Excerpts Writings From JJ @vwaptrader1, More Interviews, Trading Essays

From The Desk of Trade Beautiful – Bottom, Bottom, Bottoms!

$TWTR is making me feel like I am in a Lizzo video right now.

Let’s talk about Bottoms and whether or not we are in one.

Just as in real life no one likes a flat bottom. The rounder the bottom the better and it looks like the $SPX has not stepped foot in the gym in months.

First things first, unless someone hires me as a TA this is just for educational and informational purposes only.

Let me preface this by saying there is always a bull market somewhere. Energy and grain have been doing extremely well. A lesson for newer traders or maybe stubborn ones, it is ok to leave your beloved tech and growth stocks and move over to a new sector when they are not working. I give you permission.

In a sea obsessed with bottoms everyone is looking to “nail” the bottom. Let them at it. A broken clock can be right twice a day. Our job is to, especially if you want to stay in this career long term, figure out the truth by reading what is in front of us. The charts.

Today I am not going to speak on inflation, CPI, QE, Investors reevaluating based on P/E or anything to that nature. These are all lagging imho. All that matters to me is what the charts are telling me. I really don’t care why. My time is better spent elsewhere.

So what pattern were technicians looking at wayyy before CPI etc?

What’s that? Try again.

You Got it. Classic topping pattern Head & Shoulders.

Looking at the chart we can clearly see the H&S forming and the confirmation of the break was 4300.

3800 has been a massive talking point between experts, because it is the 38.2% retracement area. I adore measured moves. It is like ballet. Poetic justice if you will lol.

So taking into account the March 2020 lows we can see the 50% retracement would put us at 3500. This doesn’t mean we cannot bounce around.

Let’s take a quick look at the largest weighing company in the S&P $APPLE.

With 7% of the S&P , trading 26x its forward earnings and having just broken support conforming a double top formation I can safely say this adds to the case of the bottom is not in

Take a look at the measured move targets below on the break of $151.50.  Bullish case if reclaims this level and holds, as there will be a lot of trapped shorts expecting more downside.  

Remember, we let the charts tell us the story and we allow the patterns to work themselves out.  Every rally begins with an end to selling pressure and every selloff comes after bullish action, so it is important to not get tied into a bias.  

I really hope you have enjoyed this quick article!

Please feel free to reachout to me on Twitter https://twitter.com/tradebeautiful to chat stocks, trading, technical analysis, and to let me know if you would like more . Send me a message or tweet of what you would like me to cover next!

Til next time.

Trade safe. Trade Beautiful.

Les xoxo – @tradebeautiful (Twitter)

Beyond The Trades is sponsored by our good friends at Microefutures.com / EquitiesETC.com

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