Your Almost Daily Bit of Wall Street Wit & Wisdom

“Most people don’t want the truth. They want a secret. So if that’s what you want, I’ll give you the only secret you will ever need—there are no secrets.”
— Nick Maggiulli, @dollarsanddata

There is no holy grail for traders, but there are great tools to help you.  With knowledge, courage, discipline, and hard work you can put probability on your side.

Best regards,

Steve

Island in the SPY

As you can see on my candlestick chart below, Wednesday’s gap down negative black candle line left all of September’s price action as an island reversal pattern.

S&P 500 chart

Chart by Steven Sarnoff h/t stockcharts.com

This price picture implies the likelihood, but not the certainty of a trend change.  The key going forward will be to see how the venerable index behaves on a rebound attempt to fill the gap.  The aged bull market may be tired and we are in a distinct time period of risk.

I see overhead resistance (supply) waiting at $291.50-$295.49, basis the close.

Underlying support (demand) from today’s positive session is at $284.82-$289.12.

Subscribe to Options Hotline today to see how our readers position for fun and profit.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

Starbucks stock price chart

Chart by Steven Sarnoff h/t stockcharts.com

“Seeing lots of trendlines being drawn these days.  Please note that trendlines need at least three valid touches to be significant.”
— Walter Deemer, @WalterDeemer

An up trendline is drawn by connecting higher lows.  It represents support and may exert a positive influence on price.  A down trendline is drawn by connecting lower highs.  It represents resistance and may exert a negative influence on price.

As you can see above, on my daily candlestick chart of Starbucks (SBUX), trendlines provide important information, especially when they are tested.  They are not drawn in stone, but are valuable arrows in a chartist’s quiver.

Remember, even in these days of computer-driven algorithmic trading, technical analysis is as much art as science.

Options Hotline is quickly approaching its 31st year of publication and my 21st at the helm.  Time sure flies.  If you’d like to see how we combine the best of western technical analysis with ancient Japanese charting techniques to generate great options gains from small stock moves, subscribe today!

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

procrastination cartoon

Cartoon by Ellis Rosen, @Ellis Rosen

“It never rains on Rosh Hashanah.”

— Paul Sarnoff

I remember one year, walking to shul with my dad, we got soaked!

Rosh Hashanah begins Sunday evening, marking the start of Jewish year 5780.  The High Holy Days, from Rosh Hashanah to Yom Kippur, are known as The Days of Awe and begin 10 days of reflection, introspection, and repentance.

We wish all who celebrate a very Happy, Healthy, and Sweet New Year!

Best regards,

Steve

 

Your Almost Daily Bit of Wall Street Wit & Wisdom

Bell Rock

Bell Rock, Sedona, AZ

“They don’t ring a bell at the top.”
— Stock market adage

They don’t blow a whistle there, either.

Best regards,

Steve

PS We’re back from a great trip to Sedona, celebrating my newly septuagenarian brother’s birthday especial.  Pictures don’t do that place justice.  If you’ve never been to Sedona, put it on your list.