stock price trading

stock trading

Stock Trading - Alerts

Add to cart

Premium daily stock trading service by Monica Kingsley. She provides extensive analyses and comments at least 1 time per trading day, usually before the opening bell, plus whenever dictated by market action. The analyses focus on all the key factors essential to determining the medium- and short-term outlook for the S&P 500 futures, spanning over several time frames, credit markets and S&P 500 sectors and ratios. They also capture the key fundamental developments, events and trends in assessing the prospects and health of the S&P 500 moves. This way, you’re kept up-to-date on important developments that far too many investors are apt to miss or underestimate.

Whether you're looking for objective analyses to broaden your horizon / add confidence to trading decisions, or want to get inspired by Monica's trade calls for S&P 500 futures, Stock Trading Alerts are the way to go.

  • Pausing or Not, These Are the Facts Supporting the S&P 500 Bulls

    July 7, 2020, 9:03 AM

    Since Monday's premarket open, the S&P 500 was steadily rising before stabilizing above the mid-June tops. While the index comfortably closed at its intraday highs, can we trust this breakout? While a little breather following the string of five consecutive days of solid gains isn't unimaginable, I think the unfolding rally has legs enough to confirm this breakout shortly.

    I say so despite the uptrend in new U.S. Covid-19 cases that has many states stepping back from the reopening, rekindling lockdown speculations. I say so despite the Fed having its foot off the pedal in recent weeks, which makes for more players looking at the exit door as the rising put/call ratio shows.

    The summer months will be one heck of a bumpy ride, and the bullish picture is far from complete as the lagging Russell 2000 shows. But emerging markets are on fire, not too far from their February's lower high already - Monday's boon in the China recovery story keeps doing wonders. That's wildly positive for world stock markets, including the U.S. ones.

    V-shaped recovery being real or not, corona vaccine hype or not, stocks love little things more than the central banks standing ready to act. And the punch bowl isn't about to be removed any time soon. Let's take the most recent Fed policy step, which was the decision to start buying individual corporate bonds. So far, less than half a billion dollars has been deployed to this purpose - but the corporate bond market is firmly holding up nonetheless, with the Fed waiting in the wings.

    That's just one of the factors going for the stock bulls, and today's analysis will deal with yesterday's market performance so as to form a momentary, spot-on picture.

    S&P 500 in the Short-Run

    I'll start with the daily chart perspective (charts courtesy of http://stockcharts.com ):

    If I had to pick just one chart for today, this one would cut it. Having broken above the mid-June highs, the S&P 500 closed strongly. But it's also true that it has been languishing below 3170 despite reaching this level at the onset of European trading already, unable to extend gains during the regular session.

    Recapping the obvious, stocks are on the upswing after the bears just couldn't break below the 200-day moving average, which means that the momentum is with the bulls now. The daily indicators keep supporting the unfolding upswing, and volume doesn't raise red flags either.

    The breakout above the blue horizontal resistance line stands a good chance of succeeding. That's true regardless of the S&P 500 futures dipping below 3145 as we speak. It's that the majority of signs speak in favor of the upswing to continue, short-term breather to come or not.

    Crucially, do the credit markets agree?

    The Credit Markets' Point of View

    High yield corporate bonds (HYG ETF) are clearly rising in unison with the S&P 500. So far so good, the daily indicators are reflecting that positively, and the volume doesn't smack of an impending reversal. In short, there are no clouds on the junk corporate bonds chart horizon.

    And it's not just investment grade corporate bonds that are powering to new highs. The ratio of high yield corporate bonds to all corporate bonds (PHB:$DJCB) has bottomed at the rising support line connecting its March, April and May intraday bottoms. The question remains whether it will turn higher next so as to support the stock upswing that surely appears getting a little ahead of itself when viewed by this metric alone.

    But it can't be denied that risk is staging a comeback into the market place, albeit a painstakingly slow one.

    Or isn't it that slow when we examine the performance of technology, and other clues?

    Technology and USDX in Focus

    The tech sector (XLK ETF) keeps making new highs, and the volume remains quite healthy and free from bearish implications. The sector continues leading the S&P 500 higher, and perhaps most importantly, its internals have improved yesterday.

    Enter semiconductors.

    While they are not yet at their early June highs, semiconductors (XSD ETF) are within spitting distance thereof. The technical posture has improved with yesterday's show of strength, and as the segment leads the whole tech, that means a lot.

    The flies in the short-term bullish ointment are volatility ($VIX) refusing to stick to its intraday move lower, another black daily candle in smallcaps (IWM ETF) or greenback's overnight upswing attempt.

