The popular weekly Saturday show is broadcast on YouTube every Saturday night to over 25,000 subscribers of the Stock Trading Master channel. Each week, technical analysis is done on many different charts in order to predict what markets will do 5 days (1 week) in the future.
The top performing stocks that are in the GuerillaStockTrading portfolio for Premium members are also shown.
Hello my fellow stock trading masters, this is Lance Jepsen with GuerillaStockTrading.com
What an awesome week of trading last week guys. Right on! If you’re following the action in IQ then you know exactly what’s going on. Premium members, you know what’s going on in IQ. Absolutely awesome.
Now one thing I wanted to remind premium members is that when you go to enter, so you’re currently looking on your screen at SPY and this is a daily chart and this is in the one minute timeframe. Keep in mind that typically when markets open, we get this upward move. Okay, not, not always on SPY, but whether you’re trading small caps, mid caps, there’s a propensity for a stock to do well right when the market opens. That’s when the action takes place. That’s when things really move and so looking at SPY on Friday, you can see that here. You can see that, you know gap up open, pulls back a little bit, but boom, but right around I’d say about 10 AM Eastern time is when the volatility generally starts to dry up. So you have these big volume, big moves, at first and then about 10 AM Eastern time the market starts to dry up and often you get a pullback. So just keep that in mind when you’re going for your entries. It’s generally not a good time to go long anything, in terms of a swing trade, in the first, I would say what is that, like an hour and 30 minutes of trading? Maybe an hour of trading, you know. But because what happens is that you go long something in that first hour and then after 10 AM when the market generally tends to slow down, the volume dries up, it often pulls back as we can see what happened here on Friday. Now you’re suddenly down in your swing trade long and now you’re in, in a position of hoping that it’s going to come back. Instead you want to try to enter your longs at the low of the day, okay. That should be your goal. Try to get in at the low of the day, so obviously buying in that first hour and 30 minutes is generally not a good thing to do. A market could gap down open and you could start out down really big and then it lifts from there. So you know the world doesn’t always work that that way, but most often than not it does and then you could see the market tends to kind of chop out and go sideways as we go into the lunch hour of trading and then as the day wears on, and we get into the after lunch hours then you start to see the volume pick up again. Okay, so I I would say probably you know power hour right here at about 15:00 that’s where you know the market really, the volume tends to pick back up again and it’s kind of like a dip or rip type thing where you get into that power hour and it it’s in, in some ways it’s sort of like that first hour and 30 minutes of of trading. But just keep those cycles in mind when you’re taking your entries.
No institutional buying or selling was detected on the tick last week.
New York Stock Exchange percent of stocks above the 50 day moving average is at 69.49%, that favors the bulls.
The New York Stock Exchange percent of stocks above the 200 day moving average is at 60.6%, that favors the bulls.
Transports are still in the upper end of this sideways trading channel. Until we get a break above 66, no signal.
The S&P 500 two-minute chart, look at that folks, very, very, nice price action and look at the volume into that close and while the stock market went up. You typically don’t see a lot of these moves like that on a Friday with such a strong close. Like you would expect the market to dump right on a Friday, as traders did not want to stay long over the weekend new cycle, you don’t have that. In fact, look at the force index in that last power hour of trading. I mean look at that kaboom! Very nice close folks. So when the market opened you had this resistance level here where the market came back, tested at multiple times, little bit hard to get a read on this market. It was a little bit you know, erratic and kinda choppy during the first opening volley of trade. You’ve got this little bit of a channel here that was like, okay breakout, and it came up. You had a consolidation channel right in here, then it broke back down retested this previous low in here, rocketed off it, came back up triple top fell down again, but notice that we got the eight period moving average crossing above the 23 period moving average, the red line, the blue line crossing above the red line here. So that was bullish. Came back up, breakout for a second, headfake, back down, came down to this level right here which really doesn’t correspond to a lot, but then it turned and so here we finally had a pullback. I mean we had an inkling of a pullback here with this higher low being put in. Went up, headfake, came back down, oh kinda tested that same level, boom, now that level held, and we rose off of it. So now we have start of this uptrend channel. So then we got a breakout above the previous day’s close, broke above this previous swing high bam, and now it’s like, okay where’s this thing gonna go? We don’t have we’re, we’re out of pattern because it’s transitioning. And then right into the last few hours of trading, we kinda got this nice uptrend channel forming so very nice folks. Clearly the two-minute chart on the S&P 500 favors the bulls.
