Thursday, November 29, 2012

Enjoying Horizon's Q400 turboprop on a trip to Portland

Thanksgiving Day saw me taking a quick journey between the Bay Area to Portland, and as the journey involved Horizon, my favorite US regional airline, I've composed this brief (and fawning) documentation.

I arrived at San Jose's Norman Maneta International Airport some thirty-five minutes before my scheduled departure time of 6.15a. After an expeditious transit through airport security, I arrived at the gate area where N400QX, a Bombardier Q400 turboprop aircraft in the colors of the University of Idaho Vandals, was about midway through the boarding process.
This trip's routing: SJC-PDX, overnight, PDX-SFO
View forward during the boarding process from exit-row seat 1B
Catering on the flight
The flight itself was a joy. From seat 1B, the forward exit row seat, I enjoyed some brief conversation with the flight attendant in her jumpseat and, after napping for a few moments after our sprightly takeoff, I dug into some markets-related reading (an outstanding textbook by Kirkpatrick and Dahlquist) for the majority of the flight. On the right side of the aircraft, a radiant melange of red and orange combined to render the sunrise, but being in a left-side aisle seat, I was in a decidedly suboptimal spot to enjoy it.
In-flight reading
University of Idaho Vandals -liveried tail and aft fuselage

University of Idaho Vandals -liveried forward fuselage
N400QX landed under overcast skies on runway 28L at PDX, with our short final approach taking us over the aloft PDX, where I'd be staying on this trip. The stay in Portland did not disappoint. Although Thanksgiving is naturally a family affair and my trip to Portland was decidedly solitary in nature -- its purpose being to facilitate strategic, introspective thinking and writing with respect to work -- I'd be enjoying the archetypal turkey feast with a gathering of extended family on the next day, Friday, in the Bay Area. Thanksgiving Day itself was all mine, and fruitful.

I journeyed back to San Francisco on Friday morning, with the flight being nothing short of spectacular. The day began well before dawn, with a few hours' work logged before I departed the aloft hotel at approximately 9.30a. The cosmos smiled upon me that morning and bestowed the next minutes with impressive efficiency: I arrived curbside around 9.40a, transited security in less than two minutes thanks to an empty TSA Pre-Check lane (while the hordes seemed to be queuing quite lengthily in the adjacent lanes), and was among the first passengers to board the 10.15a departure to SFO, again operated by a Horizon Q400 aircraft.

Slightly before midway through the flight, as I was savoring the heady texture and chocolatey taste of a Ninkasi Oatis oatmeal stout, the microbrew of the month at Horizon -- and get this, poured free of charge to economy class passengers -- Mt. Shasta came into view somewhat in the distance. Moments later, the snow-capped peaks of the Trinity Alps beckoned spectacularly just below (the maximum cruising altitude of the Q400 is only 25,000 feet). Some time later, now into an initial descent, we overflew Santa Rosa, with the Charles Schulz Sonoma County Airport (STS) clearly visible. But the best sightseeing came later still: a traverse off the western coast of San Francisco and the peninsula, before cutting across Redwood City to align with SFO's runway 28L approach.

Mt. Shasta in the distance
The Trinity Alps of northern California
Western San Francisco (Richmond and Sunset neighborhoods; Golden Gate Park)
Aircraft wing with Norcal mountains; rolling shutter effect is responsible for the distorted propellers

Seagate (STX) descends to support from a pair of price channels

NOV29 0948PST. Seagate Technology (STX) has declined in today's trade to $25.0 support from a pair of price channels: a 7-month channel, shown below in dashed red; and a 4-month channel, shown below in dashed yellow.

The 7-month channel is only minimally defined, however; it consists only of the essential 3 points. (Two points are necessary to define one channel boundary, and a third point is needed for the second channel line). As such, the probability for a rebound here appears, prima facie, to be somewhat diminished.

STX. March 15, 2012 to present. Hourly candles.

Wednesday, November 28, 2012

Chevron (CVX) gallops through 2-month channel resistance

NOV28 1931PST. Chevron Corp (CVX), a component of the 30-share Dow Jones Industrial Average, rallied through a robustly defined 2-month price channel in today's trade. The price action occurred on somewhat heightened volume: 7.0M shares, compared to a trailing 3-month daily average of 6.1M. The hourly-candles chart follows below.