    Nothing unsurmountable, and definitely not overshadowing improving market breadth in the S&P 500 or the still very low bullish sentiment that can power stocks higher - you know what they say about the times when everyone moves to the same side of the boat...

    Summary

    Summing up, the S&P 500 broke above short-term resistance formed by the mid-June tops yesterday, and the rally's internals keep supporting more gains to come. Importantly, emerging markets and semiconductors sprang to life yesterday. Signs are though mostly arrayed behind the bulls, and most importantly, the credit markets continue supporting the unfolding stock upswing regardless of Monday's intraday wavering that could foreshadow some short-term sideways moves. The key word is could - S&P 500 market breadth is getting better while the sentiment remains too bearish to enable a sizable downswing attempt to succeed. What else can the bulls wish for?

    If you enjoyed the above analysis and would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Monica Kingsley
    Stock Trading Strategist
    Sunshine Profits: Analysis. Care. Profits.

  • The S&P 500 Ride Ahead - Rocky or Not So Rocky?

    July 6, 2020, 8:21 AM

    Supported by another strong ADP non-farm payrolls, the S&P 500 extended its premarket rally on Friday, but it quickly ran out of steam. How concerning is seeing most of its intraday gains gone? That's actually not the only sign of short-term non-confirmation. Should the bulls be getting concerned here?

    There are still more factors going for this rally than against it. In today's analysis, I will present these together with the non-confirmation signs.

    Credit markets are still on the upturn, stocks are undaunted by the rising U.S. Covid-19 cases and hits to reopening plans across many states.

    This dynamic is still at play, and I think the bullish bias to the S&P 500 outlook will deal with the above-mentioned signs of caution in a relatively short order.

    S&P 500 in the Medium- and Short-Run

    I'll start today's flagship Stock Trading Alert with the weekly chart perspective (charts courtesy of http://stockcharts.com ):

    Last week, the S&P 500 rebounded off the 50-week moving average, and closed not too far from the weekly highs. Yet, Friday's attempt to overcome previous two weeks' intraday tops, was rejected. So far rejected.

    While the weekly indicators appear tired, that wouldn't be a concern for the stock upswing to continue. The volume doesn't raise red flags either - had Friday not been a bank holiday, the weekly volume would be more than adequate with its average daily addition. But it must be said that the weekly chart is bullish-to-neutral in its implications.

    The daily chart shows that the bulls were again rejected on Friday at the blue horizontal resistance line. Still, I would not consider the latest candle as one characterizing a reversal - and not only because of the lower volume. The daily indicators favor the upswing to continue, short-term breather to come or not.

    Let's move to the credit markets next.

    The Credit Markets' Point of View

    Friday's candle in high yield corporate bonds (HYG ETF) mirrored the S&P 500 one, and hints at a daily consolidation - yes, more gains will come down the road, and power stocks higher.

    Risk is coming back into the market place - slowly but surely. And it's not just about the PHB:$DJCB (high yield corporate bonds to all bonds) ratio's fledgling uptick from the late June local bottom.

    As the above chart shows, investment grade corporate bonds to the longer-term Treasuries (LQD:IEI) are helping the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio to move higher, and much more still appears to come for both metrics.

    The HYG:SHY ratio supports the stock upswing, but with the S&P 500 at late June highs while the ratio isn't there yet, stocks are a bit extended here. While the charts don't favor a reversal, a sideways consolidation for a few days wouldn't be all too surprising - especially should the credit markets stall.

    S&P 500 Market Breadth, Volatility and Other Clues in Focus

    Both the advance-decline line and the advance-decline volume are moving increasingly positively for the bulls - and they have ample scope for moving higher. Bullish percent index has remained in bullish territory, and is curling higher again. In short, market breadth indicators are improving with a solid potential for more constructive action.

    The favorite volatility metric, the VIX, erased much of its Friday's decline. Is it stabilizing around the June lows, or preparing for a rebound? The stabilization scenario appears more probable.

    Smallcaps have suffered two daily setbacks, and continue lagging behind the S&P 500. That's especially visible in the latter half of June, right after their failed breakout above their 200-day moving average. While the S&P 500 is trading comfortably above it (i.e. support held and thus upswing continuation is more likely), the Russell 2000 (IWM ETF) isn't yet. Positive resolution to this non-confirmation would certainly lift the outlook - and I think it's a question of time merely.

    The USD Index also paints a rather bullish picture for the coming week(s), and the caption says it all. The greenback won't be standing in the way of a more risk-on environment.

