Stock Market Technical Analysis 8-2-19

Stock Market Technical Analysis 8-2-19



hi this is Randy Finney with right side of the chart and this is a closing market wrap for the week ending Friday August 2nd 2019 so the sleeping giant has finally woken up you know after weeks and weeks and weeks of extended loafing fact it was more than that as months forget the statistic it was in The Wall Street Journal lately that this period up until the recent breakdown here these wedges was the lowest consecutive period of days where the sp500 did not exceed a trading range of 1% in a single day up until this point this was up and told him then that was the record or I shouldn't say we didn't break that record but we did have an extended period of volatile low volatility and again that was all talked about that from those low periods of volatility once you get the catalyst which is almost always a technical breakdown then that's when volatility expands so yet another you know nice day did the downside and it's more so more importantly it's confirmation the sell signals you know they were a little bit suspect with the Fed the big move down on the Fed day then we had the back test and you know as I said in today's earlier video I did a midday market update earlier today and and stated to pretty much you know my views are certainly that Trump's tweet accelerated the selling but again the technicals had it we already had reverse there and then had those one-minute breakdowns that I had lighted yesterday and then the tweet game and that that it only helps speed things up to where we're going you know based on what the charts our posture how that charts are indicating and now today of course that's just additional confirmation you know tweets or anything today today was just pure raw market action in response to the recent breakdown so nothing more to say other than its confirmation of the you know the recent sell signals that we had to break down impulsive our back test with impulsive followed by impulsive selling we kissed my almost kissed at 185 70 remember it's a rough support so boom boom boom first target hit and on QQQ and on spy we had there's the breakdown a member of the site I brought this to my attention today they had a trendline they were tracking here off the low so I've added that it works well and said this at the time you know I added that trendline we were right there when I added it in today's earlier video and I said it needs to have a reaction to validate it because in my book any two points can be connected at random the two points I'm referring to of course are the lows from December 24th and then this reaction low right there and we did have a reaction off it so that helped to validate that level so there's a lot to to more a few things to point out today number one the breakdown back tests and now an additional move down a move below 294 the Bulls certainly had a chance to you know bounce and break that intraday and I mentioned this earlier and recover 294 at least close back on or above it and if so that would have been acceptable you know if you really back out all the bear stuff that went on let's just say in a vacuum as I always talk about you know back tests of a well watched level 294 again was not just you know a random level it was where do I have it right here think I have a board with that you know what let's just use this board let me take away this line because that's where I had us going down okay so 294 to reiterate or for those that are just coming in catching my analysis now for the first time in a while we had two major reaction highs in the SP 500 there a third failure right there after a failed breakout attempt and finally we broke out so this is the breakout range above the pretty much double top almost triple top high and now we failed it and what I was saying before it's quite usual and common to see a back test of a well watch breakout level not reverse exactly on that level to the button that would be almost too easy but to come down below and then go now we could still do that Monday anything can happen that's why today's Friday they parked it right below there to keep everybody guessing but if you want to take things on face value now if the again if this is undone next week we rally up and as I believe I said in yesterday's video and I certainly or today's video one of the two are both the only thing right now that would change my you know intermediate to near-term bearish outlook in other words I see more downside in the coming days two weeks you know counter-trend rallies aside but the only thing that would change that we'd have to take out undo all these these candles especially the last few days here these three red candles after the breakdown that would certainly call the bearish snare into question but as of now again if you want to take it on things for what they are on face value that's it breakdown backtest impulsive rejection then a break of support and that's like I said the nature of a rally I'd like to assess those I'm sorry a rally or a correction I like to assess them as they come and if we go smashing through key support levels with very little if any reaction then then that's a tells you the nature now we did have a reaction right there you can see off to 94 that yesterday's candle but again we're went down through it today so keep it simple than tolling unless you know we recover that you know any kickback rallies at this point should be used as or considered shorting ups we've gone from a buy the dips to sell the rips market IWM I can't rock off I covered in last night's market recap but what's going on IWM is also a failed breakout so far just like on SP 500 you know that was the point I was trying to make that drop below 294 gives us what we call a bull trap because the breakout to new highs failed and it wasn't just an all-time high breakout above a previous reaction high again it was a breakout of at least three failed attempts to get over that level we've come back through it so the breakout above at this point in time and tell unless it's recovered again is it has to be viewed as what we call a bear trap I'm sorry a bull trap Bulls go long buying the breakout to new highs and then once that breakout fails they're trapped in there and one out in the bad way usually all right so there's a downtrend line on IWM I wanted to point out we had this minor uptrend line to form this triangle pattern and we broke out there the other day fed induced had a little pop again right into that 159 41 resistance a very important well-defined resistance level and failed so more