Sunday night September 05, 2021
Your Trading Plan
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: Looks like the Dow is still struggling to catch up to the ES and NQ. No new highs are predicted for tomorrow. Check the home page of this website every day to see the latest VantagePoint prediction.
The MAVs still look confused to me, with all three hovering about the zero-line still. It is hard to say what might occur this coming week.
Notice the orange vertical and horizontal lines, and the trendlines. They are telling. The vertical lines show where the weeks are. I give you predictions on Sunday night, and the rest of the data between vertical lines is what happened for the week. The horizontal lines show my Attractors (aka support and resistance). I hate to be questioning their prediction, but I think there is room on the downside for the averages to test this week before continuing on higher.
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. And you can always look at the home page of MoneyMentor to see the current VP chart.
VP (VantagePoint ai Software) suggests that tomorrow should explore a bit higher price and lower prices as well. But it doesn't yet fulfill new highs as the ES and NQ have done.
These Two Charts Worry Me
The first chart shows all three indices on one chart. Notice the orange lines showing resistance on all three. This is the type behavior that shows hestiance and weakening. All three indices are flat to down for the past week. The chart depicts the ES, Dow and NQ on a daily basis. The ES is flat for the week, the Dow is sloping down and the NQ is flat. This could just as easily predict a sharp down draught or a strong jump upward. We will look at my indicators on these charts down below.
Next we see a chart of the Real Estate Crash of 2008 which gave us plenty of warning before it happened. Take a look at the two orange lines I have drawn on the chart. We see something like that warning now with the indices stagnant.
Again, in 2001 when the NQ lost 58% of its value, you can readily see the Head and Shoulders patterns and downward threats that preceeded the crash. Mind you I'm not predicting a crash just yet, but I am watching carefully and "keeping my powder dry."
SunnyBands Implications
Dow Jones
The Dow was pretty much flat this week, which is enough to scare me a little bit. It wouldn't really worry me except that the other two indices I watch are stagnant as well.
Last week I said I thought there was room on the downside for the markets. It didn't really happen. The indices went sideways all week. That in itself shows weakness to me. I am still preparing for a correction of some size in the next two months.
Notice on the chart above that the Dow can't seem to get above the SunnyBands (which would be bullish), and in fact the bands are squeezing together. Another sign that it might make a corrective move soon. The DMA_H, however, has not crossed the zero-line, but the vertical bar Histogram has been red since 8/17/21 near the high at 35,631. Dow has not exceeded that high, but neither has it dropped significantly. The DMA itself is still "gold on top" with the gold line of the DMA lying at 35,054, which I believe is the next destination. That should scare some folks; but maybe they will be buying bottoms again and shoot the Dow out of its resistance.
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I am still predicting Dow 50,000 but not just yet. We still have some downs and ups to explore before we get there. Beware October!
S&P 500 (ES)
The ES has continued to make new highs, but VERY SLOWLY. Little, skinny trading ranges show on the chart. I have an indicator that shows a little red or green dot at the far right edge of my chart, showing whether the last tick was up or down. It is currently red, showing me that the last bar was actually down. Further, the last vertical bar on my DMA_H is RED showing the possibility of a down move this next week.
There's gotta be a correction sometime! "Everyone" is saying October, so it might not happen. What "everyone knows" often doesn't happen. Nevertheless, I'm staying on my toes.
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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 still fighting to get to 4,595 which is the next extension upward by my count. We are just shy of 70 points away from that target. The Average True Range (ATR) is squeezing down as the ranges get smaller and smaller. Currently the ATR for a day is 27. To me that means that it could easily take 4 days to reach the target if it stays the same. The maximum ATR since May has been 80, saying that we could make it in one day if excitement sets in.
The Fibonacci Speed/Resistance Arcs on the above chart at the far right tend to portend a correction! Sometimes the corrections happen before the arc and sometimes after, but it is a pretty good predictor.
To get a long-term perspective, let's look at the various positions called for by the consensus of timeframes. They are all bullish, but some are "turning down". It's a mixed bag this week.
You need to have these indicators for your own to take your trading to the next level.
Call me (1-760-908-3070) and I'll send you a 7-day FREE trial of these indicators for you to see for yourself. Don't want to call? Just fill out your questions and desires on my Comments form and I'll get right back to you.