    On Thursday, I added these thoughts on the dollar:

    (...) Wouldn't you expect a more veracious move on new U.S. daily corona cases highs? Yeah, cases... That's it.

    Key S&P 500 Sectors and Ratios in Focus

    Technology (XLK ETF) is again moving to new highs, and that's positive for the whole index. Yet, the following semiconductors chart shows that there's something amiss with the strength here (just like with the Russell 2000 message).

    Semiconductors (XSD ETF) are lagging behind, also revealing that we're not in a raging risk-on environment yet. That's also the takeaway from the junk corporate bonds to all corporate bonds (PHB:$DJCB) ratio.

    The consumer dicretionaries to consumer staples (XLY:XLP) ratio shows that the cyclicals (such as discretionaries or materials) are doing fine. Baltic Dry Index ($BDI) is also rising while the defensive sectors (utilities and staples) aren't at their strongest. That's a subtle hint that the bullish environment for stocks is intact.

    Summary

    Summing up, given Friday's non-farm payrolls, the S&P 5000 gains could have been bigger, but the index is still taking time to overcome its late June local tops. Signs are though mostly arrayed behind the bulls, and the credit markets support the unfolding stock upswing. The non-confirmation in Russell 2000 or semiconductors underperforming technology will likely get resolved over the coming days or weeks as we see more rotation into cyclical and riskier plays.

    The greenback isn't likely to get in the way of further stock gains, and I expect it to rather weaken as the recovery narrative gains more traction - and if you look at emerging market stocks, they've done better over the June consolidation than their U.S. counterparts. Encouragingly, their Friday's upswing has already overcome its early June highs - their outperformance means more gains for the U.S. stock indices as they explode higher again.

    If you enjoyed the above analysis and would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Monica Kingsley
    Stock Trading Strategist
    Sunshine Profits: Analysis. Care. Profits.

  • 4 th of July Fireworks in the S&P 500

    July 2, 2020, 9:01 AM

    The only time the bears appeared during yesterday's trading, was at the very U.S. open. A steady move higher followed, with the final hourly upswing erased 15 minutes before the closing bell. How concerning is this?

    I don't think it's a setback worth much mentioning. Yesterday's ADP non-farm employment change hints at solid non-farm payrolls today. Credit markets are on the upturn, and stocks are undaunted by the rising U.S. Covid-19 cases. S&P 500 market breath is improving - but the Russell 2000 declined yesterday.

    Still, I think that's no reason to be worried - and not only because of the low volume decline in smallcaps. The mid-May parallel of what happened after a period of credit markets' underperformance, is hiding in plain sight...

    S&P 500 in the Short-Run

    I'll start with the daily chart perspective (charts courtesy of http://stockcharts.com ):

    Wednesday again brought us follow-through buying, this time with an upper knot. Is that a warning sign of an impending reversal? I would rather chalk it down to squaring the risk towards the end of the session. The joint examination of daily momentum and volume hints at a short-term pause merely - a daily affair.

    The way I look at things, is that the upswing today's trading would likely bring, stands a good chance of overcoming yesterday's intraday highs on a closing basis.

    That's because yesterday's non-farm employment change came in below expectations, yet stocks easily took off to new daily highs. And I expect the same dynamics to play out later today as well. There is not much new waiting in the wings to spoil today's picture.

    Let's check the credit markets next.

    The Credit Markets' Point of View

    The daily candle in high yield corporate bonds (HYG ETF) mirrored the S&P 500 one, and the low volume here shows that the sellers are nowhere to be really seen. This low a volume is consistent with a daily consolidation, which means that more gains are around the corner. And these gains would work to power stocks higher.

    Risk-on is back. Slowly at first, as the preference for investment grade corporate bonds to the longer-term Treasuries (LQD:IEI) shows, with more still to come thanks to the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio.

    S&P 500 Market Breadth and USDX in Focus

    The weekly chart shows the repair in both the advance-decline line and the advance-decline volume. After their recent plunge, they have ample scope for moving higher - they are just around their neutral readings when Thursday's closing prices are taken into account. Bullish percent index hasn't dipped as low as back in May, which illustrates that the bulls are stronger this time around.

    And that paints a rather bullish picture for the coming week(s), just as the USD Index situation does.

    The swing structure of this relief rally appears to have run its course for the most part. To me, the chart's message is that a more risk-on environment is on the way - not a deflationary crash. Wouldn't you expect a more veracious move on new U.S. daily corona cases highs? Yeah, cases... That's it.