importantly or similar to SB y if you will this whole this whole recent fed induce breakout around there above the downtrend line right there is is certainly a failed breakout and that is the nature of a failed breakout or bull trap is that once it's become clear that the breakout has failed you usually see the impulsive selling and it's a combination of two things it's the the bonds that took the breakout and never now realized they're locked out that they were wrong that the breakout failed and it's also the shorts that come in like sharks that smell blood in the water they see a failed breakout so they pile in as well work to be done we hit some support levels today let's let's go in zero down on how you know give you like I did yesterday some trading tips how to trade today you know profitably how to make sure you're with your weren't short you got in short if you wanted to actively trade there was an opportunity there as well to cover some shorts and go long at the lows so let's take a look at that okay we're gonna start out on this is a homepage or right side of the chart calm and here's the analysis that was posted as of this morning on the market first post was this morning about 1044 8 well at 10:44 a.m. spying QQQ coming up on support so what I did is the first charts above here I pointed out that this was posted yesterday morning let's see what time that was down lower left-hand corner around the same time a little after the market open and I gave these scenarios with my preferred scenario like usual and yellow saying if we break about there this was all covered in last night's video and so this would be these are the levels of watch in other words reaction points there those are key levels break under the the recent lows would open the door for a move down here to my next target at 290 14 on spy and that's that was again posted this morning let's take a look at where it is or what happened that was a 60 minute chart so I flipped over here to a 60 minute time frame and there it was just a hair above 290 14 and I'm gonna get to in a minute you know that we reversed there for a reason we had actually support on ES and I talked about that very often that's why I don't just post charts on the index ETFs or I don't just post charts on the future trade both but when you're trading I like to look at both spy and QQQ when I'm trading the large gaps and as well as ES and NQ and if let's say for example like today they're all falling to down to so comparable support levels it's that first of of the levels that get hit that may produce a reaction so I'm going to get to that in just a second so keep in mind so that was you know close enough a quarter point or so within that 290 14 target again that was by that's that real-time chart as of the close right there the this was earlier today posted spies coming up on the 290 14 is target we're reverse off the initial tag is likely went on to post QQQ this was posted yesterday morning that's Thursday morning showing us coming down here and you can see the additional support levels there and and today there it is Q took out that 188 37 level you can see a little reaction around there and was coming down to that 185 50 ish level where you know look like a bounce was was likely so then shortly after that again those were just the index ETFs I posted it 11 o'clock that the index futures were approaching support and on these charts again the same ones that I posted yesterday morning Thursday morning showing NQ and the key levels to watch on NQ and where we're likely to reverse at downtrend line there and then this morning about 11 o'clock said NQ is coming up on the 76227 I went on also to post the es charts again from yesterday showing us going down to 4 to 14 support right there this was today so at that same point time and this is I'm going with all that there were four 60-minute charts I just showed you and put out earlier today QQQ SP y es which are the futures for the S&P 500 and NQ of all for three of the four we're getting very close to key support levels where I expected a reversal but one had already hit and that's a yes and yes hit 214 you can pull one-minute chart we've stayed there almost all day trading on 214 in fact we almost clue you know we closed just a little bit above that level so that's where you know as an active trader I said I reverse covered shorts reversal longed for a bounce the bounce it came wasn't much but it was certainly you know chance to book some profits right off the lows because again if you're watching trading even if you don't trade yes like today I didn't have any positions in the u.s. coming into the day or afterwards I traded straightening NQ and some rty today but again if one hits support and you're looking to cover in Reverse around that level and others are just shy of it you might as well cover because what's what are you going to try to milk out that extra you know two tenths or one tenths of a percent for the other ones to come when the first of those could reverse if you know if more ES traders are watching and they step in here which they did today at two four 2914 they're gonna lift the other indexes when they start buying that buying will carry over into you know the nasdaq-100 which has many of the same stocks especially a top way to components so that was that and let's look at I already covered that one so this is the updated chart and through the close here so you can see su min a little tighter there so you can see that you know this is a spy' hit that 214 level almost to the button and again if you look at a one-minute chart it traded hit it several times traded above it and you know a decent decent bounce definitely a tradable bounce for active trade there's a day trade bounce and then you know for me back into the end of the day here short you know came in that bounce and I'll go home short over the weekend with a mild short exposure it is a weekend I'm not nothing big right now let's look at NQ real quick for you NQ again there's at 76 22 support but you have some minor support here and the fact that es hit and held support is why the markets held up and on QQQ I showed you spy reversing just shy there and the midday update video today or follow-up post you know I had the one 8550 target but then I also added because there's those support levels I just showed you on NQ you can see a lot of candles right here from back on when was that that was around the 28th that was also minor support there about 186 that's more of a support zone and so again I'm talking a little reaction here that's all if you want to trade a quick bounce