The one hour chart on the S&P 500, you’ve got the 13 moving average crossing above the 30 period moving average and this period is one hour so it’s the 13 hour crossing above the 30 hour moving average and that’s really our buy signal. That’s what we like to see and that signal has held folks ever sense that May 31 signal. Very nice uptrend channel that we’re currently in on the 60 minute chart. We’ve got the CTM in our bullish uptrend color band. The MACD looks like it’s rounding up, although it’s still negative, but clearly the 60 minute chart on the S&P 500 favors the bulls.
The S&P 500 daily chart, so we had this sideways consolidation in here that I’ve talked about in the last two Saturday shows. This last week we got a break above the upper wall of the consolidation zone and that was very beautiful because this upper wall whenever you have a sideways consolidation pattern it’s awesome folks and you may like an uptrend better and I totally get that. But when you have a sideways consolidation pattern like this what do you have? You have a very beautiful resistance zone that forms and you have a very beautiful support zone that forms and now you can mark these levels and trade them because you know that they’re significant support and resistance’s because they’ve been tested multiple times and that’s what a sideways consolidation channel gives you. So when we had the breakout on Monday, that was very awesome. We had the Parabolic SAR buy signal and you can see this market’s never looked back. Now ultimately, I think at some point, once we get the breakout, so, so here’s the breakout, that’s a bullish breakout. At some point we’re, I, I would like to see the market come back, you know and test so that previous resistance become support, and then we get the next move off of it. Ultimately, that’s what I’d like to see this market do. On the TSI, the green line is widening from the red line clearly bullish. The ADX line, we had a cross right as we were coming up to test that upper consolidation channel resistance level that we talked about in last Saturday show, we got the breakout the ADX green line really moved above the red line here which is a bullish signal and look at what we’ve got folks. We have the ADX rising, so now we’re transitioning from a trading market since pretty much all of May, we were in this trading market and now it looks like we’re transitioning into a trending market and that’s what the market does, a market goes back and forth between trading cycles and trending cycles back and forth. Another way to think of that is range contraction and range expansion. So if you would look at Bollinger Bands you would see that very easily. So range contraction right, is a trading market. Range expansion is a trending market and it goes back and forth. In fact, let me see if I could overlay the Bollinger Bands to let you see what I’m talking about.
Alright, so here’s the Bollinger Bands on the S&P 500 and you can see that now we’re going into a trending market. So the white ADX line down here is rising so we’re going into a trending market and you can see that because look at the Bollinger Bands their now widening. So it’s up to you which way you like to look at that, whether you play the Bollinger Bands, whether you look at it as a trending market versus a trading market, whether you look at it as range contraction versus range expansion, they’re all saying the same thing. In any event, the daily chart on the S&P 500 favors the bulls.
The S&P 100 to our equity put call ratio, look at the equity put call ratio! Massive move down over this last week that favors the bulls.
QQQ testing Parabolic SAR support, but clearly I mean, you know we, we, we had the exact same thing through here we had a sideways consolidation pattern and then a breakout, boom! This chart favors the bulls.
The Russell 2000 so bullish folks. PPO looks bullish. The ADX line, you can see that the ADX started to rise on the Russell 2000 before the other major indices, it happened back about mid-May and look at that, I mean very, very, nice folks. This chart favors the bulls.
The US home construction ETF ITB, look at that monster move folks. It’s retaken its 200 day moving average. Huge buy side candle, short-term just looking at this going into next week, I think you have to say that this chart favors the bulls. The reason is that short-term we’re looking at this like trend channel here. Okay, so even if we kinda fall back, test this lower wall, right, and then we take the next leg off of it here, I mean we could sit there and bang around and stay within this uptrend channel. It’s already retaken its 200 day moving average line. So very nice. Unless this gets cracked, this uptrend channel wall, I think you have to say short-term, long-term this is just a giant sideways pattern right, so you would say well, long term I’m not gonna say that this favors the bulls yet, maybe until we clear this resistance level here, but we’re just trying to guess the market action for trading for the next five days, trading for the next week only, so I think while we’re in this uptrend channel, just going over the next five days short-term, you have to say this chart favors the bulls.
