Lowe’s … Re-Visited

Mid Session

Spring, To Up-Thrust, Completes

The daily chart of LOW (above), is how it looked one month ago. This report highlighted, certain market behaviors repeat.

Now, we have an apparent up-thrust completion.

There may be other equities in a similar (up-thrust) position as of this post … One such potential is Carmax (KMX).

Opinion:

Successful trading, is a game of attrition.

The LOW set-up, that looks to be complete (for a short position) has probably lost all market participant interest at this point.

The i-phone crowd, looking for the next fix, is not going to wait around and monitor for a month to see if price action follows a well tested set-up pattern.

After things get moving though … they’ll be back, as Dr. Elder states; ‘being both lazy, and late.’

Summary:

We’re not shorting LOW (not advice, not a recommendation) as there’re plenty of opportunities with leveraged inverse funds (again, not advice, not a recommendation).

The point of this update is to show, once again, the market, LOW in this case, has gone from ‘spring to up-thrust’; a repeating price action phenomena.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Set-Ups, that Repeat

Late Session

Wyckoff: ‘Spring to Up-Thrust’

Years ago, while reading one of David Weis’ daily updates, he made a comment to the effect:

‘I can’t count how many times I’ve seen a spring, go straight into an up-thrust’.

His observation stuck with me through the years. Being the engineering type, I naturally wanted to know why.

Why does that market observed phenomenon occur?

Pursuing the question from a data perspective, it became clear that finding an answer, would be a never-ending quest.

I abandoned the ‘data’ idea; but the question lingered.

During that time, observation of the markets proved Weis’ point. Some markets tend to go straight from ‘spring to up-thrust.’

One example that’s taking place now, is CAT:

Another example in the potential set-up phase is LOW:

The reason for the phenomenon remains open. Obviously, the market’s going to go where there are orders.

It’s likely, under the right price action and psychological conditions, when support is penetrated enough (amateur) participants sell and then sell short.

Those undisciplined traders continue to move their stops higher (against their trade) as the the market moves higher; ultimately taking them out at the up-thrust top.

How do I know this? Because that’s exactly what I used to do.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Real Estate Breakout … Down

Interest rate sensitive markets are on the move … lower.

Updated 3:02 p.m. EST, as noted below

Fastenal (FAST), Home Depot (HD), Lowes (LOW), Real Estate (IYR), Weyerhaeuser (WY), Homebuilders (XHB), all taking a hit early in the session.

In their own way, there’re interest rate sensitive and related to real estate, construction or maintenance.

Since mid-January this year, real estate, IYR was identified as a potential strategic short opportunity.

Numerous shorts (via DRV) were opened, some exited (not advice not a recommendation).

On February 25th, it was obvious in early trading, this is it.

Reversal at hand.

The last of the shorts via DRV was opened and documented here (not advice, not a recommendation). Now in today’s session, we have a completed wedge and apparent downside breakout in progress.

There’s a lot of congestion to get through before (if and when) IYR reaches ‘free-fall’ territory. A lot could happen between now and then.

Even so, it’s fairly safe to say, price action’s not likely to come back to the IYR session high.

But that’s exactly what it did … and pushed just a bit higher (+0.15-pts).

So, we’ll set the DRV stop at that location (session low) … approximately 9.41; not advice, not a recommendation.

With the above push, the DRV stop will be set at today’s session low (currently 9.39).

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.