Sunday August 15 , 2021
Today's Diatribe
VantagePoint ai Prediction for Tomorrow
VP clearly projects the anticipated direction and magnitude of tomorrow’s market. One can use any symbol; I trade the EMini S&P short-term and select stocks for my long-term portfolio.
My read of this chart is: Up, up and away again! VantagePoint predicts a high ot 35,616 and a low of 35,403 for tomorrow's Dow Jones Industrials. If you take a careful look you'll see that the predicted high is about the same as Friday's high, and the predicted low is lower than Friday's low. The low, however, is not as low as the Fibonacci extension I already have on the chart, which lies at 35,399, just 4 points below the VP projection. The Fib line is the one I expect to see tested tomorrow.
The short-term MAV is turned slightly down while the two longer term MAVs are still heading upward. All three are decidedly above the zero line. The 3 MAVs typically turn at about 300 and we are now at about 250. If history repeats, VP thinks we are soon looking at a turn down.
While this prediction is good for tomorrow, wouldn't you want to know every day of the week? Of course, the best thing is to run VP every afternoon, not just on Sunday nights, like I do for this newsletter.
VP (VantagePoint ai Software) suggests that tomorrow should explore a bit higher price and lower prices as well.
SunnyBands Implications
Dow Jones
You talk about climbing a wall of worry! We certainly can see it here. Notice the green dot at the right side of the chart; it shows the current price, the last trade on Friday. The green dot is almost on top of the Fib Line at 35,904 and I would expect resistance at that level. Also see that the DMA_H (the multi-colored histogram) is flipping back and forth red and gold. And it's not going very high. That could mean that we are going higher, but in this configuration could mean that a flat to down period is coming. This is why I watch the 1- and 5-minute charts intraday.
If you want to see this LIVE, join my new LIVE Trading Room FREE as a Charter Member. Launch date Tuesday August 24 at 10am PT / 1pm ET. And every Tuesday afterwards for as long as people are interested. To become a Charter Member just fill out the Membership form and tell me you want to receive entry to the Trading Room. Only the first 15 people to register will be free. And you will be FREE for as long as your membership is continuous. The next 15 will pay $19.95/mo, and from then on everyone who registers will pay $29.95/mo. The more people join the more expensive it will become. Such a deal for the early birds!
S&P 500 (ES)
The upper-outer band of the SunnyBands is now below price. Usually when this happens price continues up (or down) for a bit. In fact, price is also above the 21-, 55- and 233-day moving averages. We have had 4 days of green candles (up days) and the DMA_H is gold for each of those days. It is difficult to count the Elliott waves on this chart since the market has been basically straight up since the Covid Crash. Nevertheless, it looks to me that we are at the end of a 3-wave. What does that mean? It could mean a 4-wave down is coming, but never fear: a 5-wave up comes right after that. If we do see a down wave in the near future, I am expecting it should go to the SunnyBands midline at 4,380.
Last week I said that the market "up, up and away" and that seems to be holding true. We have broken the Attractor that is at 35,098 and are today at 35,515 with futures trading lower -- the Dow futures down 75 points. This could just be foreign worries (Afghanistan) or it could be technical trading. We will see tomorrow if the Dow pulls back to the upper-outer SunnyBand. Again, I trade the 1- and 5-minute charts and only use the daily charts for an overall view.
The DMA (DynamicMovingAverage) is still in a long position on the daily chart, with the gold line on top of the purple, having alerted on 7/20/21. The Dow is above the upper-outer SunnyBand, showing strength. The DMA_H on RadarScreen shows Bullish on all time frames but the 1-miinute, with it showing Bearish because of the current after-hours futures session. It's hard to tell whether the market will head on up or drop to the SunnyBand. The slope of price and the DMA is not steep, but is moving slowly upward. However, if you look at the weekly chart you'll see that the Dow has moved sharply up, breaking out of a broadening formation at stumbling at 35,000. Note: I believe that we will see Dow 50,000, but not before some more bumps.
The Dow was up 16 points Friday as folks continued to buy dips. But, the close of the day was down. The tiny Doji candle at the end of the day was red leaving us to wonder over the weekend whether Monday would be a down day. The last two days, in fact, have been Doji bars as the Dow inched toward resistance at the 150% Fibonacci extension from the Covid low.
CONSIDER joining my LIVE Trading Room. I'll be trading live and answering questions LIVE every Tuesday morning at 10am PST. It's FREE for the first 15 people who sign up, and $29.95 after that, and even more after that. Join by checking the appropriate box in the Sunny Side of the Street sign-up form.
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. I can have them sent to you directly from my trading platform. 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. All symbols, all timeframes.
