Well, my friends, looking at the ES chart below, it's pretty hard to conjure up anything bearish about it – – even if you squint really hard. Breakouts are happening everywhere, and the fact that the S&P 500 made a new five-year high today is all over the media.
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The general operating plan has been toward a market that can drag on
into spring with a bullish bias. But in the short-term, over bought
markets can continue to correct. I have taken profits on some
overbought global positions and would like to watch for re-entry.
Interestingly though, the various ‘Gold Bugs’ data compiled by Sentimentrader.com
show an embattled sector that has scrunched even further to the left on
the graph above and is the lone item sitting in a good risk vs. reward
Even though ProphetCharts is my own product, I am still discovering things about it. Just yesterday, I figured out a cool little trick that some of you might like, particularly as we're heading into earnings season.
Let's say that you were curious when the earnings for, in this example, Facebook were going to be announced. You can press Ctrl-E in ProphetCharts, and all the events (including earnings, marked with a dollar sign) are displayed – – but that's just for the past.
As most of you know, I tend to be a straight-up short-the-stock kind of guy, rarely indulging in options trades. However, there are two stocks whose prospects for lower prices are so tantalizing to me that I put a little cash into my options account and secured puts in both positions. They are Chipotle (CMG) and HerbaLife (HLF).
Like I said, these are tiny positions, but they're doing nicely in the little bit of time I've owned them since an hour ago.
HerbaLife is a particular favorite of mine. Back when it was getting devastated last month in the mid-20s, I said if it ever got back to above $40, I'd love to short it. I thought it would be months before the public was blinkered enough to bid this stock back up, but it only took a couple weeks. Sure, it could go a little higher from here, but I think this stock is in profoundly serious technical trouble.
The main chart for today is the SPX 15min chart. Obviously the declining channel / flag I showed yesterday broke up overnight and a decent short term support trendline has been confirmed at yesterday's low. As I said yesterday morning, this suggests a test of the highs and within the current rising channel there is now room for a test of the 2012 high at 1474. If we see that then strong trendline resistance would be close above and most likely we would have negative divergence on the 60min RSI at that test: