Home Trends Weekly Market Report 07/16/21

Weekly Market Report 07/16/21

by smart

[Music] hello investors and traders and welcome to the weekly market report i’m aj monte and this is a one-year daily candle chart of the russell 2000 etf ticker symbol iwm and if you watch my report from last week you’ll know that this diagonal line here that i drew last friday was my forecast line with the end of that line right there being my target 217 38 so as you can see like clockwork the market went right to that target and here we are right now it’s almost as if the market was following that line now we know that’s not the case but this is again another testament to how powerful technical analysis is as a forecasting tool so what does this mean for next week well interestingly enough if i take a step back you’ll see that we have a key support level down here that is maintaining quite nicely and as i erase all my forecast lines you see we hit those so we don’t need those anymore we have a support level that’s more or less intersecting with these lows and we are approaching this low right here now if you’re a member of our option oracle or equity oracle trade alert services you will have heard me say that we’re going to be taking action should iwm drop below 210 now why is 210 such a significant number well that’s because a close below 210 would bring it below this low and now we are more or less breaking out to the downside of this topping pattern that i originally called on may 21st and again to repeat because i have to keep repeating for the record on may 21st right back here i said that i was calling a top and i was not calling a high i was calling it top and i also said takes about three months for that topping pattern to complete now next week i think we’re actually going to bounce a little bit i think we’ll go lower and bounce but i think this is more or less the beginning of the end of this particular trading range because if you go three months out from my original call of the top you know we’re approaching july 21st and then we’re getting into august 21st out here and so by then the markets could already be below this key support level that i pointed out to you here and then what does that mean well it means that the markets are now breaking out and the former support will start to turn into resistance this is a concept that i talk about quite often it’s role reversal if i go to a weekly chart you’ll see this role reversal is when a former support level once broken turns to resistance i’ll draw a little line here again support with an s support again these are all weeks each one of these low shadows more or less bounced off of that support and here is support if support breaks right here and we go a little bit lower the support will turn into resistance and that’s why below 210 we’re going to be getting at long positions especially for the option traders and we’re going full speed ahead grizzly bear mode to the downside so we still have time again but the sands in the hourglass are quickly falling and we’re running out of that time that so many people have counted on so what i would say is this is more or less a warning for those who are the buy and hold types to i’m not telling you get out of cash and you know liquidate your whole position at least not yet but i do believe that it’s a good idea to start moving into a position that gives you opportunity on the way down and therefore embracing risk management strategy is a really good idea right now really good idea so here’s my forecast for next week i think we’re going to go down just a little bit more and then i think we’re going to bounce again a little bit more we get we got a slight drop i’m expecting on monday and tuesday but because we have a drop in volume today i mean this is a big down day but it was on lower volume than yesterday and you can see that the cci is starting to turn up so i think we go just a tad lower monday possibly tuesday and then i think we’re going to see a little bit of a bounce there right so don’t be shocked by that that bounce doesn’t mean okay everything’s all good now it just means that you know we could be bouncing off of support and we’ve got some bottom fishing going on but that’s going to be my forecast for iwm giving you a number target for those who are option traders 219.01 that’s iwm now if we look at the s p s p 500 right there we are on our way to that target level now this is different than the iwm because if you notice the volume here the volume is increasing on the way down and the oscillators are not turning up at all in fact just the opposite down here as i magnify that the cci is just about to cross below that zero line aka the momentum line so i think that the s p is going to wind up lower next week and all i’m going to do is extend on this right there i’m going to extend that to the right to give the angle but this target right here is going to be a support level which there as well will be a role reversal remember former resistance broken turns to support too it goes both ways so i think we’re on our way down here this is going to be my target for the s p 424.4 and then we’ll have to see whether or not we continue lower to fill some of these gaps in here i normally don’t go that far out with my line for forecasting but that’s what i am going to put on there for you right now because this is really a topping pattern that’s close to completion so that’s spy now we look at the vix which for the most part is inversely related to the s p i left this horizontal line up here as a hard line target right there i’m not doing anything with this line whatsoever because i think we’re going to hit that at 21.63 i’m just leaving this horizontal line as my target until it hits and then we’ll have to readjust notice what’s happening in the vix today we actually this was a red candle at one point and it looked like oh boy okay vex is taking another dive lower but it didn’t about face i think investors are very confused about the direction the fed is heading i don’t think they even know how to control inflation i think the worst thing again this is my personal opinion and professional opinion i don’t think it’s a good thing to let inflation just run its course because that could be pretty ugly and with the state of our world right now with the covid variant the other the delta variant coming out i think this could be a real threat next month i really do i mean we’re expecting workers to go back in september but if this reporting in the media continues to push the panic button on the delta strain then we could be in a position where investors say you know what i’m not going to take a chance and hold on at this point like i did you know last january february march i don’t want to go for that roller coaster ride again so you might have a lot of people just moving the cash as a safe haven until they figure out what they want to do that in and of itself the action of moving the cash could push prices lower so that’s the vix again reiterating that target of 21.63 all right now let’s go to the diamonds dia look