On this week’s edition of Stock Talk with Joe Rabil, Joe presents 5 specific candlestick patterns and how to use them. He explains how the location of these candles have an impact on their importance, and also discusses how a higher timeframe candle can help with trades on the lower timeframes. He then analyses the symbol requests that came through this week, including KEY, NFLX, and more.

This video was originally published on November 30, 2023. Click this link to watch on YouTube.

Archived episodes of the show are available at this link. Send symbol requests to stocktalk@stockcharts.com; you can also submit a request in the comments section below the video on YouTube. Symbol Requests can be sent in throughout the week prior to the next show. (Please do not leave Symbol Requests on this page.)

While Microsoft’s (MSFT) Azure contends for the top spot in the cloud computing arena, trailing behind Amazon (AMZN), its $1 billion investment in OpenAI, and the hand it played in resolving the company’s recent debacle, shows how prominently Microsoft is riding the AI tiger.

Investors, too, must be getting the message, as the market has pushed MSFT’s stock beyond its 52-week high threshold.

How To Scan for Stocks Making New 52-Week Highs

In SharpCharts, from Your Dashboard, scroll the Member Tools on the left and click on Sample Scan Library.The New 52-Week Highs scan is the second from the top on the left side.

The stock went above $379.00 in Wednesday’s trading session, and, with no historical resistance ahead, anyone looking to go long might wonder where a good entry price to open a position might be, despite a slight pullback.

At the end of 2022 and the beginning of 2023, MSFT bounced off its 200-week simple moving average. At least that gave bulls a reference point, with both serving as ideal entry points (see weekly chart of MSFT below).

CHART 1: WEEKLY CHART OF MICROSOFT STOCK. The stock is in all-time high territory. Where to from here?Chart source: StockCharts.com. For educational purposes.

But having broken above its all-time high threshold, it’s hard to tell whether MSFT stock is skyrocketing or whether its sky-high valuations are subject to the forces of market gravity.

Also, fundamentally-based projections aren’t much help here—they range anywhere from $390 to $450 a share. So, if you’re looking to go long, it helps to assess whether the stock is currently overbought and if a dip might be forthcoming. For that, we’d have to look at the daily chart of MSFT stock (see below).

If you look at the relative strength index (RSI), now falling from 70, you can spot a slight divergence between the price rise and the RSI declining from “overbought” territory. MSFT may be pulling back now, but it’s too early to tell if the pullback will continue in the coming sessions.

If it does continue to slide, we’re looking at former resistance-turned-support levels as possible prices to anticipate a bullish bounce. This is punctuated by a thickening bullish Ichimoku Cloud, which, if you can remember, provides a range of potential support.

Why the cloud? The wider range complements the specific price support levels of $365 and $350. A pullback to this range, starting at the top-most $365 level and followed by a bounce, might provide you with an optimal entry point to get long MSFT, should you want to add it to your portfolio.

Note January 31, 2024 on your calendar. That’s when MSFT drops its next earnings report. Right now, the buying craze is also centered on its ties with OpenAI. So keep an eye on any developments or news as we count down to January of the new year.

In the final edition of Trading Simplified, Dave shows his methodology in action by sharing two positions that he continues to hold, even though they were “dead money” most of the time, and why he applied discretion to stick with a losing position to possibly avoid a loss. He also provides a “where are we now” update to the TFM 10% System. He then shifts gears to resume and finish his series on Jesse Livermore; this week, he covers the fact that something is wrong with a stock if it’s going down, how the market is a “discounting mechanism,” and “what is, is” when it comes to markets. Dave then summarizes some of the best quotes and thoughts from Livermore while adding in his own two cents.

This video was originally published on November 29, 2023. Click anywhere on the Trading Simplified logo above to watch on our dedicated show page, or at this link to watch on YouTube.

You can view all recorded episodes of the show at this link. Go to davelandry.com/stockcharts to access the slides for this episode and more. Dave can be contacted at davelandry.com/contact for any comments and questions.

