05/23/2020 Weekend Update

[tsf]

TSF, I generate the Yahoo chart from the links below the chart.
I make the chart a line chart, then I left click on "SPY" and change the line color to white.
Then I use windows snip to copy into paste into paint shop pro.
Then I use the fill command to generate the red and green long short rules

I only did to illustrate the rules. you don't need to do it every time.

Thank you, jademann, for your ema(4) ema(8) chart and your great educational website.

[jademann]

TSF, welcome. It is total chaos at the moment and a lot of dated stuff. Anything that looks remotely intelligent I add.

Warning: I used the 4ema and 8ema again myself about a week ago because it looked like it had broken down but it was saved by the BBs.


The latest will be this link, which seems to me to be a chart of bagholders

https://robintrack.net/symbol/AAL

[QED]

Does anyone know when "Trades with cats" will start posting on Cobra's site again?

[JFR]

My take is we will be up trending until November election with a few well placed scary drops thrown in when needed.
... As I am writing this next paragraph I am at a loss for any word other than “ethically” - ethically we should be in an economic crash headed for a depression. Massive unemployment, mortgage defaults, bankruptcies, massive hits to productivity, etc., at least that is what my Econ Degree points to. ...

Economics is my background also. Leading to analysis of cause and effect, fundamental analysis, etc. Before computers, that is what one relied on. I pay attention to what it going on, still read a lot, et cetera, but in regard to the markets I tend to watch the charts. They answer many questions. Some would say it is all reflected in the charts. For me the internet has changed the game.

1der, trying to analyze made me poor for a decade. The only thing that works for me are charts and ignoring when things are absurd.

And there is truth in that too. Paralysis by analysis. Any golfers here? The more one analyzes the worse your game can get. We have to work to keep things simple. The more one can get it to an "instinctive" level, the better it is.

As 1der said: ''Have a great holiday and huge THANK YOU to Cobra and all who are on this board sharing/contributing. Man, it has been lots of years!

Be safe and aware/considerate of others. Peace.''

And now to look at some charts ...

[JFR]

ES daily. Poking its nose above the resistance level.

[JFR]

ES 5. Getting squeezed between resistance and the EMA 20.

[JFR]

Overnight/weekend gap up on ES, NQ, YM and RTY. In some ways this market reminds me of a Dracula movie. No one has put a stake through its heart. It will not die, as it seems to me, it should. But there is so much money looking for a place to go. Very strange times. And with the "opening," the end of the "lockdown," it is "party 'til the bomb drops," hang the consequences, especially in the USA. Renegade spirit. Just in my opinion, on a quiet weekend.

[JFR]

TSX Composite.

[JFR]

https://www.cnbc.com/2020/05/12/young-i ... -risk.html

Young investors pile into stocks, seeing ‘generational-buying moment’ instead of risk
PUBLISHED TUE, MAY 12 20209:43 AM EDTUPDATED TUE, MAY 12 20207:01 PM EDT
Maggie Fitzgerald
@MKMFITZGERALD

[JFR]

https://stockcharts.com/articles/tac/20 ... e-990.html

Top Advisors Corner
At the Edge of Chaos: Who's the Greater Fool?
Joe Duarte | May 24, 2020 at 05:10 PM

As we head into Memorial Day, the official start of the so-called "summer doldrums" and the often elusive "summer rally" season, investors should consider if the same old rules apply to the stock market in the Post New Normal. And here is why. Recent trading patterns and data suggest that the recent stock rally has been mostly due to an influx of money from retail investors, namely young people using their online trading apps and, in many cases, moving stimulus money into the stock market, as institutional investors who initially panic sold in response to COVID-19 have stayed on the sidelines, missing the rebound.

So the big questions are: what happens if the individual retail investor is right for once? What if the worst is actually over? And what will happen to stock prices if institutional investors decide to play catch-up? By the same token, there is also the possibility that the old order will return and the recent rally fades, leading to a resumption of the downtrend and yet another massacre of retail investors.

And one more excerpt ...

Nevertheless, the bottom line at the moment is that institutional traders are not their normal selves these days. By sitting out the recent rally, they will have to either stay out until the market falls again or play catch-up and buy stocks in order to keep their clients happy. If they do the latter, then the stock market will likely make significant gains as they pour money in, due to fear of missing out on whatever is left of the rally. If they don't, then things could get very interesting.

Certainly they are not giving us any clues. But some of their problem may be due to their reliance on computer trading algorithms, which base trading decisions on headlines without balancing them with field observations. In other words, as the headlines darken, institutions may stay away from stocks.

Meanwhile, people who are out and about and applying the old Peter Lynch "kick the tires" investment method may see that the world is trying to bounce back and, consequently, may be willing to take chances on the stocks of companies which seem to be doing business. This would be especially noticeable in the price of any stock if the institutions aren't around to challenge their assumptions and actions.

What that means for traders and investors is that we continue to look for stocks with favorable chart patterns and solid fundamentals, while, as usual, keeping an eye on the general trends of the market as we manage risk with position size, hedging as needed and profit-taking periodically on those stocks which reach our price targets.

Finally, it's important to recognize that the pendulum may be swinging, at least temporarily, and that the world is truly changing. All of which means that we really are in uncharted waters now - those who adapt will survive, while those who fail to recognize the evolutionary process that is taking shape are likely to be left behind.