Peter Worden's Blog

This 2-hour chart spans back to the beginning of February and has 20- and 50-bar moving averages running through price. The bottom pane contains my volume-weighted MACD. As in previous charting examples, the price bars are painted red when MACD is negative and green when the indicator is positive.

    
The bounce in XLK from the early March lows reflects the recent strength in the technology sector. However, this particular ETF now appears to be stumbling on the short-term, intraday charts. Most of yesterday’s downside gap has been filled and XLK has encountered resistance today at the 20-bar moving average on this chart. As long as the yellow line remains below the blue line in my MACD indicator, price should work lower.

This second chart (also a 2-hour chart) displays our Time Segmented Volume (TSV) indicator in the center pane and a Worden Stochastic at the bottom. Admittedly, TSV remains positive having survived a test of the zero-line yesterday. However, over the past week the indicator has failed on a couple of attempts to move back up through its moving average. I think the real telltale sign here will be what gives first, the zero-line to the downside or the TSV moving average to the upside? Worden Stochastic has revealed a loss of momentum, as the indicator has moved down out of overbought territory and has now crossed down through the 50 level.

With SPY looking tired, it is logical that SRS may move higher from here. This 15-min chart shows a base of several days now in place and strengthening technical indicators, i.e. TSV and MACD. Price moved back above its 50-bar moving average (orange line) early this morning and has held above it for the entire session.

TSV really turned positive yesterday and has continued to hold pretty much above the zero-line. MACD turned positive several days ago and remains short-term bullish.

SPY has moved several points higher since my post last week. Earlier today, SPY encountered some overhead resistance at its 200-hour moving average (orange line). Within the past hour we’ve seen price pull back and to a slight degree violate the lower confines of its minor uptrend channel. This is the first such violation since the minor uptrend began about a week ago.

Although TSV and MACD remain positive they are showing some subtle, yet growing signs of fatigue on this 30-minute chart. It appears SPY is in need some rest here, which is likely to involve a pullback of at least several points.

This 30-minute chart of SPY spans back about three weeks to February 23. I have drawn in some trend lines to illustrate the short-term upside reversal, which occurred on Tuesday’s open. SPY gapped sharply higher breaking through the downtrend line drawn from the Feb. 26 high. SPY is now in a minor uptrend which can be defined by my yellow trend lines. It is important for any pullbacks to hold at the lower uptrend line.

TSV (center pane) crossed up through the zero-line at about the same time price broke out earlier this week. The indicator remains in positive territory. I would like to see TSV remain above the zero-line and ideally above its moving average.

Worden Stochastic also suggests strong price momentum, as it holds in overbought territory. I would like to see this stochastic hold above the 50 level on any price dips within the up channel (yellow uptrend lines).

USO is an Exchange Traded Fund I use to track the price of oil. USO may be rounding out a tradable bottom at these levels. I have applied my Volume Weighted MACD to this daily chart of USO. The MACD is displayed in the center pane. I have also colored my price bars green when the MACD is positive and red when the MACD is negative. Although USO has continued to slide lower, MACD suggests a progressively improving technical condition in recent months.

Worden Stochastic also shows an encouraging pattern as it turns up from a prolonged oversold condition. I would like to see the Stochastic surpass the early January level in convincing fashion. It is very close to testing that level right now.

Finally, price itself is testing its 50-day front weighted moving average right here, which I believe is an important test to pass.

Overall, I think USO offers a desirable risk-reward ratio for a long entry at current levels.    

Yesterday afternoon in TeleChart Platinum chat I wrote, “XLF should move higher from here.”
XLF actually moved lower into yesterday’s close, but is up nicely today and has potential for some follow-through on the upside. My hourly chart shows a constructive profile for MACD, TSV and Worden Stochastic. The volume-weighted MACD completed a positive crossover a couple of days ago (the start of the green price bars). TSV has been holding above its moving average over the past one to two days and now finds itself rather decisively above the moving average. It will be important for TSV to move up through the zero-line, as a result of this rally. And finally in the bottom pane, my Worden Stochastic is turning up with conviction (above the 50 level) from an oversold condition, which has persisted for nearly two weeks. XLF has moved up through my short-term downtrend line and is testing its 50-day price moving average where some resistance is likely to be encountered. Remember, I believe TSV’s test of the zero-line will be key to the sustainability of this rally.  

I have been saying for some time we absolutely must get participation from the financial sector if we are to see the general market get anything going on the upside. XLF is still well below its 50-hour moving average, but it is back above the 20-hour and the short-term technical indicators are improving. My volume-weighted MACD (on this hourly chart) has been in a buy mode since late Wednesday. Add to this the fact TSV just survived a test of its moving average on this morning’s sharp drop and my Worden Stochastic has turned up from oversold and is right on the cusp of crossing the 50% line. The XLF must still survive today’s final couple of hours of trading, which is saying quite a lot in these volatile times, but it does appear more upside potential exists here. I believe a test of the 50-hour moving average (white line) may well be in order. 

In TeleChart Platinum chat just a short time ago at 2:02 PM ET today I wrote, “I like the look and the feel of this rally.”

SPY has made a nominally lower low following the bounce attempt at the end of last week. As a result, my volume-weighted MACD gave us a head fake and our price bars went from green back to red again on this 30-min chart. Earlier today, SPY completed a successful test of yesterday’s close (almost to the penny) and has since pushed modestly higher. Notice the positive divergence which has now formed in TSV between Thursday’s low (Jan. 15) and today’s low. Price is now approaching a test of the 50-bar moving average, an obstacle which must be overcome if SPY is to carry beyond the highs of late last week.

DIG needs to get back up through its 50-hour moving average, which it is testing right now. I am betting it does. This hourly chart shows a potential “W” bottom forming in price. My volume-weighted MACD is starting to turn bullish here and Worden Stochastic has turned convincingly up from oversold levels. TSV is still below the zero-line, but is above its moving average. I consider the later to be more important right here. Note the TSV characteristics of the rally from the mid December price lows. 

After moving sharply lower at the outset of today’s session, SPY did establish a trading range of sorts for the remainder of the day. In fact, SPY did actually survive a late-day test (almost to the penny) of the morning low. While this may suggest we are close to a tradable low, the indicators on this particular chart are still negative.

As you can plainly see, this hourly chart of SPY has been in a sell mode since January 6. Both my volume-weighted MACD in the center pane and my front weighted TSV in the bottom pane correlate quite closely with their respective moving average crossovers. I am watching this chart very closely right here for potential positive crossovers, which would signal the likelihood of a short-term rally attempt. I would also ideally like to see at least some basing action in price, much like we saw during the last week of December.

SRS is an UltraShort Exchange Traded Fund (ETF), which may offer a great vehicle to trade declines in the real estate sector.

It appears SRS has rounded out a trading bottom on this 2-hour chart. Both price and the 20-hour moving average are back above the 50-hour moving average. My front weighted TSV shows a series of positive divergences at the lows going back to December 8. As you can see, TSV has also made a series of higher highs culminating with a decisive move back up through the zero-line in recent days.