In this edition of StockCharts TV‘s The Final Bar, guest Jeff Hirsch of the Stock Trader’s Almanac shares the suggested seasonal pattern for 2024 and breaks down how previous election years have played out. Host David Keller, CMT highlights a breakout in gold miners, regional banks breaking above their 200-day moving average, and which breadth indicators may signal a short-term market reversal.

Get the 2024 Stock Trader’s Almanac NOW at the StockCharts Store! Save 30% when you use the code “ALMANAC30” at checkout!

This video originally premiered on November 29, 2023. Watch on our dedicated Final Bar page on StockCharts TV, or click this link to watch on YouTube.

New episodes of The Final Bar premiere every weekday afternoon LIVE at 4pm ET. You can view all previously recorded episodes at this link.

As Pete has said several times on the Halftime show before, the Fed will likely cut rates when the unemployment rate ticks higher. Year-to-date the unemployment rate is up 14% from its lows in January and even Christopher Waller, an economist and member of the Fed Board of Governors, mentioned the possibility of rates being cut. He’s known to be hawkish!

On this week’s edition of StockCharts TV‘s Halftime, Pete reviews the iShares 20-year Treasury ETF, the S&P 500, and Nasdaq 100 indexes. He then dives into the US Dollar and Crude oil, before reviewing the top sector and sub-sector ETFs on the Chaikin system. Pete sounds the alarm on two stocks that are under-performing in a hot market – Tempur-Pedic and Charter Communications.

This video originally premiered on November 29, 2023. You can watch on our dedicated Halftime by Chaikin Analytics page on StockCharts TV, or click this link to watch on YouTube.

You can view all previously recorded episodes of Halftime by Chaikin Analytics with Pete Carmasino at this link.

SPX Monitoring Purposes; Long SPX 10/27/23 at 4117.37.
Gain Since 12/20/22: Over 26%.
Monitoring Purposes GOLD: Long GDX on 10/9/20 at 40.78.

There is a very good likelihood of a multi-year signal triggering for GDX in the coming months.

The above chart is on the monthly time frame. The bottom window is the GDX Cumulative Up Down Volume percent, and the next higher window is the GDX Cumulative Advance/Decline percent. These signals generate after a bottom is in, but, once they are triggered, the signal can last many months or years. Bullish signals are generated when both indicators close above mid-Bollinger bands (noted with blue lines) and bearish signals when both indicators close below mid-Bollinger bands (noted with red lines).

Both monthly indicators reached near the 2016 low (noted with pink shaded areas), noting an oversold market. The last sell signal came in early 2021 (nearly 3 years ago), and is now nearing a bullish crossover of the mid-Bollinger band, which may take another month of two. We do have evidence that a worthwhile low has formed already and a bullish mid-Bollinger band crossing of both indicators above will signal that a multi-month, if not a multi year, rally is coming.

Tim Ord,

Editor

www.ord-oracle.com. Book release “The Secret Science of Price and Volume” by Timothy Ord, buy at www.Amazon.com.

Signals are provided as general information only and are not investment recommendations. You are responsible for your own investment decisions. Past performance does not guarantee future performance. Opinions are based on historical research and data believed reliable; there is no guarantee results will be profitable. Not responsible for errors or omissions. I may invest in the vehicles mentioned above.

Note to the reader: Over the next couple of weeks and months, I will be republishing the contents of my book, “Investing with the Trend,” in article form here on my blog. I’m calling this series “The Hoax of Modern Finance” for reasons you will learn below. Hopefully, you will find this content useful. As always, let me know what you think in the comments area below the article. – Greg Morris, Nov. 2023

CHAPTER 1: Introduction

I have learned a few things over the years and probably retained even fewer. For example, I know that when dealing with the unknown, such as it is with the analysis of the stock market, you absolutely cannot speak in absolutes. I also know that random guessing about what to do in the market is a quick path to failure. One needs a process for investing. Any process is better than no process or, even worse, a random or constantly changing process. Hopefully, with this book, you will find the path to a successful process.

