MY JOURNAL FOR FRIDAY – September 16, 2022
NEWS, BREAKOUTS, MOMENTUM PLAYS & BOTTOMS
Understanding The Price Action | Greg Schnell, CMT | Osprey Strategic (9.16.22)
There are so many charts at inflection points. Not just on a daily chart, but on 10-year time frames. For me, the larger market direction is at an important precipice. Being involved or standing aside will be paramount to your wealth position heading into year-end.
XLY – Consumer Discretionary
As an example, let me talk about the consumer discretionary sector.
Consumer discretionary is a popular investment sector. Many of the meme stocks are in this sector. TSLA and AMZN are the behemoths in the sector. Retail names that swing in and out like LULU and TPR are in the sector.
The chart for consumer discretionary sits on a very relevant trend line. Going back to the 2010 period, XLY held a firm uptrend. COVID 19 came and went, stunning the industry by closing malls to foot traffic. For many of the charts, the COVID 19 lows snapped long uptrends. More importantly, the charts rebounded quickly and got back above the long term trend lines.
In the first half of 2022, XLY broke the long uptrend for the second time. After the June lows, the chart rallied. The August reversal has parked us on that line again. However, the chart has changed in character. Can you see it?
Notice the green line with a sharp downslope in the bottom left and now it is also in the top right of the chart. After trying to rally back through the 40 week moving average, we are stalling. I think we have failed at trying to breakthrough the green line and now we risk breaking the 13 year uptrend line for the second time. The June drop found support at the 9 year long red trend line. We have a little room to get back to that line.
As the consumer discretionary sector is slowing the pace of advancement (green line downtrending), it would be likely that a consumer discretionary chart is also going to be hit by a recessionary slowdown. If the long term uptrend is broken (black) again and we end up moving to a more shallow uptrend (red), this is a significant longer term change as the green line is telling us.
Tesla
Looking directly at TSLA, the chart is the strongest of the top 6. The chart is making a series of lower highs, but pushed to trade back above the 40 week moving average this week. In contrast, the PPO has a 2-year long downtrend in momentum, reflecting the flat price chart since January 2021.
The pivotal location on the chart is now. Can the PPO momentum break the two-year long downtrend? If so, the stock will start on its next leg higher. If the PPO rolls over below zero, this is typically where fast price drops occur. The strong Tesla price action over the last 5 days contrasts sharply with the weak market indexes and sector price action.
Amazon
The other behemoth is Amazon. Looking at the PPO, Amazon seems to be one wave ahead of Tesla. When Amazon’s PPO rolled over below zero for the first time in March, the price move was a waterfall lower, losing 30% in a few months. To me, that is the precipice that the TSLA chart is on. This week, the Amazon chart is struggling to continue higher, and it looks like it wants to move lower. The PPO is starting to roll over again while below zero, suggesting a significant weakness. The failure at the green line above the price action suggests the downtrend is still intact.
Being a technician watching charts requires following how the charts change from week to week. There is a lot happening next week if you are interested. I will be presenting at three different public venues as well as the regular weekly newsletter and video for clients!
The Pitch
I talked more about the macro environment on the Pitch, and you can see that recording here.
The Pitch
Upcoming Presentations:
I’ll also be presenting across a wide array of topics next week.
Osprey Strategic Overview
On Tuesday – I’ll be presenting on how the Osprey Strategic approach works to avoid the downside. You can register here for the live presentation on September 20th at 1 PM ET.
Enhance Your Investment Mindset
Traders Exclusive Presentation
On Wednesday – Traders Exclusive – September 21st at 1 PM ET.
Wolf Financial Twitter Space
On Thursday I’ll be on a Twitter Space with Wolf Financial – September 22 at 3 PM ET
It is an important time to keep focused on how this market resolves itself. I have a bunch of things I’m watching and I’d be excited to provide some insights as to how we examine the markets. Try the various subscriptions available at OspreyStrategic.org for as low as $7.
Good trading,
Greg Schnell, CMT, MFTA
Welcome to Osprey Strategic
Nearly a Decade of Experience in the Financial Markets
Greg Schnell, CMT, MFTA, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and recent winner of the CSTA’s Technical Analyst of the Year. He is an active member of both the CMT Association and the International Federation of Technical Analysts.
