Posted in
Money Calendar
By: Tom Gentile
on October 9th, 2024
Can the Financial Markets Drift Higher into Election Day?
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I’m no market timer. I tried that in the past and I found out I am better off NOT trying to time the markets. I trade time frames based on my technical analysis, which a primary part of it is my seasonal pattern research that I am able to accomplish with my powerful scanning tool, Money Calendar.
Realize I am not saying to get long the markets right now. There is a case that can be made one should already be long this market. It’s to that perspective I offer this analysis on the SPY.
The Wave 5 Price Zone (Time and Price Projection to some) shows the top of that zone a price of $585.43. As long as no news comes out that shocks the market SPY has a chance at inching up there at least up until election day, when there is a chance the ‘Buy the Rumor – who will be President, Sell the News – who IS elected comes about.
To your success,
— Tom Gentile
Market in Focus – United States Oil Fund, LP (USO)
I am highlighting the United States Oil Fund, LP (USO) to emphasize that market timing is not for me. It may be for you and others, but I and many others I know try to stay away from trying to be a market timer.
Tensions in the Middle East have going on for quite some time.
The deemed First Phase of conflict between Iran and Israel stated up in April of this year and it lasted a bit over two weeks. The Second Phase kicked in this July 31 and is considered still ongoing.
I will grant there are times in this ordeal where oil and oil stocks have popped higher on fears these concerns would tighten the oil supply available and based on a scarcity of oil it would spur on demand and prop up price; which could lead to oil companies making more and share price increasing.
But look at the chart and even though there may be times prices pop for a bit, the overall trend in Oil from mid-July until now is down.
Tools and Observations – A Lesson in Serendipity
Now that you have read up on my lesson plans the past few weeks on how to create custom list in the tools I can speak to how you can use the various scans in the software to find potential trade opportunities.
One can take the XLK, which is the Technology Select Sector SPDR Fund, and run that list through scans like the Moving Average Crossover Scan, Candlestick Scans or even Darknet to name a few.
Moving Average Crossover Scans
Log in and find the button for the Moving Average Scan in the panel for ‘Contrarian Trader.’ Click on it.
When you click on it you open the screen, and you can search for bullish and bearish opportunities based on a shorter-term Moving Average crossing above or below a longer-term Moving Average.
The image you see next is the parameters box for the scan to run.
The List I placed in the ‘Moving Averages Stock List’ is the XLK. This is not going to look for a crossover in the XLK itself, but on any stocks that are in the XLK.
My great friend and mentor George Fontanils loved using the 10-30 moving average cross so that is what I set up in the image above. Click Search and if any tech stocks have a crossover set up it will show up. Today based on closing price data here are the results:
I opened a separate tab for the tools so I can bring up the chart with the simple moving averages (SMA) on it to show you the cross (even though the SMA’s are tucked behind the candles).
Candlestick Scan
When you first log in you can do this process or if you are logged in you can do this process:
Stocks > Stock Rankers > Candlestick Stars (you can do Candlestick Doji if you want).
Once again, I reiterate that I am not looking for a candle pattern on the XLK itself.
I am looking at the stocks in the list of holdings in the XLK and seeing if a candle pattern is available.
Choose any of the scans or run the search on each and click Search.
Todays results for any Two-Day bullish Patterns: Kicker or Piercing Line is as follows:
The next image you will see is a zoomed in chart (20-days).
This is done to show more clearly the candlestick pattern that met the scan criteria.
It is a Piercing Line on GoDaddy, Inc. (GDDY).
Next and last for now is…
Darknet
Darknet is what I use to find securities fitting a contrarian style of trading.
It is looking for a security (or multiple securities) that have pulled back in a trend (usually up) and is hitting a cluster of at least 3 moving averages and looks like it is poised to bounce higher from that stack of moving averages.
You can run Darknet on a single security or on a list as we have done thus far.
Either find the Darknet icon or login and go Home > Darknet Signals
Usually, a list will populate with 1 or more candidates that meet the scan criteria. You can see the message: No Stocks in Selected List with Darknet Bullish Signals.
That means there are no fresh / now setups.
You can see I placed a 10 in the box of ‘Num of Past Days Displayed’ in the event a signal happen in the past number of days up to 10 that might still be worthy of consideration, but there were not.
I still clicked on the hyperlink box for the ticker ENPH
Now here is where the word ‘Serendipity’ finally comes in to play.
Serendipity – Definition: the faculty or phenomenon of finding valuable or agreeable things not sought for.
To me that is the same as ‘getting lucky’ or as my right-hand man with my company Jay Harris says, ‘It’s like going to the store for a gallon of milk and Oreo cookies are on sale.’
Look at the chart that populated when you click on ENPH.
Notice the two yellow boxes capturing the 15 or so point moves on ENPH that happen over a two week or thereabouts time frame.
Here we were looking for a fresh opportunity for today and this could actually be a stock that goes in to your watch list (maybe more specifically, your Darknet watchlist) knowing that it has a habit of trading higher off a Darknet B signal and it typically takes a couple of weeks to work out.
Serendipity!
To your success,
— Tom Gentile
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