SOXX, a little troubling. I mean, so bullish and then on Friday we got this Parabolic SAR sell signal. Um, I mean I’m not a strict Parabolic SAR sell signal guy, you know, I mean I do know that a lot of the signals turn out to be fake on the SAR, but in this case this is very ominous because you know, here’s, here’s the sell signal, and the, what, what’s going on is that the trade war with China. So we sell, our semiconductors sell so many chips to China that depending upon how all this trade talk works out and counter tariffs that are put against our country, it could really put our chips in jeopardy and this is one of the reasons why Micron is no longer my ATM stock right? My ATM stock is a stock that’s uptrending, very big company, very powerful liquid, you can trade in and out of it very easily, and you can just sit there and every time it pulls back, you can buy the dip and it goes back up again and it’s like an ATM. Just keeping ringing that thing. You buy the dip. You sell the rip. Well Micron stopped being our ATM stock because of all this in here, this absolute broke things down. I lost money on trying to trade Micron and it just never worked out after that, and this was all the drama with the Chinese and the escalation of a trade war. So when that starts to come back, as we saw on Friday, and a lot of trade war and tit for tat tariffs and Macron now fighting with Trump you know and the globalists banding together, you see this move down here and a Parabolic SAR sell signal. After this incredible run-up, I would be very leery of buying SOXX up in here. Now the candlestick on Friday is not a typically bearish one. You know if it’s a big red candle fine. That’s not a real ominous candle there so I would like more confirmation maybe one more day Parabolic SAR signal here, and then we get maybe a like a red candle in here and that would definitely give me more confidence that okay SOXX is gonna go lower. So for now I have to say no signal, but it certainly does not favor the bulls guys.
NASDAQ advance declines in a strong uptrend, favors the bulls.
S&P advance decline percent chart in a strong uptrend, favors the bulls.
XLF, at least it’s retaken its 50 day moving average. The PPO is positive but until we clear I’m gonna say this 2850 level, this chart does not favor either the bulls or the bears.
S&P retail ETF, incredible how well this things doing. We have a breakout. Very bullish. It continues to be bullish as we talked about in last Saturday’s show. I wouldn’t want to be chasing retail in here, but in terms of whether or not it confirms a bullish S&P 500, it does confirm a bullish S&P 500.
The 10 year U.S. Treasury yield going sideways after the previous week’s big drop on Italy drama, no signal.
For the week, money came out of bonds and it went into stocks that favors the bulls.
Looking at biotech’s as our leading indicator for a risk or risk off market, I clearly think that you have to say that this favors the bulls. I mean this is a pretty awesome looking chart. You had a double bottom put in back in here. This kinda sideways pattern banging up against the 200 day moving average talked about in last Saturday’s show, the break above the 200 day moving average. There’s very little resistance up here folks and look at the CMF, that’s beautiful rising money flow. So this suggests a risk on market which favors the bulls.
And it’s not a real shocker that our markets did so well last week because we won in the global currency wars. The US was able to devalue its currency more than any of the other major trading partner, that favors the bulls.
This is a, a bit problematic. We have a negative divergence between the S&P 500 and the NYAD. So you can see that for the last week, the S&P 500 clearly is up, while the NYAD is clearly down. That negative divergence gives three points to the bears.
The Russell 2000 is way above its pivot level. It’s testing its R1 level, that favors the bulls.
S&P high low index, flashing back and forth between red and blue, no signal.
S&P 500 percent of stocks above the 50 day moving average, lifting off of these EMA envelope lines very nicely. The TSI green line is widening from the red line, this favors the bulls.
Looking at our earnings for this last quarter, earnings are just, I mean the red line is earnings and you can see that it’s just lifting up very nicely. The Trump tax cuts really helped power that higher even though the Fed was hiking rates. Um, the earnings have grown at such a nice level, while the S&P 500 has kind of stagnated, that’s pushed the P/E ratio on the S&P 500, this gold line, down to 24.03, which is the lowest level it’s been at since June 2017.
Sector rotation for the week shows money going into consumer discretionaries the most and while the under performer was defensive utilities, this white line, that favors the bulls.
S&P 500 high beta stocks to S&P 500 low volatility stocks, the zigzag indicator is currently pointing down. That means that low volatility stocks are doing a little bit better than high beta stocks which favors the bears.
SPY with the PPO, so we, we had a lot of flags here, bullish flag breakout, another bullish flag breakout. If you wanted to call that a consolidation channel instead, that’s fine too. And you could even maybe call this a sideways consolidation channel, that’s fine too. We’re having a consolidation pattern, breakout on the next leg up. Then we’re having another consolidation pattern breakout, on the next leg up. So if this trend continues, we can have another few more up days and then likely get another sideways consolidation pattern up here, but this move up and then consolidates and then the next move up and then consolidates, clearly favors the bulls. Looking at the PPO we’ve got the green histogram bars, which also favors the bulls.
Folks, my rating for trading next week is that the bulls have the advantage over the bears.
Alright you guys, thanks for listening, love you, and talk with you soon.