Happy Holidays Everyone! For those of you that celebrate Christmas, I hope you had a great one. At next writing it will be 2016. I wish everyone a very happy new year.
2015 was a tough trading year for a lot of traders. If you are in this camp, stay positive and look forward. There is not a trader in history that hasn't had a drawdown. The market has gone nowhere for 12-24 months (depending on what market you are looking at). There were a few great leaders in 2015 like AMZN and the bank sector. If you were talented, experienced and on your game, there was opportunity to have a nice year. There is no doubt about that. But it was an easy year to have a drawdown or to finish down for the year. It happens to every trader noviced or experienced. Learn from it, and then look forward positively. There were traders that got chopped up in 98 and most of 99 and then went up 400-500% in 3-6 months. We very well could be setting up for this type of environment again. So stay positive, get your work in and if you see A trades going forward, believe and go for it.
It was an interesting market week. After "losing" the follow through day, the market had a nice 3 day rally. When the market doesn't do what you think it should do (fall apart after failed follow through day), pay attention. That is a trading rule for many experienced and able traders.
Most of the signs I look at point to my scenario A in my market mosaic; i.e., we are in an intermediate correction, leaders are setting up and we should be looking for a follow through day soon that could be very powerful.
Just to hammer home the potential coiled spring/the market has gone nowhere for a long time theme, here is a chart of the Russell 2000. Nowhere since 1/1/14 (2 years ago!). The IWM also completed the Billy O (the nickname traders had for William O'Neil)) 5 waves down a few months ago. See my previous charts on S&P 500. As Bill O says, stay positive, he has never met a successful pessimist. There might be opportunity here.
Watch list
Here are the updates to my watch list:
VIAV - Completed its 7 week in its double bottom base, started to climb up the right side and has built some RS. The week was too short to show accumulation, but if we had a full week we probably would have gotten one. I am giving you the daily view here. I drew this as part of an ascending wedge, but it doesn't have to be going forward.
N - Continued to hold its RS after a nice rinse and high volume weekly recovery/accumulation the week prior. If you have a Billy O "How to Make Money in Stocks" book, look at Pic N' Save 1979 chart (the base was actually in 81/82). That double bottom base (a double double bottom!) was very similar and had a very similar rinse and high volume recovery at the bottom of the base on the weekly. My stock charts don't go back to 1979 or I would show you. The trendline pivots for N have fallen to 91-94 depending on how aggressive you draw them. 50 day is just above for you pocket pivot watchers.
LITE - had a nice tight 1% week in a potential handle. The handle probably needs more work as previously discussed with QIHU examples. See last week. So far we have a nice cup base, with pocket pivots before it launched up the right side.
I put the positive Wall Street comments for LITE through my twitter feed this week. I caught this news late. But it gives you a summary of some of the fundamental positives that are creeping into this story.
LNKD - had another tight weekly close (1.4%) in an 8 week base within a base. I'd love more tight action or a nice rinse and recovery. Don't fall sleep on this or any other A set ups due to internal worry or macro headlines. QCOM broke out on Jan 6 1999. See past posts or twitter feed for chart. Don't fall asleep here on this or anything that is setting up! Here is updated daily on LNKD.
Happy holidays and new year everyone! Let's get our minds and prep right ahead of this last week of 2015 and the 2016 that lies ahead.
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