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Markets Behaving In Chart-Friendly Manner

By Tim KnightMarket OverviewFeb 15, 2022 09:30AM ET
www.investing.com/analysis/markets-behaving-in-chartfriendly-manner-200618021
Markets Behaving In Chart-Friendly Manner
By Tim Knight   |  Feb 15, 2022 09:30AM ET
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The equity markets are surging higher this morning, I have almost nothing but short positions, and I think it’s great.

Why? Well, because the markets are behaving in a completely chart-friendly manner, and the 23.6% retracement level I warned premium members about yesterday did a picture-perfect job calling for a bounce, which is why I covered my largest position, my IEFA short.

There’s no doubt I’m going to see my positions weaken substantially in the open. It doesn’t matter, because the charts are behaving beautifully, and that’s really what I’m after. Plus, I have a ton of free cash available.

Below is the 4-hour bar chart of the S&P 500 Futures. You can see the amazing job the Fib retracement did by calling for a bottom. Look at the congestion area it has entered, however.

S&P 500 Futures 4-Hour Chart
S&P 500 Futures 4-Hour Chart

The market’s situation is made plainer by the NASDAQ 100 Futures chart, which shows the steady stair-step progression. Time and time again, “the bottom” is achieved, and a bounce ensues, and Jim Cramer and Marko Kolanovic tells the world to go long, only to see equities roll over again. I doubt it’s different this instance.

NASDAQ 100 Futures 4-Hour Chart
NASDAQ 100 Futures 4-Hour Chart

My enchantment with gold’s rise yesterday is unswayed, because, again, the chart is doing precisely what you would want to see. Gold is just about the only thing getting zapped this morning, thanks to the Ukraine nonsense vanishing, but the tumble is precisely to the former resistance line which, yes, is now support. In other words, this looks like a great buy point for gold.

Gold Weekly Chart
Gold Weekly Chart

I’m particularly excited because on Monday I once again tilted at the energy windmill, and it looks like it’s going to work. I bought puts in Oil & Gas Exploration & Production ETF (NYSE:XOP), Occidental Petroleum Corporation (NYSE:OXY), Energy Select Sector Fund (NYSE:XLE), and APA (NASDAQ:APA), and thanks to crude oil's sudden reversal, I think that’s going to be a salve for the bump in equities. Here is crude oil:

Crude Oil 5-Minute Chart
Crude Oil 5-Minute Chart

As for a “you are here” moment, I think the ES chart below tells the tale. We have, yet again, pushed above a small bullish pattern, and my intuition is that it will shortly sputter.

S&P 500 Futures 5-Minute Chart
S&P 500 Futures 5-Minute Chart

Markets Behaving In Chart-Friendly Manner
 

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Markets Behaving In Chart-Friendly Manner

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Comments (4)
Casino Royale
Casino Royale Feb 15, 2022 10:30PM ET
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Thank you for the insights
Shep De
Shep De Feb 15, 2022 5:45PM ET
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Tech is going to greatly slowdown, analysts will forsake it as the tightening cycle looms, not a question of "if," anymore, was, nope, now only Q is what will it be March 15 FOMC meeting. Well, plenty of highly inflationary data, including today's CPI that retail chose to just follow the herd (tech). You do know how followkng the herd turns out, rightNot good. Markets, led by people tired of tech. Netflix, Facebook, viac, proving; high growth stocks about to be greatly lowered. Nasdaq 10,177 incoming by March 17.
Donatur Lane
Donatur Lane Feb 15, 2022 1:04PM ET
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hope to hear more from you
Donatur Lane
Donatur Lane Feb 15, 2022 1:03PM ET
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Thank you for your guide a good one .
 
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