Explore Greg Schnell Special Pricing Save $363.00! – LEARN MORE
BREAKOUTS, MOMENTUM PLAYS, & BOTTOMS
ATD.TO – Alimentation Couche-Tard, Inc.
BEP/UN.TO – Brookfield Renewable Energy Partners LP
BIPC.TO – Brookfield Infrastructure Corp
CMG.TO – Computer Modelling Group Ltd.
IAG.TO – Industrial-Alliance Life Insurance Co.
PMET.CA – Patriot Battery Metals Inc.
MOMENTUM ALERT SIGNALS
PAST ARTICLES
Send Your Profits Soaring: A Crazy View For Success
A month ago, the Nasdaq Chart was in the bottom right corner. Tech layoffs were being announced, and the CEO/CFO/CIO teams were preparing for a terrible 2023. A month later, the market looks almost silly, …
Semiconductors Like To Lead | Greg Schnell, CMT | Market Buzz (01.18.23)
The market has had a strong start to 2023 and numerous indicators have broken out above bear market levels. Greg walks through some of those charts that he shares with clients. The PLUMB system created …
News, Breakouts, Momentum Plays & Bottoms – January 13, 2023
MY JOURNAL FOR FRIDAY – JANUARY 13, 2023 NEWS, BREAKOUTS, MOMENTUM PLAYS & BOTTOMS Trend following, risk management & long term survival w/ Jon Boorman (stock trader) EP 043: Buying stocks in uptrends, managing risk, …
SetYourStop Workspace
The main focus of the SetYourStop Slack workspace is the momentum scanner that was developed to trace abnormal volatility in the Canadian equity market.
Our proprietary momentum scan system searches for abnormal volatility which flags the urgency of buyers. It was designed to signal the potential of momentum coming into an underlying name or sector. The charts issued are to be used as indicators only, not a trigger to buy or sell.– Disclaimer
Once a chart is received, systematic rules are to be used, implemented by the individual (SetYourStop nor ospreystrategic.org holds No Responsibility for one’s actions as the charts given on SetYourStop and ospreystrategic.org are to be used as indicators only and not a trigger to buy or sell) to define and manage risk. Stop-loss orders are an important tool to negate any false signal. The goal is to let winners run while using trailing stop-loss orders to preserve gains.
Let Us Do Your Homework (With Full Website Access):
- Weekly GregSchnell newsletter that will feature his top ten charts of the week.
- Weekly GregSchnell video which summarizes the major moves in the global markets.
- Vital GregSchnell that can be quickly look through with his top 30 charts at any given time.
- GregSchnell Monthly conference call that is recorded and saved.
- The Daily Setup watchlist of stocks that are signaling the potential of upside momentum.
- The daily SetYourStop blog (News, Breakouts, Momentum Plays and Bottoms).
- The SetYourStop Workspace.
- Much more!
THIS IS NOT A STOCK PICKING SERVICE. THE WORKSPACE HAS BECOME MORE LIKE A COFFEE SHOP OF CLOSE FRIENDS SHARING IDEAS.
Most Traders Tend to Overthink. It’s Time to Remove Noise, Remove Emotion, & Learn How to Define Your Risk. Become a Robot!
Definition: Systematic trading (also known as mechanical trading) is a way of defining trade goals, risk controls and rules that can make trading decisions in a methodical way.
Whether you’re a trend follower, swing trader or penny scalper, the SetYourStop workspace will provide you with trading ideas.
We discuss charts showing the potential of momentum as they appear on our radar with the goal of becoming the most interactive community in Canada.
Join the SetYourStop crew in the Slack workspace today.
The workspace is an exclusive interactive live community of traders ranging from beginners with small portfolios to seasoned veterans placing large bets. It’s an ongoing source of trading ideas and market dialogue mixed with education. The SetYourStop crew regularly joins the conversation to give feedback and share our trading ideas with the community.
Please read before subscribing: I’m Not Your Guru
Access the Workspace
Choose the Subscription Plan that works for you:
30 Day Trial
Only $7 USD
Monthly
$79 USD
Our monthly plan is just that, a no-term and no-commitment subscription with flexibility and all the benefits.
Quarterly
$239 USD
Subscribe to our quarterly plan, pay once and enjoy all the benefits our membership offers
for 90 days.
Annual
$860 USD
Save money while experiencing the full benefit of our membership for 365 days of unbeatable content.