Stocks
In this section, I like to 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 predictions, but has the PHW indicator sorted which allows me to see which stocks are the most tradable. Notice that AMZN is the most tradable on a daily chart with a PHW over 10,000. That means that trading the swings on this chart could yield $10,000 per share over the 4 year timeframe . AMZN is great for a swing trader because it vascilates back and forth four or five hundred points every 4 to 6 weeks.
When 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. This is how I decide what to trade.
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. I specialize in a handful of stocks for the long swings and the EMini futures for intraday trading.
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 or the PHW which shows me the most tradable stocks. Call me, I'll explain it. 1-760-908-3070 PST.
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AMZN is in my focus today. Looking at the yellow highlighted area you can see that AMZN is bound in a trading range. It did pop out for a couple of weeks, but fell right back in. The last few weeks AMZN has been pushing upward towards the top of the range, but last week fell back to the Fibonacci line. The RSI ticked above the 60 line and slowed. The DMA_H signalled a bullish move on 8/23/21 at 3,265. I know this stock is expensive, so just buy fewer shares. Buy one, even. The Attractor above is at 3,546. Current price is 3,478. That's $68 if it does it. I think it will dip just a bit lower, so I'm a buyer expecting a bounce if it hits the Attractor at 3,428.
Notice a newish indicator on this chart. My PennantFinder indicator draws congestion patterns, highlighted by blue triangles and red breakout lines. This past week, while Sam Tennis and I were working on our new book "TradeStation EasyLanguage OOEL Made Easy!" he taught me how to highlight the pennants with a yellow background. It definitely makes it easy to see. If you already have this indicator, call me or email me so I can send you the update. (Updates are always free.)
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.
ADSK had a big down day last week. I bought in at the bottom of that move. Does it mean that is the absolute bottom? No. But it might be. And if drops lower I'll buy more. Why? Because I like the company's products and there is an Attractor right at current price that might be hit or not, and the low price of the move down touched the lower SunnyBand and it also hit the 55-day MAV. That's my story & I'm sticking to it. This week I'm still holding and the Attractor gave us an up bar on Friday, so I'm encouraged even though the DMA_H shows further downward movement at this juncture. Maybe I'm wrong, but it's at the Fibonacci 61.8% retracement and bounced. We'll see what happens tomorrow.
Buy the DMA_H and SunnyBands for yourself. They are life savers. 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.
BitCoin, Gold, Bonds
BitCoin
As I write this today, BitCoin is trading at 52,115. Breaking above 50,000 was significant. In the chart above, price is above "everything." BitCoin is above the DMA, above the 21-day MAV, above the 55-day MAV and above its recent Attractor of 47,618. Strong as ever, BTC is trading upward in waves, approaching the Attractor at 53,708 and a Fib Liine at 51,358. The high was at 66,175on April 14th. I expect we will see that high broken in the next few months.
Gold
Gold futures are trading down slightly in this afternoon's trading. Price on Friday touched the upper-outer SunnyBand, which often leads to either price action fails, or pushes on upward through the upper band. The DMA is now "gold on top" as of Friday and the DMA_H has been bullish since 8/11 at 1,753. Price is currently 1,828.
Bonds
Bonds are holding steady still at the DMA and at a significant trendline upward. If price moves downward through either, it could mean weakness that would follow through, on down to the lower SunnyBands. Alternatively, price is in a narrow range and could get some strength and push on up through the upper bands at 164.59. The DMA_H has been crazy whipping back and forth from bullish to bullish-down making it very difficult to follow. The real question is: what price is China willing to pay for our debt?
If price is weak tomorrow it should be halted by the lower-inner SunnyBand. No telling what the problems in Afghanistan will do to bonds. The futures are currently "sharply sideways." The expected short-term high is at 166-22/32. VantagePoint's prediction for tomorrow is downward, to 163^25 with a high of 164^27. That, if fulfilled, will take bonds down to the Attractor from July's high.
MY DIATRIBE FOR THE DAY
"Your Trading Plan"
Everyone needs a Trading Plan! All entrepreneurs need a Business Plan. If you aim for nothing, you'll surely hit it. You must have a plan to succeed. I have gone to great lengths to create a Trading Plan for myself and for YOU. If you would like to see what I think about creating your Trading Plan, just fill in this form and I'll send it to you FREE. Look Below for a Snippet.
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.
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"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.
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