The noblest pleasure is the joy of understanding. — Leonardo da Vinci

How can you even begin to analyze the market if you are not using the correct tools to determine its present state? If you do not fully grasp the present state of the market, your analysis, whether real or anticipated, will be off by an amount equivalent to at least the error of your current analysis. And your error will be compounded based on the timeframe of that analysis. This highlights why most forecasts are a waste of time.

Believable Misinformation

One should remember things are quite often not what they seem. It is absolutely amazing to me how many things people believe that are not true (speaking with the voice of experience here). Below are some things that many of us learned in our formative years from our teachers and parents, most of which we just accepted as fact because we heard it from people we believed.

Myth: Water runs out of a bathtub faster as it gets toward the end.

Fact: Assuming the tub’s sides are cylindrical, the pressure is constant; it only appears to drain faster because you can observe it starting to swirl toward the end, something you could not observe when the tub was full. The swirling action deceives one into thinking it is draining faster.

Myth: George Washington cut down a cherry tree.

Fact: George Washington did not cut down a cherry tree. That was a story told so that adults could teach their children that it was bad to tell lies—not even our founding fathers told lies. Parson Mason Locke Weems, the author who wrote about it shortly after Washington’s death, was trying to humanize Washington.

Myth: Washington threw a silver dollar across the Potomac River.

Fact: The Potomac River is almost a mile wide at Mount Vernon, and silver dollars did not exist at that time.

Myth: The Battle of Bunker Hill was fought at Bunker Hill.

Fact: It was fought at Breed’s Hill in Charleston, Massachusetts.

Myth: Dogs sweat through their tongues.

Fact: Guess what? Dogs don’t sweat. Their tongues have large salivary glands that keep them wet.

Okay, the following two examples of believable misinformation are only for the hardy who have found this section interesting. The rest should skip them. They are only for nerds like me.

Myth: December 21 in the northern hemisphere is the shortest day of the year.

Fact: Most people probably believe this. However, it is actually the longest astronomical day based on Kepler’s Second Law of Planetary Motion (planets, in their elliptical orbits, sweep out equal areas in equal time). When the Earth is closest to the sun, the northern hemisphere is tilted away, and a much greater arc is swept in a day’s travel than when the Earth is the furthest distance from the sun. If the question were posed as “What is the day with the shortest period of daylight?” then it would be correct.

See Figure 1.1 for an illustration of Kepler’s Second Law of Planetary Motion.

An additional observation on the tilt of the Earth is that summers in the southern hemisphere are generally warmer than the summers in the northern hemisphere. This can be influenced by the fact that there is significantly more ocean in the southern hemisphere, but also, the southern hemisphere is tilted more towards the sun when the sun is closest to the Earth.

Figure 1.1 Kepler’s Second Law of Planetary Motion

Myth: Bath water drains counterclockwise in the northern hemisphere.

Fact: Another example of how people have believed things that are simply not true is that, in the northern hemisphere, many will say that water, when draining from a tub, will swirl counterclockwise. Although it very well may do so, it is not for the reason they think it will. This is an example of a little bit of scientific knowledge totally misapplied. The Coriolis Effect (see Figure 1.2) is caused by the earth’s rotation and generally applies to large, almost frictionless bodies, such as weather systems. This is why, in the northern hemisphere, hurricanes rotate counterclockwise, and in the southern hemisphere, they rotate clockwise. The rotational effect is measured in arc seconds (a unit of angular measure equal to 1/60 of an arc minute or 1/3600 of a degree), which is an extremely small measurement of angular rotation. Applying this principle to the rotation of water draining from a tub is totally incorrect. High-pressure and low-pressure weather patterns are also reversed—I would love to see a weather reporter from Dallas move to Santiago and adapt to that.

