I heard crickets when I used the scans on ETFs today. Very few results and what came through I wasn't pleased with. I've listed some runner-ups today, but I'm only cautiously optimistic.
One of the runner-ups is the short for Bitcoin. I do think Bitcoin will continue to slide, but I didn't want to include something so volatile especially given it was an "ultra" fund. There is also a bet on the VIX. I've not had much luck trading these ETFs. They are extremely short-term in nature and also have the problem of volatility.
The choices today are commodities. There is the Commodity ETF (GSG), Wheat (WEAT) and Copper (CPER). These were all chosen from our ETF Tracker which you have access to on our website. You'll find the ChartList on the upper left hand side of the Blogs and Links page. I scoured the list and found those three ETFs.
The market is acting toppy so we should be sure to have stops in place.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CPER, GSG and WEAT.
Runner-ups: HDV, INFL, XPH, SBIT and VIXY.
Diamond Mine Trading Room:
RECORDING & DOWNLOAD LINK (9/27/2024):
Topic: DecisionPoint Diamond Mine (9/27/2024) LIVE Trading Room
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When: September 27, 2024 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine LIVE Trading Room
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Below is the latest free DecisionPoint Trading Room recording from 9/30. You'll find these recordings posted on Mondays to our DP YouTube Channel. Be sure and subscribe HERE.
Welcome to DecisionPoint Diamonds, wherein I highlight ten "Diamonds in the Rough" per week. These are selected from the results of my DecisionPoint Scans which search for stocks that could benefit from the trend and condition of the market. Remember, these are not recommendations to buy or sell, but are the most interesting of the stocks that surfaced in my scans. My objective is to save you the work of the initial, tedious culling process, but you need to apply your own analysis to see if these stocks pique your interest as well. There are no guaranteed winners here!
"Predefined Scans Triggered" are taken from StockCharts.com using the "Symbol Summary" option instead of a "SharpChart" on the workbench.
Stop levels are all rounded down.
United States Copper Fund (CPER)
EARNINGS: N/A
CPER tracks a rules-based index of copper futures contracts selected based on the shape of the copper futures curve. Click HERE for more information.
Predefined Scans Triggered: Elder Bar Turned Green and Moved Above Upper Price Channel.
CPER is unchanged in after hours trading. I noticed a breakout today on CPER coming out of a bullish double bottom pattern. It has already fulfilled the upside target of the pattern, but given the breakout it looks ready to push higher toward the May top. The RSI has gotten close to overbought so we could see a pause, but I also note that it has been able to hold overbought conditions for some time previously. The PMO is rising above the zero line on a Crossover BUY Signal and Stochastics have turned up again. Relative strength is rising as we would like. The stop is set at support at 7.8% or $26.85.
It has been range bound, but does look ready to test the top of the range right now. The weekly RSI is positive and not yet overbought. I like that the weekly PMO is going in for a Crossover BUY Signal. The StockCharts Technical Rank (SCTR) is in the hot zone* above 70. Consider a 17% upside target to about $34.08.
*If a stock is in the "hot zone" above 70, it implies that it is stronger than 70% of its universe (large-, mid-, small-caps and ETFs) primarily in the intermediate to long terms.
iShares S&P GSCI Commodity-Indexed Trust (GSG)
EARNINGS: N/A
GSG uses index futures contracts to gain exposure to a production-weighted index of front-month commodities futures contracts. Click HERE for more information.
Predefined Scans Triggered: Filled Black Candles and Moved Above Ichimoku Cloud.
GSG is down -1.90% in after hours trading so today's bearish filled black candlestick may be prescient. It would take this lovely breakout out of the equation. Still the indicators are still working for it. The RSI is positive and not overbought. The PMO has just moved above the zero line indicating strength. Stochastics have turned up and are back above 80. We aren't seeing great outperformance, but of late there is a little bit of a rise in the relative strength line. The stop is set beneath that first low in August at 6.2% or $20.21.
It's not the best weekly chart as price has been stuck in a trading range for years, but it is headed back to the top of the range and could see a breakout to the 2022 high. The weekly RSI is positive now and the weekly PMO is turning back up toward a Crossover BUY Signal. The SCTR is terrible so keep this short-term for now.
Teucrium Wheat Fund (WEAT)
EARNINGS: N/A
WEAT tracks an index of wheat futures contracts. It reflects the performance of wheat by holding Chicago Board of Trade wheat futures contracts with three different expiration dates. Click HERE for more information.
Predefined Scans Triggered: P&F Double Bottom Breakdown, P&F Descending Triple Bottom Breakdown and Moved Above Upper Keltner Channel.
WEAT is up +0.18% in after hours trading. Today saw a powerful breakout above both horizontal resistance and the 200-day EMA. It hasn't seen territory above the 200-day EMA for some time so I believe this is an important breakout. Admittedly, the RSI is getting overbought, but on a good bull run like it could be in for, it can stay that way. The PMO is accelerating higher above the zero line on a Crossover BUY Signal. Stochastics are now above 80 and relative strength has been rising. I've set the stop as close to support as I could at 7.8% or $5.06. This is a low priced ETF so position size wisely.
I really like the bullish double bottom pattern on the weekly chart. Price is about to get back above both the 17 and 43-week EMAs. The weekly RSI just entered positive territory and the weekly PMO has just triggered a Crossover BUY Signal. The SCTR is not in the hot zone, but it is rising vertically. If it can get to the prior top it would be an over 20% gain.
Don't forget, on Thursdays I look at reader-requested symbols, click HERE to send me an email. I read every email I receive and try to answer them all!
Current Market Outlook:
Market Environment: It is important to consider the odds for success by assessing the market tides. The following chart uses different methodologies for objectively showing the depth and trend of participation for intermediate- and long-term time frames.
- The Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA)
- The Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA)
Don't forget that as a "Diamonds" member, you have access to our "Under the Hood" curated ChartList on DecisionPoint.com. You'll find it under "Members Only" links on the left side on the Blogs and Links Page.
Here is the current chart:
Full Disclosure: I am 60% long, 0% short.
I'm required to disclose if I currently own a stock I mention and/or may buy/short it within the next 72 hours.
"Technical Analysis is a windsock, not a crystal ball." - Carl Swenlin
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NOTE: The stocks reported herein are from mechanical trading model scans that are based upon moving average relationships, momentum and volume. DecisionPoint analysis is then applied to get five selections from the scans. The selections given should prompt readers to do a chart review using their own analysis process. This letter is not a call for a specific action to buy, sell or short any of the stocks provided. There are NO sure things or guaranteed returns on the daily selection of "Diamonds in the Rough."
Regarding BUY/SELL Signals: The signal status reported herein is based upon mechanical trading model signals and crossovers. They define the implied bias of the price index/stock based upon moving average relationships and momentum, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
Helpful DecisionPoint Links:
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com