NB: Price action on November 15, as seen in the chart below, had many features commonly seen in a capitulation; namely: the day's bearish sentiment penetrated below a well-defined trendline, volume spiked, and the decline's minimum occurred in the near vicinity of significant "round number" support (the day's low was only $0.66 above an even $100).

CVX. June 25, 2012 to present. Hourly candles.

Tuesday, November 27, 2012

Facebook (FB) rally continues into its 11th market day

NOV27 2040PST. Facebook (FB) shares are continuing a 35+ percent rally that began with shares below $19 on Monday, Nov 12. Ad Astra Hoya flagged the stock on Friday, Nov 9 with a headline noting that FB shares were approaching robust channel support.

Although FB shares have not closed higher on every single day over the last fortnight, the 5-minute candles chart below shows that price action remains firmly on the ascendent, and moreover still ensconced within a steeply-sloped, 2-week price channel.

FB. Oct 31 to present. 5-minute candles.
Zooming out to the hourly candles view of FB's history as a public company, i.e. since May 18th of this year, shares have climbed above a 3-month price channel, marked below in dashed red, and paused today just underneath the horizontal support of $26.73, which was the intraday low on July 26th and is significant because, on the following day, FB shares gapped lower by a few dollars.

Interestingly, today's intraday high was $26.50, which is still $0.23 shy of the horizontal resistance point. A push beyond $26.50, perhaps halting only a few pennies shy of $26.73, may be in the cards later this week.

FB. May 18, 2012 to present. Hourly candles.

Sunday, November 25, 2012

Marvell Technology (MRVL) consolidates and may rally

NOV25 1255PST. Marvell Technology Group Ltd. (MRVL) has spent the last month consolidating just beneath a 2-year price channel, shown below in dashed red. Should price action break through this channel resistance, shares would be well positioned to rally further.

MRVL. April 2011 to present. Daily candles.
Augmenting the bullish argument is the behavior of the difference between price action and its 200-day simple moving average (SMA), graphed in the above screen shot by the oscillator that's just below the price graph. In last month's precipitous decline, bearish sentiment brought price to over $5 below the 200-day SMA, matching the level of bearish sentiment of mid-August 2011, when price action formed a durable bottom. Both the August 2011 and October 2012 lows in the oscillator are circled in yellow above.

FLIR Systems (FLIR) kisses 18-month channel resistance on gentle volume

NOV25 1237PST. FLIR Systems, Inc. (FLIR), a producer of thermal imaging systems and a NASDAQ-100 index component, has cuddled up to resistance from an 18-month channel, shown in dashed yellow below. Bulls may be in for a one-night stand however; Friday's affair attracted only 177k shares of volume, against a daily average of around a million. Granted, it was an abridged encounter, with markets closing at 1300 Eastern for a tryptophan-tinged nap.

FLIR. April 2011 to present. Daily candles.

Baidu (BIDU) rallies from 2-year channel support

NOV25 0901PST. The ADRs of the Chinese search engine Baidu (BIDU) bounced on Friday (23 Nov) from the support of a nicely-defined 2-year price channel, shown below in dashed red. The rally has come after a November of intense selling pressure, and last week's nadir saw the stock at a more depressed level relative to its 200-day simple moving average (SMA) than has been seen in the last two years (as shown by the oscillator below the price graph).

BIDU. Nov 2010 to present. Daily candles.
The above daily candles chart also shows the security interacting with a more complex collection of three parallel 2-year trendlines, shown in dashed yellow.

Meanwhile, the hourly candles chart of BIDU, reproduced below, demonstrates that the current rally enjoys price channel support from an 8-month channel (shown in dashed red) and a 3-month channel (shown in dashed yellow). At last week's price minimum near $90, the oscillator measuring difference between price and the 200-hour SMA was likewise near its global low (over the chart's timeframe).

BIDU. March 12, 2012 to present. Hourly candles.