but I made this clear too earlier today when we fell to those levels what I you know posted to members is you know the takeaway from all this is look we could have broken those levels we did we get type of you know you know another flush down to the next targets if we broke them and it wasn't just a brief spike below that is certainly possible but number one it usually you don't get that waterfall type selling after coming off you know all-time highs you know you get this and as I pointed out in the video earlier today usually what comes after the initial leg down is the dip buyer step in tried to grab a circle tool there and you get a kickback it doesn't look like much but it was a pretty decent snapback rally there you could see it in the sp500 as well you know you always get these you know after the initial thrust down a little snapback rally and more importantly we also hit this trendline on spy so you have pretty significant support levels the markets are in the very near term oversold not in the long term this is the RSI on the daily chart not even close to being oversold near-term I'm talking about the intraday charts so again that that was you know what I had said earlier that at the very least it's not objective if you haven't shorted yet or if you were looking to add on you don't add to shorts when we're over near-term oversold and that support if anything else you look for you know you wait for a bounce to very short if you're not a very active trader and you don't want to gain the bounces and now at this point the next signal comes our sell signal comes if if and when we break today's lows in ES and remember as I showed you there's a little support just below and q and q QQ and spy as well so this is these are neck cell signals so if you know if I had to guess it would just be a wild guess I'd say we bounced Monday and then sometime next week break down and continue lower and now to give us a more powerful cell signal and then head on down to some of the next targets here either way you know I always say this to everyone you needed to define your time frame and your trading style and more importantly where you think the markets going if you believe that these are pretty powerful you know divergences sell signals everything else that's been covered lately and that we are going considerably lower another 5% or more then you know and you're not an active trader then you might want to just ride out any counter trend bounces and set your stops somewhere you know above where ever you entered or if you want to short you haven't shorted yet you know wait for either bounce back into resistance or a break down below like I said you know a break below today's lows could come on a gap on Monday it could come on a gap down we could gap up again I don't know it's a crapshoot what happens over the weekend but so that's that's very near-term stuff when the markets start trading next week you know when the futures open Monday morning even before the markets open I'll have a good idea I'll be able to see where the futures are look at levels see what's going on and then we might um you know have a better gauge where we're gonna go but as of now like I said you know where we go Monday's crapshoot coin toss almost and but where we go over the next week or two based on what's happened here especially over the next several weeks I would say pretty most likely to the downside again with the next sell signal to come on the break of this uptrend line here and and solidly below today's lows okay guys we'll wrap the video up with xlk since I didn't mention that but that to me is a big no factor in my analysis because like I say Tech is the market its largest sector there's the previous highest maple major reaction eyes in the market so tech broke out just like the broad market and everything else did here recently and it's come back in and it's now down below at this point again if I in a vacuum if I wasn't paying attention these divergences and the low volume cells signals and everything that I've covered recently if you miss those about a week or so ago I showed you levels where the average volume falls a certain point on the indexes and that's where I'll quite often you get the big Corrections if it weren't for all that in a vacuum I wouldn't in a and I didn't see the breakdown here either I would say you know what right now this may just be and it may prove to be just a backtest of the breakout sometimes you come a little below and get a momentum fueled overshoot look we closed at seventy nine oh five that previous that that breakout point was around seventy nine fifty two and it's not even as well-defined as as as the one in this would be five hundred I can say there's also resistance up here at about eighty twenty nine so looking at tech and i zoom in it's these candles right here quite a few in the bottom of that body of that candle right there so I'd say about 80 30 to keep this the near-term bearish outlook pretty healthy and intact ideally I want to see xlk remain on a closing basis at least I don't care intraday if it pops up above it closes I want to see it close on or below remain a blow below that 80 30 ish level and again that's just one sector so that will go into my analysis that's not a be all and all meaning green light go long above this level red light short no it's not that simple but it is a definitely a factor into my analysis and again if we just continue lower next week it's only going to seal the deal you know solidify if you will the bearish developments lately the breakdown back tests and then the follow-through is selling today confirm divergence everything I've talked about in recent weeks you know bearish PPO crossover on the indexes X okay and everything else so that's it and soon if next week early next week we you know we continue to firm up this bearish case if this all wasn't just a whipsaw signal and we jump back up next week if that's the case meaning the you know the charts remain bearish I'll start again zooming out focusing on the longer term the weekly charts try to paint the bigger picture just how far this thing may go just how long you know swing trader might want to stay short again so like I said a little bit of work to be done because we're for all intents and purposes we were a little below but we're essentially still back testing these recent breakouts on the market sp500 Nasdaq Tech and all that so the further we go only increases the odds that that break down today below the other size will stick alright this has been Randy Finney with right side of the chart have a great weekend