    Summary

    Summing up, yesterday's gains extended Tuesday's upswing with full support from the credit markets. The way they're turning a page over the recent prolonged weakness, points to more appreciation potential as the HYG:SHY ratio has plenty of room left to catch up with momentum to the more bullish LQD:IEI performance. Stock market breadth is improving, with both advance-decline line and volume sending positive messages amid bottoming bullish percent index. Technology and healthcare are leading the charge.

    The greenback isn't likely to get in the way of further stock gains, and I expect it to rather weaken as the recovery narrative gains more traction - and if you look at emerging market stocks, they've done better over the June consolidation than their U.S. counterparts. They could even start to outperform - and should they do so, that also means more gains for the U.S. stock indices as they explode higher again.

    If you enjoyed the above analysis and would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Monica Kingsley
    Stock Trading Strategist
    Sunshine Profits: Analysis. Care. Profits.

  • Stock Trading Alert #2

    July 1, 2020, 1:29 PM

    Available to premium subscribers only.

  • The Mid-May Deja Vu in S&P 500

    July 1, 2020, 9:24 AM

    After a slight hesitation in yesterday's premarket, the S&P 500 hasn't much looked back since. And importantly, the credit markets - my biggest concern - had finally caught a bid. Their own reversal was less pronounced, making one question the corporate bond bulls' resolve right after the Powell & Mnuchin testimony, yet the bulls got their act increasingly together as the session drew to a close.

    The markets gave me an answer as to both credit market ratios' dissonance, and also to the high yield corporate bonds to short-term Treasuries underperformance - yes, it's been fake weakness just as in mid-May, and not a (temporary) bull trap setup.

    This bullish price action with ducks getting increasingly in a row, happens against the backdrop of new U.S. corona cases high, dr. Fauci getting more screen time and rising media fear mongering. Yet stocks are acting tough - will they keep taking a lesson from the early April resiliency?

    S&P 500 in the Short-Run

    I'll start with the daily chart perspective (charts courtesy of http://stockcharts.com ):

    Things look pretty neat on the daily chart, don't they? But the key point was credibility of yesterday's upside move - and as the day progressed, the chips started falling increasingly more into the right places.

    Today's analysis will be different, because I would love to highlight the many throughful opinions reaching me. They are countless, and I am deeply thankful for all of them. I'll quote three arriving during yesterday's U.S. session:

    Price action of epicenter stocks which went up yesterday but being sold off partially this morning show hesitancy and cautiousness which shows investors are not yet convinced of the market which agrees with your view. One positive is HYG is rallying today. The chart seems to show 3 wave down correction is completed after 5 wave rally up. Now I am wondering if HYG is ready to charge ahead again. If so, I would think rest of the market may follow. If not, side ways to down market will continue I would think. Low putcall ratio still worries me but record high short positions by large speculators is encouraging. Let's see who wins out in the end.

    Such was my answer still before the testimony:

    Yes, it's a question of whether we're looking at an upleg in trading range, or a fledgling uptrend renewal. HYG volume is likely to be respectable today, so it's a question of the Powell testimony effect, and tomorrow's ADP non-farm employment change on the fundamental front (reaction to these). Indeed, it hinges on the ability of HYG to turn around, and more puts around would make the situation clearer, too. I also agree with the shifting perceptions of who the smart money is.

    Fast forward to the testimony aftermath. We got wavering stocks and junk corporate bonds, but the downside move was relatively limited - and notably, signs from other markets started to form / confirm a coherent picture.

    That's when the below comment came from a reader I hold in high esteem. See the great capture:

    Bull/Bear ratio is at historic lows which is bullish. Price action across indices showing breakout out of a declining channel. Market internals are bullish. Based on RRG of SP sector, cyclicals are strong and defensive are weak - not what you expect from a weakening econ based on Covid-19 bear thesis. Still. Bullish

    That's a valid point about the bull/bear ratio - but it's equally true that the bulls have been in very limited supply for quite a few weeks in a row already (less than 25% bullish). But the put/call ratios haven't spiked, which made me think that the bears aren't just yet putting the money where their mouth is. In other words, that the sentiment can get even more out of balance before moving away from such extreme readings.

    Yes, I've not been drawing any declining lines or wedge-like structures that connect the June tops in either the S&P 500, the HYG ETF, or the HYG:SHY ratio. On one hand, that's because I didn't get an improving volume on Monday signalling the S&P 500 getting ready to break out higher (and yesterday's wasn't totally stellar either - but hold on, that's just one piece of the puzzle to be outweighed by many others later on), and the HYG ETF was still acting weak on Monday.