Friday, November 23, 2012

Silver (SI) rally powers onward

NOV23 0900PST. November's rally in precious metals, among them silver futures (SI), is witnessing another leg upward in today's trade. The contract is presently at 2-month price channel resistance, with the channel marked below in dashed red.

Of note: the red dashed channel is not particularly robust, being both rather minimally defined and with long stretches through "empty space." As such, price's current pause at the channel may be temporary; bullish sentiment may propel price higher, as it did earlier this week, when price broke through another 2-month price channel, marked below as a lightly dashed, grey line. Incidentally, the break of the grey channel provided an excellent buy point from which to partake in today's rally.

SI. Aug 27, 2012 to present. Hourly candles.
Note: equities traders can reflect their outlook on silver futures by taking a position in the SLV exchange-traded fund, formally titled the iShares Silver Trust.

Friday, November 16, 2012

Russell 2000 index (RUT) finds horizontal support

NOV16 1033PST.  The Russell 2000 index (RUT), along with the other principal equities indices, is enjoying a midday bounce of some 1 percent from intra-day lows.

The charting story here is that the RUT bounce has come from the well-defined horizontal support level of approximately 764-765, which was the index's local minimum on three separate occasions this summer: June 28, July 24, and August 2.

RUT. May 23, 2012 to present. Hourly candles.
Also noteworthy: the Russell 2000 is below its extended 2-month price channel (shown in red above), from which the index emphatically broke on Nov 14. On any forthcoming rally, the RUT is likely to encounter intra-day resistance upon reaching this channel; currently, that would suggest resistance in the neighborhood of 785.

Soybean futures (ZS) approach a buy point

NOV16 0911PST. Soybean futures (ZS) were the Wunderkind of the summer, rallying well over 40 percent between January 1st and the summer's drought-scorched height, but since topping off at $1789 in early September, the contract has given back about 23 percent.

ZS. Aug 26, 2012 to present. 4-hour candles.
The above chart depicts the past two months' decline, and a price channel nicely encapsulates nearly all the price action. Of note: today's two percent dip has brought ZS within a whisker of channel support, which might be expected in the $1360-1370 range.

NB: Equities traders can easily take bullish or bearish bets on soybeans through the SOYB exchange traded fund (whose formal title is: the Teucrium Soybean Fund ETF).

Thursday, November 15, 2012

Bristol-Myers Squibb (BMY) sells off to channel support

NOV15 2025PST. Shares of Bristol-Myers Squibb (BMY) have today declined to an appealing buy-point: the support of a precisely-fitting, 3-year price channel. The channel, drawn on the chart below with a dashed red line, is defined by four price extremes, which are highlighted in solid yellow.

BMY. November 2008 to present. Daily candles.
The lower portion of the screenshot shows an oscillator that is defined as the difference between price and its 100-day simple moving average. (The latter is drawn on the chart as a dashed blue line.) As such, the oscillator can be interpreted as an indicator of market sentiment. The current value of the oscillator, -2.45 (i.e. price is $2.45 below the 100-day SMA), is the lowest value since March 2009, suggesting that the stock is oversold.

Wednesday, November 14, 2012

Markets accelerate downward but the VIX volatility index lags

NOV14 1856PST. Markets declined briskly today, continuing in earnest a bearish move that began with President Obama's re-election last week. Two intriguing details:

1) The last week's downward "price velocity" -- the rate of price decline -- has been increasing relative to the past month of selling. As evidence of this, consider the hourly-candles chart of the NASDAQ Composite (COMP).

Price declines since late September have been contained by a well-fitting price channel, marked below in dashed yellow. In the last week, however, price action has been compressing ever closer to the channel's bottom support line and, in today's trade, has emphatically broken through.

COMP. March 1, 2012 to present. Hourly candles.
 2) Despite the markets' recording of fresh lows on increasingly bearish price velocity, the markets' principal measures of volatility are notably not at fresh 30-day highs. The volatility indices like the VIX (the CBOE volatility index based on options pricing for stocks of the S&P500 index) are, in the parlance of technical analysts, not "confirming" the indices' sharp moves lower, which somewhat increases the probability of a bullish reversal of the indices from present lows.