at that amazing it’s like the market’s following that line once again increase in volume on the way down on guess what i’m going to magnify that for you some of you already know what i’m going to say that’s a bearish engulfing candle we had a bearish engulfing candle here and that panned out to the downside in a big way we have another very pronounced bearish engulfing with increasing volume on the way down gap below the market oscillators are crossing with sell signals here and here and so we have a gap below the market therefore i’m not moving that forecast line i’m holding the target just like that i think that gap is going to fill as soon as next week and then we’ll have to see if this moving average winds up acting as a support level again still too early to tell i have not changed my stance one bit at all again maintaining that that position of risk management and helping people learn how buy and hold may not work very well in this scenario moving forward okay so that’s the diamonds again for the target i’m giving that at 3 4 10 keeping that in place we almost got there but not not yet i think next week will be the week for that all right let’s take a look at cues and then i have one more special announcement to make the cues are on the way down we got the red candles showing up we have a slight drop in volume so it’s going to fall more or less in the category of the russell but notice the oscillators down here we have some conflicting signals where normally a drop in volume like we see down here tells us that if the price is moving lower and the volume is dropping the sellers are losing momentum but the momentum indicator down here crossing the zero line on the cci it really conflicts with the volume so i think i’m going to go with the oscillators on this one because we’re moving towards this moving average here and we’ll have to see whether or not that maintains as support so i’m going to do right now is i’m just going to draw a horizontal line on this one from that target just like that and then i’m going to move my target over to make sure that we’re matching exactly i don’t want to miss out on that so i’m going to duplicate that same angle and everything just like that putting it right to the target price and then we’re going to drop it just like that so i can get rid of this one still maintaining the downside price target the option traders are looking for strike prices that would be it right there at 3 49 16 again still forecasting lower and remember we have a gap way down here it’s still too early to call that one but i do believe there’s a very high chance that over time that gap is going to fill so keep an eye on cues remember i show this almost every week you got to look at this this is the monthly chart for the qs shooting star see that negative divergence again look at the monthly chart on iwm check that out you want to see a bearish engulfing candle it’s not just engulfing last month it’s engulfing the past four months of price action so if you you had bought any time over the last four months and still holding a long position on those shares you’re losing money and investors don’t like to lose money they get really upset when that happens and they start to get a little antsy they get unsettled and they say you know what let me move more into cash i don’t want to suffer more losses here and that’s when the dominoes start to fall now i normally don’t comment on silver i’m not going to do this on a regular basis but i am showing you that we have a very nice pennant slash wedge forming in the silver markets this is the monthly chart and you can see even though we had a down day today we have higher lows while the highs continue to maintain horizontally this is known as a flagpole right if i condense this this is actually my price target right here breakout of this pattern could result in silver going to 43.79 now why am i mentioning that well i’ve been asked by the market rebellion folks to put together a series of tweets and social media posts where each week i will be reporting on the silver market and what i’m seeing this is just a snapshot of what’s to come and this comes to us the source here is metals focus and you can see the change in production in silver over the past year this is not by the way including 2021 just from 2019 to 2020. the top three silver producing countries right there are showing dramatic drops in their production particularly peru look at this in one year that production dropped 19 now that’s a heavy weight there in the world of silver production but overall the total number of ounces produced has dropped in 2020 from 2019 to the tune of six percent that’s part one so if you paid attention in economics 101 class when you were in school then this should make sense to you if production is dropping what is that going to do it’s going to again cut the supply but we also have to look at demand look at the other side of the equation here right here industrial demand for silver has increased from 2020. now we’re moving into 2021 right now but the demand for silver has now increased by 7 percent and we’re not even done with 2021 yet main reason technology technology consumes silver and pay very close attention to 5g technology pay very close attention to starlink when you hear about a rocket going up to launch another satellite pay very close attention to that because tech companies are gearing up for 5g solar panels are being produced for people that want to cut on their energy bill we got more batteries being produced in the ev market guess what they all use silver so consumption is going to increase you know back in the day in 1980 and early 80s when i was trading silver kodak was a big consumer of silver because of that’s how film was processed using silver now that we’ve gone digital kodak is no longer a factor but now what’s replaced kodak back in the day is now 5g technology and ev markets and solar energy and so on and so forth so i i’m still extremely bullish for silver and on top of it cnbc did a special 15-minute presentation on reddit and what they’re looking to do i believe reddit still has silver slv particular in their crosshairs as a possible short squeeze target i’m not going to speculate on that i’m just going on the basics supply and demand information right here but keep an eye on that just for the record i have been accumulating silver for 14 years i continue to do so more as a wealth preservation strategy and anything else i’m not quite sure the fiat currencies around the world are going to survive so i’m going into hard assets just a little bit of a tidbit there for those of you that want to learn how to manage risk and preserve your wealth silver i believe is a great place to go for that as well as gold i’m not going to get into gold right now but stay tuned to my twitter page stay tuned to facebook page stay tuned to market rebellion and i will continue to give you updates each and every week through the weekly market report have a great weekend so long you


rn
Weekly Market Report 07/16/21
rn

Related Posts

Leave a Comment