19 thoughts on “Stock Market Technical Analysis 8-2-19”

  1. Thanks for your work and analysis.  I was looking for a bounce today because the spx closed outside Bollinger bands and 'normally' gets backs in —— obviously it bounced but not significantly enough to get back inside the Bollinger bands.  At least it kept me from trading the big down at first.

  2. Don't be to sure of your positioning Randy. This bull market has legs and remember all we have to do is recapture the 294.50 level on spy and it will be back up from there. A 5% pull back seems steep as of lately but only because the market has been slowly grinding up. This was a healthy haircut which will only help the bulls. Too many people think we are going down. Great analysis as usual though.

  3. Thanks Randy keep up the great work! It's really awesome getting other's perspective on the market. I like your down to earth, humble level-headed analysis that undoubtedly comes from MANY years of experience. Cheers!

  4. Gold and silver and the miners have been the best performers the past two months and only just starting. Shorts have the best ahead of them…..patience and discipline. Long scalpers can only pick up pennies and run….short swing traders can ride it longer and bag the goodies. Those rude and sorry individuals who have been mocking Randy are the real losers….how you behave in this life affects everything in your own.

  5. Great videos as always! I have been watching for awhile and I like to mix TA and politics with my view on the market because TA gives great indicators of support levels from political events. I agree with where you think the market is going but time will tell, it doesn't have to happen next week.

    I would say that the market drop from the fed rate cut decision was a predicted reaction but the things that were unexpected and worse was Powell's hawkish stance on no more rate cuts this year. Overall, Trump's inability to make a deal with China is making the selling a lot more impulsive in my opinion due to people feeling more uncertain if Trump will make a deal before the elections without being too irrational. China is possibly devaluing their currency which previously caused huge selloffs in SPY every time Trump gives a negative tweet toward China. Im excited for this next months volatility and hopefully the Fed doesnt have another emergency meeting in August like in 2007 or else I'm gonna be more bearish than most people call you Randy lol.

    TLT is my safe bet: more volatility = more uncertainty on strength of the market and rate cuts = more people thinking recession is getting closer = more bonds being bought for high yield = TLT going up until the next fed decision.

  6. Fascinating time. Geez the European markets got hammered as well. The Fed must be getting nervous 😟 Looking at a second interest rate cut ASAP.

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