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- SignalWatch – 5.18.17
SignalWatch – 5.18.17
May 18th
Good afternoon folks. After a big slip yesterday, the market hit the brakes on the bears today with all of the indexes closing in positive territory. The S&P closed +.37%, the Nasdaq +.73% and the Dow +.27%. After several days of explosive political events, it is kind of nice to not have any new nuttiness rock the market. But, they day is not over stay tuned.
Let’s go ahead and dive right on in to tonight’s signals. First on the docket, Apple.
GroupTrader is giving AAPL the thumbs up for continued bullishness.
AAPL recovered much of its losses yesterday as it rebounded for a gain of 1.73% after testing support near $150. This point could be looked at as a bullish fulcrum but it may be too soon to tell just yet. What we do know is that AAPL has been freakishly strong with tons of folks jumping in after AAPL disclosed it was sitting on over $200 BILLION dollars in the cash. Now that will buy you lots of watches and phones. We’ll see if the next round of buying is coming into play, but if anyone has been a bear on AAPL lately, they are more than likely out of the game by now.
This signal was fired by out good friend, GroupTrader. GroupTrader has made more appearances on SW this week than ever before, and the signals thus far have been really good. Once again, GroupTrader finds the most correlated industry groups in the market and then isolates the most confirmed move in the entire group. In this case, we have AAPL outshining the rest of the tech group. If you’re interested in reading more about GT3, you are welcome to do so here!
Next up, the House of Mouse, Disney.
Darvas Classic
The Darvas Box is looking for DIS to drop into the $104 zone.
DIS had been enjoying a stellar 2017 up until the declining numbers on cable subscriptions and poor ESPN number slowed their roll. It has since retreated from highs close to $116 all the way down to $106. This is not the first time DIS has been bit by the bearish ESPN bug either, and it may not be the last. As far as technical levels go, DIS is now testing support at $106 and if it manages to move below it, we could see a fall into the $104 zone, which is the 200 SMA, before too long.
This signal was generated by the Darvas Box plug-in which is one of my perennial favorites. The methodology behind the strategy was developed by Nicolas Darvas and has been used successfully for decades by traders around the world. What Darvas is measuring and looking for is basically changes and increases in momentum. Darvas used market momentum to ascertain when to enter and exit the market. If a stock’s price breaks out of a Darvas Box, it is a considered a potential breakout move. And as we can see on DIS, we are looking at a potential bearish breakout.
For tonight’s last signal, we have a familiar face in CAT.
MoneyZone is looking for a new pop in CAT.
We discussed CAT earlier this week and while it failed to take off, it is still poised for a solid reversion move. It gained .51% today after pivoting off of support at $99 and volume is starting to increase, which is a tip off that a new buying cycle is on the rise. It is oversold on the RSI indicator and about halfway there on the Bollinger Band indicator, both solid pieces of confirmation for a bullish reversion move. If CAT rocks on higher, we could see this rolling into resistance at $104 sooner rather than later.
I was especially to see this signal on CAT considering the plug-in that found it has NEVER been featured on SW before. And that is MoneyZone 2.0. MoneyZone is based on Market Profile. Market Profile Theory is used by both Real Time and End-of-Day traders to find the most accurate levels in the market. MZ2 finds the major levels where the market reacts to price. Money Zone displays levels based on the most recent price and volume action and these levels can be used visually for your trading.
MZ2 also uses Confluence Levels. Confluence levels develop when several MZ levels occur in close proximity to each other. The confluence levels tell us that the market is watching that price. These can represent support or resistance, institutional buying and selling points, or overbought and oversold market sentiments. When current price tests these levels, the reaction is strong and the moves that follow can provide fantastic trades. To learn more about MZ, check its PDF out here.
That’s all for tonight folks. Have a wonderful evening and we’ll catch you tomorrow.
The products and demonstrations listed on this website are not recommendations to buy or sell, but rather guidelines to interpreting their respective analysis methods. This information should only be used by investors who are aware of the risks inherent in trading. Nirvana Systems shall have no liability for any investment decisions based on the use of their software, any trading strategies or any information provided through other services such as seminars, webinars, or content included in the SignalWatch website.
About the Author Ryan Belknap
Ryan has been with Nirvana since 2012 and has been manning the trading desk since Day 1. He was one of the founding members of Nirvana's Trading Lab and also TraderSource.com along with Ryan Olson and Russell Casperson. Ryan logged more than 3,500 hours trading and educating live in the Lab. He is also the lead author of SignalWatch.com. Ryan is a seasoned educator and has conducted numerous educational webinars and is an OmniTrader University instructor. Ryan prefers swing trading and position trading. Outside of the market, Ryan has passions for the outdoors, baseball, exercise, coffee, pop-culture and spending time with his family.