Sunday July 04, 2021
VantagePoint ai Prediction for Tomorrow
VP clearly projects the anticipated direction and magniture of tomorrow’s market. One can use any symbol; I trade the EMini S&P. (I trade stocks and ETFs long-term.)
Last week I showed you a chart of the ES; this week we are looking at the Dow ($INDU). It is important because it is lagging the ES and the NQ. My read of this VP chart is: all 3 moving averages are above the zero line and pointing upwards. This is a strong bullish sign. VP is predicting a breakout from the Attractor at 34,800. That's saying a lot! As far back as the May 23 issue of SSS (Sunny Side of the Street) I said I was watching for the Dow to break 34,980. I'm still waiting, but I think it will happen soon.
Last week the VP predition was "up" and this week it is also pointing toward bullishness. The Nasdaq (NQ) is 700 points above its breakout, the ES is almost 100 points above its breakout, and the Dow is lagging.
Dow Theory (traditionally) compares the Industrials to the Transports to confirm or deny market trends. I like to compare the Dow and Nasdaq to the S&P to tell me trends and trend changes. To me, a bull market is when they are all 3 moving upward and above their averages.
Today I believe that the Dow will move on up to test the Attractor at 35,000. Who knows what it will do after that. I could easily go either way. I'm keeping tight stops just in case.
VP (VantagePoint ai Software) suggests that tomorrow should move to the upside to break through the Attractor at 34,800.
SunnyBands Implications
Dow Jones
S&P 500
The Dow has further to go on the upside before hitting resistance.
Last week I said: "The DMA ... [is] signalling more action to the upside." Since last week's SSS, the Dow is up 503 points and the ES is up 71 points. The NQ (Nasdaq) is up 475 points.
The DMA (DynamicMovingAverage) gold line has just crossed over the purple line, signalling more action to the upside. The DMA_H as been positive since 6/21/21 catching most of the move up!
Since this is a weekly missive, we miss the daily changes to the indicators. Send me an email if you are interested in daily updates. Or better yet, order SunnyBands and DMA_H for your own computer. Of course, like all my products, they work on intraday charts just a well. Any chart, any timeframe.
The ES is above its recent Atractor and shows no current signs of turning around. Looks to me like we are heading for 4,500 which is just below the next Fibonacci line at 4,541. The question is: will the ES take the Dow higher, or will the Dow drag the other two indices down with it?
I'm betting on an extended Bull Market and at the same time watching my DMA_H for any hint of a short signal.
The Dow, as I said, is lagging. The next FibLine above the current market is at 35,708. I'm wondering if the Dow will actually break the line at 35,000 and keep on going. Or, will it set up a coil and drop back down to the channel and subsequently drop as low as 33,663. Keep on your toes. If the Dow heads back down when it hits resistance, it will likely drag the NQ and ES with it.
Fibonacci Retracements and Extensions
Fibonacci extensions from the big "Covid Crash" can tell us a lot about where the market might be going. The upper extension is at 4,260 while the nearest extension on the way down is at 4,080 on the ES and on the Dow it is at 32,993, which I'm calling 33,000. It's a pretty narrow range, and the DMA is right at that same level. Over the past 15 months the market has done nothing but trend straight up at about a 30 degree slope. It could easily keep following that trendline as the economy recovers, inflation is currently low, interest rates are low, and people are going back to work.
The DMA_H called for Short positions on 6/16/21 ar 4,215 on the ES and the Dow signaled Short on 6/8/21. That only lasted until 6/24/21 when a long was signalled again, and has continued through now.
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Stocks
In this section, I'll take a peek at a few of my favorite stocks. Like Cathy Wood, of Ark Invest, I like disruptive stocks, those that promise radical changes to the way we live, like TSLA. I also trade what I know. I use Amazon in real life, so I trade AMZN. I use Verizon as my phone carrier, so I trade VZ. Someone told me recently that some famous investor/trader does the same thing. If you know who that person is, jump to Comments and tell me who.
My favorite, TSLA, shows some trepidation on VantagePoint. See below. I've drawn a horizontal line at 700, where there is resistance. The gray bar also shows that TSLA could go up and down tomorrow with some indecision. The chart also appears to have a one-two and three-wave setup. The current activity could be a sideways four, or could be signalling further movement to the downside before powering on upward for a 5-wave. (See Elliott Wave.)
The chart above is what tells me where it's going and when it turns, about any symbol, any timeframe. Look back to one of the charts. You'll see that when the gold DMA line is on top this RadarScreen view (like a spreadsheet) has gold in the cell. IF however, the gold line is still on top and has turned down (but is not yet crossing) the cell will still say "Bullish" but will be colored red and the direction indicator will read "/\" instead of "//". That tells me that it was strongly up and now has turned, possibly signalling a turn in the market.
From this look at the RadarScreen I can sort by SDMA, which shows me all the bearish stocks at the top with Dir showing me which are moving aggressively downward and which have been moving down but have now turned up. Call me, I'll explain it.
After sorting, the window looks like this:
Click Here to see DMA_H Live! The sound is my BingTicks indicator, highlighting every tick of the market and the direction of the movement.
The purple cells whow which symbols are aggressively bearish, while the green cells show bearish symbols that have turned upwards. The preponderance of green tells me that lots of stocks have turned up and may be getting out of the bearish phase! Lots of pressure to move the market on upward aggressively.
MSFT is of itself a mixed bag of directions. It is volatile and a great tradable stock. Currently MSFT is above its 238.2% Fibonacci line at 272.72. It could easily take a correction down to the previous high at 261, or it could power on and go higher. I'm seeing a bullish move in the markets in general, and all boats rise with the tide, so I'm expecting higher prices, but keeping my profit-taking stops tight.
Consider getting the DMA_H for yourself. It's a great trading tool!
Send me a note telling me what stock you would like to see analyzed next week. Enter the symbols you want to see in the comments section.
Gold
Gold gave us a short signal on 6/3/21 and is has been moving down. However, as I suggested last issue, I expected Gold to bounce at the 1,750 Attractor, and it did. It's not much of a move upward, and is still locked in a little channel, but with the DMA lines right above price, I'm expecting gold to move on up to the 1,800 level. There is an Attractor from May right above price, also at 1,800ish. If that were not breached then this could be a long, rolling Head & Shoulders pattern, which would set up gold to move on downward.
Bonds
Let me repeat what I said last week: "Bonds are inching their way upward. Not speeding along, but no longer moving downward either, and are moving at a nice clip. The DMA line is gold on top, and the slope is decidedly upward. Price is above the DMA giving it great support." While price is still touching the upper-outer SunnyBand, the band has turned inward, and price is lower that it was when it first touched the U-O Band.
Furthermore, there is a long-time-forming triangle (drawn in orange) that price has recently broken, signalling more price movement to the upside.
There is a nice Attractor at 164.5 which I think will pull @US on up to that level. And, the next Fibonacci Line above current price is at 163.11.
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SunnyBands - SunnyBands are a extension of my DMA. The two lines above and two lines below the purple and gold DMA alert me to where the market is going. They are constructed from ATR bands on either side of the DMA.
DMA_H - Sunny"s DynamicMovingAverage in histogram format, using sophisticated math to smooth out the whipsaws.
Of course, my indicators work on any symbol, any time frame. In my own trading I use 1-min charts of the ES.
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