The indicators point to overbought and could remain there at length. Thus far it would appear by T/A standards that a top is not in place. Pay attention to todays close as a return to unchanged could be the start of a well deserved correction.
Correct. A notion that was summarized well in a ~4 minute youtube video titled, "Dow Sell Off - Massive Market Divergence in 3 Charts - Mike Maloney." He states at :56, "this market here is not a healthy market. This means that less and less of the public, the real investors are in there and more and more of this is basically black box trading, where its programs." Whether Maloney is correct or not can be determined, but in my opinion the video and perspective are worth taking into consideration.
Personally involved with the financial markets for over 25 years and don't recall ever seeing anything like this. I'm now conducting a search, unsuccessfully, for correlations of past price action vs. the current trading environment. If anyone can identify such similarities I would be interested in obtaining that information. The best explanation I've heard thus far claims the US equity markets are primarily driven by black box trading.
Historically bubbles have always popped - always. Watch the four minute video on youtube titled, "Dow Sell Off - Massive Market Divergence in 3 Charts - Mike Maloney". He essentially states, "what is being set up here is probably the biggest market crash in history."
Technical trader Oscar Carboni may have coined a new name for a chart pattern he refers to as the "F-flag". Although the name may be new the pattern is not and when relating this formation fundamentally via traditional TA terminology the "F-flag" is simply a 'flag pattern'. However, when viewed in context within current market conditions this particular pattern could differentiate itself from standard flag patterns in that it has potentially developed during market price highs and slants in the same direction as the current trend. Conversely textbook flag patterns, primarily considered continuation formations within pre-established trends would slant in a direction opposite to the major trend. If Mr. Carboni has indeed identified a true topping bear flag pattern the confirmation of such will be known if/when prices resolve per a sharp decline. Loosely speaking Carboni would refer to such a resolution as 'getting effed'.
Seems mechanized, purchase programs automatically triggered during pre-defined market declines. It would seem systems of this kind can only be successful when the underlying price action is bullish. If the long term trend turns and becomes bearish, continued use of such algorithms will incur significant losses. The current trading environment for US equities and other global markets has been referred to as 'Black Box Trading'.
As stated in my previous post on 10/27/2014 regarding the REGN ascending channel price pattern, support 'may' potentially be found (without any guarantees) per the noted price ranges however if the lower channel line should break ~ 300 the possibility of a trend reversal would significantly increase. Currently REGN continues to maintain a long term uptrend. Good luck.
"Because broadening tops are very large reversal patterns, the technical implications are usually extreme. A relatively rare formation that looks like an inverted triangle. The combination of wide price swings and increasing volume implies a frenzied market that is out of control, symptoms of market tops rather than bottoms. The signal that the market has topped occurs when prices fall below the lower low... The pattern consists of three successively higher peaks and another line connecting the two lows when combined gives the price formation its distinctive pattern." With that said, $DJI: 1) 7/23/14 17086, 2) 8/7/2014 16368 3) 9/19/2014 17279 4) 10/16/2014 16117 5) 11/3/2014 17366. Confirmation would require a decline below the lower low or wave 4 ~ 16117. If this occurs the formation is considered complete and would indicate that the market has indeed established a high.
"The most important indicator for a trader is the sharp reversal of trend, what Zoran called the Bifurcation Point. Typically Terminals (and triangles in general) end with a sharp thrust. This signals that the choppy, sloppy, overlapping and very annoying market behavior is changing." " If this turns out to be correct, it would give a high-confidence shorting opportunity.... to confirm this, we need to see a sharp reversal that retraces the rise in half the time."
As the month ends tomorrow 10/31/14 window dressing will be complete and selling will likely ensue again early next week. The triple digit gains on the DJIA are primarily due to V/Visa otherwise today's trade action across the board was essentially a holding pattern. 'Dangerous' seems an appropriate word in describing the current condition of the US equity markets, however as with all market bubbles further upside to the extreme is still a possibility.. The aggressive rally since mid October lacked volume, a divergence that will likely prove unfavorable for the bulls near term.