    But as I wrote in the article's opening, that proved to be a false sign of weakness, which was however still in danger of persisting after the Powell & Mnuchin testimony. Back then, it didn't look like junk corporate bonds would want to break above their resistance. Convincing volume wasn't there, and neither was price action (unlike the price action in stocks). A part of the red flag was still there - would that be an opportune setup for the bulls who haven't yet bought into this reversal come?

    After all, it's a matter of risk-reward ratio, and perhaps a pullback could come in the overnight session. But the entry to the final hour of yesterday's regular session gave me the answer that the momentum is about to get running the other way, and a pullback might not come.

    Next, take market internals. Yes, market breadth has seen an improvement on Monday, and Friday formed a bullish daily divergence on the advance-decline line - but the advancing-declining volume didn't. Zooming out, the latter still looked coming off its early June highs - perhaps plateauing, but I didn't want to jump to that conclusion yet.

    Then, in Monday's article, I also noted that we're seeing a rotation into growth plays, and that they're holding up better than defensive sectors such as utlities (XLU ETF) or consumer staples (XLP ETF).

    The facts that tipped the scales for me, were improving post-testimony performance in the stealth bull market trio of energy (XLE ETF), materials (XLB ETF) and industrials (XLI ETF). They were all pretty resilient in the face of the post-testimony S&P 500 downswing, which bodes well for their renewed ability to help pull the index higher.

    One more note on the defensives - this time, it's about the ratios. Both the financials to utilities (XLF:XLU) and consumer discretionaries to staples (XLY:XLP) ticked higher - another helping hand from the sectoral heavyweights (financials, discretionaries) is more than welcome, and points indeed to cyclicals catching breath again.

    Last but not least of the tipping-the-scale facts, comes the Russell 2000 (IWM ETF). With its own upswing, it's approaching its mid-June highs, while the S&P 500 doesn't. That means we have two days in a row of strong outperformance - again looking at the mid-May parallel, this points to us having witnessed false weakness in IWM ETF that was still however unable to challenge its early June lows - that's a bullish divergence.

    So, the market served me its answer to the below yesterday's question:

    (...) Are the bulls strong enough to make up for yesterday's suspiciously low volume? Should they be earnest about this reversal, they better step in fast - and at higher prices as well, so as not to make yesterday a bull leg in a sideways-to-down trading range.

    That was quite a story the market tape has been telling us, wasn't it? Best of all, it's not apparent from one magic ticker, timeframe, or indicator - and is instead about the willingness and readiness to make the move when still faced with a less favorable array of signs than can be (and was) the case a few hours later on. Congrats to joining the bull party earlier, it has paid you not to wait for the increasing likelihood of my key concern (the credit markets) resolved positively - it has paid you off more than it did to me.

    This third faithful reader captures it nicely, don't you think?

    When you bought some good stocks, it is just like you fall in love with your gf....when your gf asks you do you trust her, you must reply "yes i trust you till the end of the world"

    Let's quickly check some credit market charts next.

    The Credit Markets' Point of View

    Here you go, that's the chance of a high yield corporate bonds (HYG ETF) close noticeably higher that I have been waiting for during much of yesterday's session before making the jump. It's here, and appears promising for the days to come.

    Another fitting answer here. The investment grade corporate bonds to the longer-term Treasuries (LQD:IEI) ratio is leading the high yield corporate bonds to short-term Treasuries (HYG:SHY) higher.

    Both stocks and the HYG:SHY ratio are moving now in tune with each other, with solid chances of the upswing being extended today and later this week - and in the HYG ETF too. It indeed appears we're in for a replay of the May setup.

    S&P 500 in the Long-Run

    The monthly chart reveals that despite recent turbulences, the run higher is alive and well, not seeing signs of distribution. How many candles will it take for June's upper knot to be overcome?

    Summary

    Summing up, Monday's upswing got the powerful ally during yesterday's session, putting to rest the bearish signs not too hard to come by earlier. Crucially, the credit markets appear turning a page over recent prolonged high yield corporate bonds weakness, market breadth stands good chances of seeing more improvement soon, Russell 2000 and the stealth bull market trio are pointing higher. Best of all, the Fed didn't do much, corona scares haven't been acted on broadly, and the market appreciates the real economy recovery it's getting. Another lengthy consolidation post the rising May-June wedge appears over now, and stocks ready to explode higher again.

    If you enjoyed the above analysis and would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Monica Kingsley
    Stock Trading Strategist
    Sunshine Profits: Analysis. Care. Profits.

1 2 3 4 5 6 ... 360

Gold Alerts

More
menu subelement hover background