The hourly-candles chart of the VIX is below. The circled local maxima correspond to the circled price action events on the NASDAQ Composite (COMP) chart above. As the viewer can herself see, today's move by the COMP to fresh 3-month lows has not been matched by a corresponding rise in the VIX to a new 3-month high.

VIX. March 1, 2012 to present. Hourly candles.

Tuesday, November 13, 2012

JC Penney (JCP) dives toward channel support

NOV13 0932PST. When the Financial Times carries a story with the following tantalizing statistic -- that JC Penney (JCP) has a short interest level at 40% of the firm's outstanding shares, ranking it the second most shorted stock in the S&P500 -- there is surely a contrarian trade in the making.

JCP shares are in a very steep capitulatory sell-off; blood flows in the streets. More to the point, the shares are approaching support from a two-year price channel, which predicts support in the $17.4 area. If taking into account a two-day island reversal from August 2011, which briefly penetrated the channel's lower support line, support might be expected at the lower price of approximately $16.3.

The four-year chart of JCP follows.

JCP. Nov 2008 to present. Daily candles.

Friday, November 9, 2012

Facebook (FB) approaches robust channel support

NOV09 1201PST. Facebook (FB) shares are approaching support from a pair of well-fitting price channels. These forecast support at approximately $19.20, if reached today or near the open of Monday's trade.

The first channel encompasses all price action from June 5 through Oct 23, after which FB shares shot up on a well-received earnings report. This channel, in red below, is well-fitting; local minima coincide with the channel four times, and local maxima on two additional occasions.

The second channel, in yellow below, is defined by four local extrema. It contains all price action from Sept 5 through the present.

The chart itself depicts FB's entire trading history as a public company, i.e. all price action since the company's market debut on May 18, 2012.

FB. May 18, 2012 to present. Hourly candles.

Apple (AAPL) rallies this morning

NOV09 0733PST. A follow-up to this morning's post on Apple (AAPL). The security has broken through the resistance at $540 described earlier, and it is now consolidating underneath resistance at $547 from another 3-day channel.

Given today's strong rally thus far, the $547 resistance may be quick to break. In such an event, the next forecast resistance is at approximately $556-557 -- the bottom of the three-week price channel mentioned in today's earlier post.

AAPL. Past 3 days. 1-minute candles.

Apple (AAPL) may be bottoming

NOV09 0708PST. The five-minute candles chart of Apple (AAPL), showing price over approximately the past month, shows a capitulatory steepening of price action, which is often a precursor of a bottom and sometimes of a "V-shaped" recovery, to use that favorite term of recent political campaigns.

Two noteworthy points: First, price proceeded over most of the time period in a moderately-sloped sell-off, although it began to distance itself from the upper channel line over time.

Second, price violated the first channel's lower boundary and formed a new, steeper channel. And it's now hugging the upper boundary of that second channel.

AAPL. Oct 12 to present. 5-minute candles.

Thursday, November 8, 2012

QQQ (Nasdaq ETF) at 2-month channel support

NOV08 1039PST. Most indices, index ETFs, and financial futures are presently at or near significant channel support areas. After Barack Obama's re-election on Tuesday night, the markets have of course been selling off hard, and the present area might mark a low.

Below is a chart of the Powershares QQQ Trust (QQQ), i.e. the largest exchange-traded fund tracking the Nasdaq-100. A well-fitted, downward-sloping price channel encompasses all price action from September 17 to the present, save for an island-reversal day on Sept 26th.

Critically, price is currently right at channel support. Negative sentiment could always propel price lower still, setting up a relatively rare capitulation; that said, buyers do have a reason to step in here.

QQQ. Sept 17 to present. Hourly candles.

Wednesday, November 7, 2012

Apple (AAPL) approaches 4-year channel support

NOV07 0917PST. Apple is approaching support from a 4-year channel.  The channel is defined by four price action local extrema, circled in yellow. Only three touches would be enough to define a channel -- two points to form one line, and one additional point to define the second, parallel line -- and the fact that a fourth local extreme perfectly touches the channel adds evidence to its explanatory potential.

In zooming into the chart, the 4-year channel would be expected to today support AAPL near $549. In tomorrow's trade, the support would occur around $550.

AAPL. Nov 2008 to present. Daily candles.