I saw your earlier post regarding that rather quick 75 dollar advance - and this seems a good strategy as one can trade shorter term fluctuations while simultaneously participating in the long term gains. Good luck.
When I first began trading many years ago I would pose the same question to seasoned TA's and receive virtually the same answer from them which I am going to give to you. "I don't know". This is probably a disappointment for you but please believe that it's an even greater disappointment for me. If only I knew exactly where stock prices would be in the future! Unfortunately my reality isn't this forgiving and my 'unknowing' these days is profound and has taken many years to truly understand. REGN in a nutshell is currently maintaining a long term uptrend which began its somewhat more aggressive ascent in early 2012. Since then the 200 dSMA has remained in tact. Price fluctuations since ~ 2/20/2013 appear to have developed an upward sloping channel formation with current prices nearing the top of that formation (~400.00). When stock prices trade within such formations the approach to the upper boundary may indicate that the security is overbought and if history does indeed repeat itself the stock may possibly soon experience a corrective retracement. For long term shareholders such ebb and flow is thought of as healthy especially when considering the overall price advancement of REGN since 2011 of ~50-400 pps. If a significant pullback officially ensues for REGN, I would target several price ranges as potential support: ~ 369.31 (9/2/2014 High), 344.48 (10/16/2014 gap fill), 320 (200 dSMA), 300 (lower channel line). Admittedly, current price action appears incredibly strong.Good luck.
Not trying to scare people at all - merely pointing out a chart formation in relation to previous price levels. This comment was primarily unbiased/without emotion and if you observe the charts you should see exactly what I'm referring to. Ultimately as a short/mid term trader I know that 'I don't know' whether this stock will go up or down however the charts (not me) may be indicating that REGN is entering overbought territory per the current price levels. Whether you are long or short I wish everyone good luck in trading...
When viewed in terms of percentages the recent decline in the DAX relative to SPY was more severe e.g. DAX 12.4% vs. SPY 7.1%. To date (per my data) the decline and retracement calculations are as follows:
SPY decline 9/19/14 close 200.70 10/15/14 close 186.43 = 14.27 points or ~ 7.1%.
SPY retracement 10/15/14 close 186.43 10/23/14 close 194.93 = ~8.5 points or ~59.5%.
DAX decline 9/19/14 close 9799.26 10/16/14 close 8582.90 = 1216.36 points or ~ 12.4%.
DAX retracement 10/16/14 close 8582.90 10/23/14 close 9047.31 = 464.41 points or ~38.1%.
Essentially these recoveries are virtually on target according to the Fibonacci percentage retracement levels of 38.2%, 50%, and 61.8% with the DAX off by a mere .1 % at 38.1% vs. 38.2% while the SPY differs by only 2.3% at 59.5% vs. 61.8%. Interesting...
The US equity markets declined approximately 9% from 9/19/14 to 10/15/2014. ~A week ago on Wednesday October 15th 2014 the volatility index (VIX) peaked at an intraday high of 31.06 while the DJIA was at a net loss of over 460 points intraday. Current market conditions thus far pose several possibilities but primarily whether the US equity markets are now experiencing a retracement in preparation for a second leg down or that the recent downfall per the dates stated above was merely a temporary but healthy correction within an extraordinarily strong and mature bull market. The unfolding of these possibilities could prove more complex however the essence is precise and simply questions whether or not there will be an advance or decline in the near future. Unfortunately - I don't know and per my experience the answer can only be known in retrospect. JMHO.
REGN continues to trade within an up trending channel where the high boundary or line is derived from the following trade session high's ~ 5/10/13, 10/2/13, 3/6/14. Current prices are now within range of the upper boundary at ~ $400. If this price level is realized it's likely REGN is overbought and will experience a correction phase similar to the retracements that occurred shortly after the above mentioned dates.
AAPL ended positive for the day however reversed course from its intra-day highs. If the US equity markets are in the process of a continued correction then the recent price descent was merely a pre-cursor of a significantly larger decline forthcoming (16-18%+ vs. ~8-10%). If this is the case AAPL will likely descend with it.
Yes, it is nice... virtually all based on the purity of price realization... Long term AAPL maintains its uptrend, clearly. Good luck.