that so overall there was enough you know these and some other stocks lifted the indexes we had a pretty pretty decent fade after hours and QQQ right there you know right before right after the market closed doesn't show very well here but they still the queues closed up and then the Nasdaq futures only closed down here I'll show you here I can zoom over to another chart on this monitor here mmm go right here and you can see this is the big after-hours drop and NQ so we'll see to be continued next week and again not anything you know market was up today just like it was down a few days ago and neither of those had any technical significance to me and so here's Intel you know if I had to bet on any of those companies going into earnings last night yesterday that would be down instead of up it would have been Intel you know Google had a somewhat constructive chart it was in an uptrend well above trend line whereas Intel was overbought and this is what I covered in the recent video of members we were overbought right there overbought and that was right here for this big drop in overbought so this is the most overbought we have been since that point in time and again it's just saw probabilities and statistics overbought I always say this overbought can and often does become more overbought like it did here you got overbought at this point you kept getting over Bob but eventually all it's saying is look it's not objective the risk reward is not long no longer favorable especially you know this is a stock that already topped like a lot of others out there at a big double top here something impulsive reversal right there and then again reached not just overbought but an extreme overbought reading while it ran into resistance to that at the same time so the fact that hit resistance itself is embarrassed because what happens and what may happen here maybe consolidates now and then comes out here and it builds up the energy and works off these overbought conditions I like stocks that are pushing up against resistance once they've consolidated and they're not so overbought or they don't have negative divergence or anything like that then that I'm looking for a breakout for a long side this one could still do that but I just wanted to say you can see right there the big red candle to pop into the gap there's that huge gap I'm talking about and there's a rejection so again if nothing else look I didn't have a position I'm not a gambler you know I take calculated risks so you know I figured Intel of all of them would probably end up to the downside but again it's not an actionable trade from here it could be I mention that on the site today we'll have to watch a semi I have a lot of momentum to the upside no cell signals on the sector yet but this is the industry leader and that's why I'm talking about this one the largest semiconductor stock in the world and you can see that you know I look at it this way wait to see how it opens on Monday because you know when markets are closed now anyways but there's a failure resistance so you could have shorted today at 53 or waited to the failure once we popped into the gap and maybe on Monday they give you another chance and look like any trade it works out or not but you take calculated risk so if you short with a stop a little bit above not at 5308 or 5309 but somewhat above whatever your number is depending on what you're targeting for a pullback trade quite possibly more you know I've shared my analysis on Intel several times going all the way back here to 2017 I was following this bearish rising wedge saying no sell signals but when you break this wedge you're gonna Intel was gonna drop 24 to eventually 32% I said that just before drop posted this chart it dropped it went up 2% from there then broke down gave me that sell signal hit my first target to the penny right here and that was a 26 percent drop bounced up put another divergent I said next sell signal here on this break of this trendline boom there it is hit Mike that same 4259 target support again it keeps tapping on it so my guess come down to it again the next time we get there at best we have a minor reaction and then go through it and it worse we just going right on through and then ultimately hit my my final downside target here for Intel of 3827 which from today's eyes would be about a you know 28% drop or so in these this is what tells me that's gonna happen still you know it told me back here these divergences the divergent high to clean trendline the breakdown and now we have you know this uptrend line here that I'll track now look we can keep walking up and up and up and up that trendline maybe we go on a burn through the divergences but the break solid weekly closed just like we had right back here there's your red weekly candle clear as day can't miss it on mistakable sell signal and boom there as well right through there close the week down with a big red camp bearish engulfing candle and so that's what I'll be looking for here whether it happens next week next month or you know three months from now or never it happens never I don't take a position I'm not short so that's one to watch and if intel rolls over the semies are probably going down and the semies are the canary in the coalmine for the tech sector and tech of course is the largest sector in the entire stock market both in the S&P 500 as well as the nasdaq 100 so there it is there's a stock in an uptrend make no mistakes about it I'm talking a bearish talk on it but I'm that there's not any sell signals now like I said there is an objective but somewhat aggressive entry on a you know short below that gap with a stop not too far in it nothing ventured nothing gained you could stop doubt four to three percent loss you move on to the next one or maybe it goes on to break down and and play out that way so that's what I'll be watching and it kind of all plays into the market I know you might be wondering where I'm going with talking about Intel book it again Intel breaks Emmys breaks Emmys break tech breaks tech breaks and market breaks that's simple and then on that note to wrap it up well when does tech break next right here there's the uptrend line that I have there's our divergent hi big divergence break of that would trigger the next sell signal in tech which in turn would trigger the next sell signal on the market just like we had a clean break down there saying the same thing for a long time no sell signals though yet it's coming when tech breaks and market breaks to virgin high we had divergent I here kept a virgin kept diverging and then boom it broke and that was a I don't know maybe 30 percent drop in X okay they're just like you had a divergent high here and a drop divergent high here and a drop and there and right here so just wait and patiently guys but until then better fish to fry elsewhere than the broad market but again keep an eye on it because you never know when when you get those sell signals they can come out of blue when least expected so as of now trend is up if you're long congratulations to you and good luck to you going forward the trend is currently you know bullish right now but we'll watch for a sell signal what again would that look like not a limp down through there a big red impulsive candle the redder the better I like to say I know that's a little bit of slang but that's what I like to use the red or the better that's not red at all but that's close to being red something like that but bearish and golfing if you got that that wipes out you know week couple weeks of trading all the better so until we get it let's just sit tight and I'll continue these updates and you know it's frequently as needed and that's about it all right guys have a great weekend this has been Randy Finney with right side of the chart hope you enjoyed it

20 thoughts on “Stock Market Analysis 7-26-19”

  1. this video is a joke. why do you pick on INTC ?? why dont you short txn and ter as well ??
    you are not fair to INTC, i would be careful shorting it, you may lose. Stephen

  2. Randy has been saying “Technically nothing has changed” for weeks now? Being bearish the time is costly and you miss lot of opportunities.

  3. Your 10 Emma for volume shows that the rally should continue with huge gains as in the past which means lot of people are/will miss the rally. This is how market is designed. . Am I missing something here? Why u missing point that $SPX rallied significantly from the lows giving $SPX calls 800%. Missing lot of opportunities?

  4. I said a couple of weeks ago the top for now looks like 3030. I sold all my positions. May go short some time next week

  5. Randy, I told my wife I changed your name to Beary. Get it Bear-y…. haha. Anyways, I like how you chart. Would you do me a favor and fix your uptrend line for June 2019 and make it the same length as the uptrend from Jan 2019 to May 2019. Ok, thanks.

  6. Too many people waiting for market to drop this is why it will not.
    For short sellers it is very difficult time but it will change as soon all shorts will close.

  7. Lol randy shitting on people’s monitors at the beginning 🤡😂🤣

    Keep up the great work! Thanks as always!

  8. Next week will be huge. The first 25 BPS in quite some time is almost a given based on Fed Funds futures so we’ll just have to see how the market reacts. Any blow off top scenario especially on low volume would more or less be a gift. Until then it doesn’t make sense to play the broad market l, as mentioned there are plenty of beaten down oversold sectors both US and emerging that look far more attractive. Thanks for the updates as always, Randy. Wishing you a good weekend.

  9. Everyone is waiting for the FED.

    I agree about the big drops, which is the only reason I have gone with individual stocks and metals over ETFs.

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