Hopefully, you are getting my point. In the past few years, the Internet has been the source and exploitation of much hype and false information. How many times have you received an e-mail from a friend (who probably did not originate it) and believed it to be true but did not bother to check it out and forwarded it anyhow? You should start verifying them because many of them are hoaxes. Believable misinformation flourishes.

Figure 1.2 Coriolis Effect

If you enjoy this type of information, I would recommend a book by Samuel Arbesman, The Half-Life of Facts: Why Everything We Know Has an Expiration Date. Arbesman is an expert in scientometrics, which looks at how facts are made and remade in the modern world. People often cling to selected “facts” as a way to justify their beliefs about how things work. Arbesman notes, “We persist in only adding facts to our personal store of knowledge that jibe with what we already know, rather than assimilate new facts irrespective of how they fit into our views.” (B4). This is known as confirmation bias, which is dealt with in Chapter 6.

A general theme throughout this book is one of separating fact from fiction. Fiction, in this case, is often a well-accepted theory on finance, economics, or the market in general. If you were caught believing some of the things mentioned in the previous paragraphs, then how much from the world of investing do you believe? Just maybe you have accepted as fact some things that simply are not true. I certainly know that I did.

In this chapter, a lot of basic information is provided to assist you in understanding the remainder of this book. There are definitions, mathematical formulae, explanations of anomalies, historical events that affect the data, differing methods of calculation, and a host of other important information normally found in an appendix. It is of such importance to understand this material that it belongs prior to the discussion and not in the appendix, as is usually the custom.

Thanks for reading this far. I intend to publish one article in this series every week. Can’t wait? The book is for sale here. Next up: A helpful list of indicators and terminology that you need to know, followed by a frank discussion about financial data sources and their accuracy.

On Monday, after the close, some warning signs from our risk gauges popped up. These are especially interesting given the number of bulls and the amount of money coming into the market.

Technically, we still have the resistance that has not cleared in small caps, retail, or transportation. And this is all happening with a declining dollar, bullish gold, plus renewed buying in agricultural commodities.

Could these warnings reverse? Yes, but this is the most risk-off we have seen as far as the gauges since April.

Risk Gauges: WARNINGS

SPY (S&P 500) now on par with TLT (long bonds); you don’t want TLT to outperform. Risk off.HYG (junk bonds) underperforming TLT. Risk off. SPY is now underperforming GLD (gold). Risk off.WOOD underperforming GLD. Risk off.

Risk off means just that, so pay attention — these gauges are incredible.

On another note, check out Your Daily Five with 6 picks and setups I did for StockChartsTV.com today!

This is for educational purposes only. Trading comes with risk.

If you find it difficult to execute the MarketGauge strategies or would like to explore how we can do it for you, please email Ben Scheibe at Benny@MGAMLLC.com, our Head of Institutional Sales. Cell: 612-518-2482.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

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Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth.

Grow your wealth today and plant your money tree!

“I grew my money tree and so can you!” – Mish Schneider

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish covers the technical setup for Palo Alto and how MarketGauge’s quant models found this winner on Business First AM.

Mish and Maggie Lake cover inflation, technology, commodities and stock picks in this interview with Real Vision.

Mish talks trading range, fundamentals, and how to think about commodities right now on Yahoo! Finance.

In this appearance on BNN Bloomberg, Mish covers the emotional state of oil and gold, plus talks why small caps are the key right now. She also presents a couple of picks!

Learn how to trade commodities better with Mish in this interview with CNBC Asia!

Mish and Charles Payne discuss why the small caps, now in mid range still have a chance to rally in this appearance on Fox Business’ Making Money with Charles Payne.

Mish talks about Tencent Music Entertainment on Business First AM.

Mish talks bonds with Charles Payne in this clip from October 27, recorded live in-studio at Fox Business.