Fibonacci Retracements and Extensions
Fibonacci extensions are coming true all over again. The Dow is righ at the 150% extension with the next extension overhead at 36,941! Will it go for that right away? I have no idea. I have a client who regularly asks me "When?" He always wants to know where the market is going (which I can attempt to answer) and when (I don't know).
Allow me to show you a new chart, one with Fibonacci Cycles drawn on it. From this perspective we can see that the 377 (a Fib Nbr) day extension lies right on current price! Since we basically have gone steadily upward since the Covid low on 3/23/20 I can't tell you what these cycles mean. But they are interesting. From my read of this chart it looks like at 610 days out from the high of the crash will be the end of the next cycle and I would surmise that we will have a correction during that time and near or at the 610th day would be another high. Will it be 50,000? I kind of doubt it, as 610 falls on October 14. Will we have another crash near that day? It wouldn't surprise me as crashes often happen in October. We shall see.
To get a long-term perspective, let's look at the various positions called for by the consensus of timeframes.
Wouldn't you like to have these indicators for your own?
Call me and I'll send you a 7-day FREE trial of these indicators for you to see for yourself.
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. I use Microsoft software so I trade MSFT and so on. Let's first look at the RadarScreen view of a few stocks:
The chart above is my main research tool. It not only has my DMA_H (on which we sorted today) predictions, but has the PHW indicator which allows me to see which stocks are the most tradable. The indicators are sorted today to allow you to see the bullish activity . Notice how much red is in the Bullish stocks. To me this indicates I should be wary of a downturn since so many of the stocks in the NASDAQ are bullish but turning down.
If I sort on PHW from highest to lowest tells me which stocks are the most tradable. A stock that just moves slowly from A to B is an investment, not a tradable. I'm looking for wide swings from which to profit, not just buy-and-hold.
To me trading is not about being right! There are lots of advisors and stock pickers out there who boast about getting MSFT at $32 and holding it for gazillions in profit. My trading style is to specialize in a few things and be good at them. The stock pickers never tell you how many they picked right, only the few that were the big winners. BTW, I'm up 152% for the year, so far.
The columns just past the middle of the RadarScreen window show a colorful area that tells me at a glance the configuration of my DMA_H on all the stocks in this portfolio. (This indicator is called DMA_R_H, meaning DynamicMovingAverage RadarScreen Histogram.) Green Bearish \/ means the stock has been bearish but is now turning up. Purple \\ means primarily bearish. (These are the colors in the DMA_H and SunnyBands DMA. So, "purple" means Purple is on top in the DMA.) Gold Bullish // means the stock is moving upward. Red Bullish /\ means the stock has been going up but has now turned downward.
Of course, you can sort on any or several of these columns with this indicator. Color coding things makes it easy for me to spot opportunities at a glance.
From this look (above) at the RadarScreen (like a spreadsheet) I can sort by SDMA, which shows me all the bullish stocks on top with Dir showing me which are moving aggressively upward and which have been moving up but have now turned down. That's what I did today. Call me, I'll explain it. 760-908-3070 PST.
Click Here to see and listen to the DMA_H Live with BingTicks!
TSLA (my favorite stock) has been moving sideways to slightly upward for the past few months, but is slowly moving upward. You can see that TSLA is in a channel between 558 and 880. I drew the midline between them and low and behold that's exactly where the stock is right now. If I'm counting the waves correctly we are in for a bit of a correcting before establishing a new run up. It looks to me like TSLA has hesitated at the midline, but the DMA_H is bullish but turning over.
I'm hanging in there with Cathy Wood and anticipating her prediction of 4,000 for this stock. Every time it goes lower I buy more shares.
ADBE looks to be continuing upward. However, the DMA_H has turned purple below the zero-line which portends movement downward. Gold is no longer on top in the DMA, but not by much. If this one goes down I'm a buyer. I interviewed at Adobe for VP position 30 years ago. They liked my resume, and in fact some of my former employees worked there, but they thought I was too old. Harumph!
Consider getting the DMA_H and SunnyBands for yourself. I totally rely on them for my own trading.
Send me a note telling me what stock you would like to see analyzed next week.
Gold
It's amazing how this Fibonacci stuff works! The Fib Cycles uncannily show where down waves should start and where up turns begin. Gold has been down this past week, but hit its Attractor at a low of 1,724 and bounced back up. We are currently at 1,778 and the DMA_H is showing bullish. The DMA itself has purple on top, which is bearish, and price is right at the line. Typically price has a hard time moving through the DMA and staggers a bit before breaking through. With inflation kicking up (more than they report; just take a look at the price of your groceries. And I'm paying $4.15 at the gas pump.) I am expecting higher gold prices.
