Rob’s Big Picture Focus Points For The Stock Market

Welcome back everyone! As we go ahead and wrap up the week and look into the next week and beyond. Let’s take a look at these markets from a little different perspective tonight. We’re actually going to look at them from a monthly perspective, because the question I’m getting is, “Rob is it over? Is it done? What should I do here?” There are a lot of ideas flying around and nervousness out there. I want to give you an idea of what to keep an idea on as we go into the last 5 trading days here going into next week. With that being said, first things first I’m going to be paying very close attention just like I do on daily charts. When I’m trading intraday, those daily charts as well as the intraday charts are very important to me. On an intraday basis I’m looking at the 2, 5, 15 minute, hourly and daily charts. If I’m a swing trader I’m going to be focusing primarily on the daily and the weekly charts, and if I’m a long term investor I’m going to be looking at the daily to a small degree, but mostly the weekly and monthly charts. So as we take a look at the monthly charts here. A couple of things I want you to look at.

First things first with the NASDAQ. It is at this time above the speed lines, but even if we were to close down in the speed lines for next month that leaves this market somewhat undecided. Same thing here with the DOW, the DOW right now is at the speed lines and if it closes down in here that leaves this market undecided. Right now the Russell which has been the weaker of the bunch and the leader of this move to the downside is actually underneath the speed lines on a monthly basis. Last but not least the S&P is right at the speed lines going into this final week here ahead. So with that being said if we go ahead and close up above these speed lines going into the last week of the month here. Then I’ll be more looking aggressively for long side trades. We’ll be looking to see if we can continue this trend back up after this little bit of a washout which seemed both particularly on the S&P and the DOW monthly charts. We went in and came right down into their long term initial support levels. As far as the other two we kind of pushed down and then pulled back up all of these charts are making what we call inventory retracement bars if the month were to close right here. Now you’ve seen over the course of time just how important these are whether it’s on a 2 minute 5 minute or 15 minute chart on an intraday basis that I use to win international trading competitions, or whether it’s on an end of day basis that I use for a swing trader options position. With that being said right now even if we close back down under the speed lines on all of these, and next week being a big downward move, there still won’t be any major panic to ensure there yet. We still have the long term supports and the inventory retracement bars act as support until such time that we break down below them. Now if we break down below those lows we’re going to be talking about a whole different story moving into November and into December, but for now we’re not seeing that. The initial things that we’re going to be focusing on both this last week of the month, so where we close above the speed lines on the stock index futures or below. Currently as you can see we’re like right at them on all four stock index futures in their own way, either coming from underneath, right at, or even right above them. So that’s going to be a big deal because I use that as kind of a guide line long or short on an intraday basis. So the same thing is going to be their monthly chart, the long term investors are going to be breathing a little easier if we can hold above those monthly points. We do have a lot of weakness appearing here on various indications which I’ve alluded to throughout the year and that’s continued to keep us under pressure throughout this process.

Those are going to be a couple of things that we’re watching this last week of the month and will be very important to the process, but again for those of you who do have long term investments, there’s not a major panic. Not likely to see those flash crashes, but from a normal stable market condition and investment theory here, these trends are still intact and at such times they get down below these inventory retracement bars for a long term investment perspective I would not be stressed out.

I hope that answers those questions for you. It’s the same kind of concept we have here on the bonds when we bring out the daily. We realized once we got down below the speed lines here, it’s the same thing that I had mentioned. Now that we’re in between the speed lines, rising support and falling resistance this is called a kill zone and this market will bounce back and forth. That’s exactly what we’ve done. We’ve been kind of rocking back and forth with the rising support and falling resistance. That’s on a daily short term swing trade basis, but the same rule would apply with a long term investment. There’s no reason to panic on those monthly charts based on the same analysis I gave you here. Hopefully you can see how it all ties together. You guys have a fantastic weekend, and I look forward to seeing all of you Monday in the Live Trading Room. Take care everyone.

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