Author Archives: Right Side of the Chart

Short Interest on Leading Stocks At Multi-year Lows

By -

Short sellers are often vilified by the mainstream media, CEO’s of publicly traded companies & many institutional money managers which are forced, by prospectus or other security selection parameters, to maintain only long-side exposure to the market.

I won’t go into all the benefits that short sellers provide, such as liquidity and sniffing out corporate malfeasance while the masses are content to turn a blind eye as long as a stock is in a bull trend, other than to mention that short sellers, at least when short interest is at normal or above average levels, often serve as a backstop in a stock or the broad market during selloffs as short sellers are the only guaranteed buyers in the market.

(more…)

Mutual Fund Outflows Warn Of Another Major Leg Down in Equities

By -

On the chart below, I plotted the month-end values of the S&P 500 against the Domestic (U.S.) Long-term Equity-Only Mutual Fund Flows. Although we don’t have the data for the October month end yet, the first two weekly reporting periods (Oct 7th & Oct 14th) for Domestic Equity Funds have seen net outflows of -$1.31 & -$1.44 billion, respectively, for a total of roughly $2.8 billion in net outflows MTD (data for the week ending Oct 21st should be released in the next day or two).

Note how investors “bought the dip” in previous corrections, providing institutions with the capital to buy more stocks which fueled the next leg higher in U.S. equities whereas this most recent correction has been followed by persistent, massive withdrawals from US equity funds.

$SPX vs Fund Flows

$SPX vs Fund Flows

(more…)

DAVE: Good Food, Great Chart.

By -

DAVE (Famous Dave’s of America) looks to offer an objective long entry on any break above 12.75, which will have taken the stock over that purple minor downtrend line on this 120-minute period chart. R1 & R2 are the first key resistance levels where active traders might opt to book quick profits while the official (swing trade) targets for this trade are T1 at 15.35 & T2 at 16.95. Suggested stop on a daily close below 11.70.

DAVE 120-minute Oct 6th

DAVE 120-minute Oct 6th

(more…)

Financials Poised For Another 8-10% Downside

By -

Shortly after closing out the previous FAS short trade for a 29% gain in exactly one month, with a nearly perfectly timed exit on the morning the big August 24th meltdown, FAS (3x long financial ETF) was once again posted as a new short setup in this post last week & went on to trigger an entry later that day when XLF dropped below 22.95.

FAS ETF chart

FAS Bearish Pennant Formation

(more…)

AAPL: The Anatomy Of A Bear Market, Part I

By -

I was asked if I had any updates to share on AAPL (Apple Inc) and figured that as the world’s largest publicly traded company & one of (usually THE) most widely held stocks, my thoughts on Apple were worth sharing. In doing so, we’ll begin with a look at the recent technical developments over the past several months & near-term outlook, followed by a look at the weekly & monthly charts and my thoughts on where the stock is most likely headed in the coming months & possibly years.

In this post published on April 28th, literally the very day that AAPL printed it’s all-time high, I had pointed out several bearish technical developments, including a bearish engulfing candlestick, also stating that “clear bearish divergences are signaling that the odds for at least a substantial multi-month correction or bear market (in AAPL) are elevated at this time.” (more…)