Bonds
Bonds moved down sharply last week only to bounce back up on the SunnyBands midliine. The move down came from the upper-outer SunnyBand and was stopped by the DMA midline. Gold is now on top with price currently at the upper-innner band. If price is weak tomorrow it will be halted in its move up by the upper-inner SunnyBand. If the strong hands take over price will move on up to the upper-outer band at 166-13/32. The expected short-term high is at 166-22/32.
MY DIATRIBE FOR THE DAY
"On Technical Analysis"
Seems the flight to safety during the Covid Crisis is toward trading from home. I keep hearing that businesses are at a loss to find employees, offering all kinds of incentives to entice new and returning employees. Yet, we are staying home in large numbers after a year of figuring out that we can make a living in all new ways.
It seems that everyone is interested in trading now, with bonds and gold misbehaving and interest rates at zero, so there's no point in putting money in the bank. Might as well try to make some money trading. HOWEVER, remember that most people lose their money trading. It takes years to get good at this game.
Yes, it's exciting to trade meme stocks and run them up and rake in profits. There is even a list of the meme stocks so you can try your hand at gambling too. But, remember: most of the "traders" who ran up GameStop (GME) and BitCoin (BTC) and AMC lost money as they greedily waited for them to rise ever higher, and didn't believe the stocks could drop right back to the original price. It's a seesaw. In this instance it's what goes up must go down. There is no fundamental value at the higher prices and when the RobinHooders back off a bit the price falls right back down. This meme-trading game is for the greedy, young crowd that has no interest in the value of what they are buying and selling, they just want to make a quick buck.
The problem is that none of these new traders knows much about Technical Analysis! Pushing buttons to make fast scalping trades at RobinHood does not make you a trader. That makes you a scalper.
Technical Analysts study patterns and trends in the markets and learn at the feet of the masters who have preceeded us. We devour the books of those masters and learn everything we can about technical analysis to buoy our successes. We apply logic and discernment to our trading and make a business out of it, not a game.
Technical Analysts employ this trading discipline to evaluate investments and identify trading opportunities in price trends seen on our charts. We believe that past trading activity gives us a clue to future price movements.
Not all technical analysts trade. In fact, many of them are students of the markets and teachers of what they have themselves have learned and discerned. Some of the most astute analysts are not themselves traders, but they give us gilded lessons in the markets and analysis thereof.
Personally, I will be glad when the kids who are gambling with my stock market either learn Technical Analysis or lose all their money and go get a real job.
IMPORTANT: Nothing in this newsletter is an offer to buy or sell securities of any type, nor is it advice to make any financial decisions. You are in charge of your assets and only you know your risk tolerance and how much you can afford to lose. Never invest/trade with money you cannot afford to lose. This information is intended as educational only. DISCLOSURE.
If You Got this Free Newsletter from someone else and would like to Opt-In, and join us, click here.
Products
All subscribers to my Sunny Side of the Street newsletter, and Members of MoneyMentor, are eligible for a 10% discount on my products. Call if you are interested.
Consulting/Mentoring - There is nothing that makes me happier than my students turning into great, profitable traders. I love to help new traders, and intermediate traders who are in a slump.
"Thanks very much; I do like hearing from you [, Sunny]. Thanks to SunnyBands I now have a net worth above $1.25 Million." -Don T. [Editor's note: Don started 3 years ago with a $25,000 account. And, he told me yesterday that his account is now well over $2 Million.]
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.
Archives
Vol 5:
I always welcome comments at sunny@moneymentor.com.
Click to unsubscribe. I'd be sad to see you go, but I will remove you from my subscribers list.
Sunny has been teaching others to trade almost as long as she has been trading. Helping struggling novices over the hurdles is a passion of hers. Sunny has won awards for her teaching and consulting, being #1 in several categories. Sunny can teach you how to use TradeStation & MultiCharts and EasyLanguage and PowerLanguage, TC2000, VantagePoint, NinjaTrader, Genesis Navigator, and MetaStock so you don’t spend months struggling on your own. If you have a concept you want programmed, she can do it for you or teach you how to do it yourself. Click Here.
We provide a wide range of software programmed by Sunny for her own trading. We are not a churn and burn shop that puts out lots of indicators for sale, just to have products to sell.
Each of these unique products is available to help others in their quest for profits. And, they are used by Sunny in her own daily trading. The software includes indicators that make trading smooth and easy, and strategies that can even be automated to provide hands-off trading. Click here for a full list, descriptions, charts and prices.