Coming Up:

November 29: Crypto Town Hall & Schwab Network

November 30: Live Coaching

December 3-December 13: Money Show Webinar-at-Sea

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY): 450 support, 465 resistance.Russell 2000 (IWM): 181 resistance, 174 support.Dow (DIA): 360 resistance, 346 support.Nasdaq (QQQ): 388 now pivotal support.Regional Banks (KRE): 45 big resistance.Semiconductors (SMH): 160-161 pivotal support.Transportation (IYT): 235 support.Biotechnology (IBB): 120 pivotal.Retail (XRT): 65 resistance and 60 pivotal support.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

The cryptocurrency space has had its share of challenges, but Coinbase (COIN) looks like it may be setting itself apart from the pack, especially after its last earnings report on November 2. COIN’s stock price is up over 200% this year and it made it to the top position in the StockCharts Technical Rank (SCTR) score.

CHART 1: STOCKCHARTS TECHNICAL RANKING (SCTR). COIN made it to #1 position in the Top 10, Large Cap category.Chart source: StockCharts.com. For educational purposes.

In the weekly chart of COIN below, you can see that the stock has broken above its August 2022 and July 2023 highs. The stock is trading above its 50-day simple moving average (SMA). If COIN continues moving higher, there’s not too much in terms of resistance. Remember, however, that the stock started trading in April 2021, so it’s not going to have too many significant support and resistance levels, especially in a weekly chart. But it’s still a good stock to add to your ChartLists, especially if Bitcoin and other cryptocurrencies set up for a bullish rally.

CHART 2: WEEKLY CHART OF COINBASE STOCK PRICE. The stock has broken above its more recent highs. It remains to be seen if the breakout has some follow-through.Chart source: StockCharts.com. For educational purposes.

Let’s switch to the daily chart to see more granularity in COIN (see chart below).

CHART 3: DAILY CHART OF COIN STOCK PRICE. The stock’s trend is correlated with the trend in cryptocurrencies. A SCTR score of 99.9 and RSI of 85 could mean the stock is overbought. Look for a pullback followed by a reversal to the upside.Chart source: StockCharts.com. For educational purposes.

With a SCTR score of 99.9 and a relative strength index (RSI) of 85, there’s a chance the stock is overbought. A pullback followed by a pivot reversal with strong upside momentum would be a good reason to add the stock to your portfolio. Since it’s a risky play, given the volatility in cryptocurrency, place a tight stop if you enter a long position.

The price of COIN stock moves in sync with the crypto market. If crypto sees strong performance by Coinbase’s next earnings date on February 20, COIN’s stock price could move higher. But keep your ears open for news on the regulatory front. Any regulatory threats could send crypto prices lower, fast.

What’s the Significance of the SCTR Score?

In a nutshell, SCTR is a numerical score that ranges from 1 to 100. The higher the value, the higher the stock’s rank. To get a high SCTR rank, a stock or ETF should score high with all the indicators used to calculate the SCTR score and in the short, medium, and long-term time frames.

The SCTR score identifies the leaders and laggards within specific industry groups. Since the calculations are done for you, all you have to do is add the indicator panel on SharpCharts or StockChartsACP.

How To Add the SCTR Line to Your Charts

In the SharpCharts Workbench, from the Indicators dropdown menu, click SCTR Line.In StockChartsACP, click on SCTR Line from the Standard Indicators list.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

It’s the end of the month, which means it’s time for me to take a look at the seasonal behavior for the S&P 500 and its sectors on this episode of StockCharts TV’s Sector Spotlight. Is there is any alignment between historical and actual rotations? That proves to be difficult to assess, but, by switching between daily and weekly rotations on Relative Rotation Graphs, we can see that some sectors are popping up with potentially interesting rotations.

This video was originally broadcast on November 27, 2023. Click anywhere on the Sector Spotlight logo above to view on our dedicated Sector Spotlight page, or click this link to watch on YouTube.

Past episodes of Sector Spotlight can be found here.

#StaySafe, -Julius