Jim Puplava



Basil Chapman is author of The Opening Call daily newsletter, and host of a call-in show ‘The Tiger Technician’s Hour’, M-F noonET-1PM ET on market days at . His CD/Book ‘Introducing The ChapmanWave® methodology’ is available at

Financial Sense interview with Ryan Puplava, Thursday, May 2nd, 2019

Within the ChapmanWave methodology, these are the core chart patterns utilized

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1. There are either Straight line moves up, or down

2. Arches or Cups

3. The h-pattern testing the left side low after a decline and smaller arch, or the upside down, or reverse y-pattern testing the left side high after a strong rally and cup retest

Quick review since the 2/11/19 interview with Jim:

• Still anticipating a Dow all time high as we discussed the rotational aspect of 2018 with new all time highs in sequence, and that could be repeated in 2019 – Dow, IWM-Rut2000, NYSE waiting their turn

• SMH-Semiconductors were, and probably remain key to the tech sectors’ action

• XLK-Tech sector were important to the market’s action

• HACK- Cyber security remains a favored area for 2019), becoming very overbought short-term

• XLF-S&P Financials were a favored sector, and remain so, but it will likely take GE-Goldman Sachs pushing into the 215s to really spark greater interest in the sector. That would also help the IAI - ETF

• IAI-Broker/Dealer ETF was also a long for subscribers as we anticipated that once in the 63s, but more likely trading in the 165s or higher is where the general public could actually start speaking about the stock market at gatherings and parties – something sorely missing in this historically ‘silent’ mega bull market

• IYT-Transports ETF was starting to act a bit better, but needed more upside in parallel with the Dow’s rally for confirmation of economic strength as measured by the two classic indices, i.e. Dow Theory

• Dollar Index - $DXY- on a buy since 4/6/18 at 90.07 via the UUP Fund - has finally hit the 98s target. Having a small rest period it continues to – at least for me – represent the confidence other countries have in the US economy, thereby making the dollar the currency of choice

• Gold would probably just remain in a wide trading band together with a weak euro and slightly rising yen

• The monthly $TNX- 10yr T-note yield had formed a Peak-D, suggesting lower yields

• Area to consider as a very early market entrant the MJ-Alternative Harvest Cannabis sector ETF as a generic way to be in this sector – ameliorating some of the individual stock volatility

• FAANG sector – as discussed last year in September, all were forming serious tops that should be severe, and then take months to get back to new all time highs. However, they are the 21st century innovators, as were the GEs, GMs, RCAs, DuPonts of the 1920s – and are integral to the current infrastructure of socioeconomic conditions

• VIX-Volatility Index – a gauge of comfortability and fear

Where are we now?

The Dow @26430, 5/1/19, in three timeframes - daily, weekly, monthly

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• In the bigger picture the monthly has a Rising Wedge formation that points to highs above the Oct 2018, 26951, all time high by this summer. That is, as long as the 25200-25000 support level holds any sudden bad news related market sell-off over the coming weeks.

• The weekly chart only in Leg-C implies – based on the ChapmanWave methodology - at least four higher Peaks in a Buy Mode to at least a Peak-D is anticipated. That is bullish and implies that, regardless of even medium-term weekly weakness higher highs are to come. The MACD and slow stochastic remain very positive

• Shorter-term a close in the 27000s would be extremely bullish, while a slide under 26250 would point to a digestive phase unfolding – that might be underway

• If weak time rather than price might be the theme, or time and price

• We are short via the DOG (1:1 short the DIA) from 4/23/19, and will adjust the stop accordingly

• The difficulty will be timing the reversal to long - which is what we will be wanting based on the very bullish longer-term outlook

QQQ- Invesco Trust Series @188s – NDX-100 Index: Daily, weekly, monthly

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The QQQ, after becoming the first of the key indices to make a new all time high, and containing some of the really important growth stocks is close to digesting huge gains.

• Daily @188s is a tad overbought and looks ready to test the 186s key near-term support. Certainly a punch into the 194s would be extremely impressive thereby creating a flurry of public buying for even higher prices – probably difficult to do right here. The MACD has just crossed negative, the stochastic @86% has turned down, but still good

• Weekly Peak-C will unfold over the coming 2-weeks if there s no new high next week, even as the MACD and stochastic @98.56 are really strong. The green 9-ema support is @ 183s, the black 14-ema is @180s. Out of twenty weeks since the Dec low, there has been just one red candle; maybe this week it is two

• The monthly better displays the huge V-shaped rally from Dec 2018, to new all time highs this week. In the big picture, in the ChapmanWave methodology it suggests the 180-177s area must hold weakness in 2019 for it to become a new Leg-A. The MACD has not crossed positive for price and technical confirmation

• The question is whether the Qs which led the market up has topped out first, if this is even a short-term respite, or something deeper

SMH-Semiconductor ETF @114s: Daily, weekly, monthly

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• The SMH could well become the sector telling us the most about the coming month or two’s market action. We have seen a mixed picture within the components of the SMH, but it will be how short-term support in the 113s holds that will give shorter-term direction, but the gap below 110.56 is a target looking out a bit. The MACD and stochastic are weakening

• The weekly chart, in Leg-C should still form Peak-C with a lower high-bar, and then a new Leg-D above wherever Peak-C is formed. The MACD and stochastic are very strong as the green 9-ema support is @111s, the black 14-ema support is @108s. Over 120.71 if no new high his week will start Leg-D up – that will probably have to wait a while

• This last incredible Leg up from the 80.71, Dec 2018 low to a new all time high, could be an extension of the last major Buy Mode as ‘old’ Leg-E, or an extremely bullish ‘new’ Leg-A up as the MACD is just crossing positive and the stochastic is @75% - good

• It is worth noting that the latest reports still suggest there is a tremendous lag in the March billings for the semiconductor industry, but not sure of April’s numbers

• This disparity might have some impact over the coming period if there is sustained weakness in the SMH in May

• With a short position established after the AMD upspike on Tuesday we will just lower the buy-stop proportionately

• Timing the sell-offs has been a real challenge in this sector; just look at the vertical weekly rally with just two, 1-week pullbacks!

$DXY- Dollar Index @97.10: Daily, weekly, monthly

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• The Dollar has been rallying since the February of 2018 low of 88.25 (4/6/18 @90.07 is where we went long via the UUP), and has slowly stair-stepped its way to higher levels. The cup formations have been helpful in charting its stairstep progress. Most importantly the chart on the right shows a new Leg-C, which implies in the CW methodology that over the coming months a Peak-C will form with a lower high-bar. And then a new Leg up over Peak-C will start Leg-D, our monthly Buy Mode CW letter target

• After the last daily Peak-D (the 4th highest high-bar) yet another rest period has unfolded. Support in the high 96s should contain the price short-term if it attempts yet another cup formation rally

• The weekly second rising cup formation to the 98s was our intermediate-term target, with a longer-term projection touching the 100-level

• My contention has been, the US Dollar represents an international currency of security, and an acknowledgement of the strength of the US economy

• As discussed since last September, other than sudden sharp rallies, the dollar’s strength should curtail any short-term strength in both gold and the euro

• The daily MACD and stochastic have a lot of work to do to repair the recent 4-session Peak-D sell-off

The IYT- iShares Transportation ETF @191s: Daily, weekly, monthly

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Regardless of Dow Theory, just seeing the DJIA and the DJTA moving in the same direction is usually a good sign. In this case the IYT remains quite a distance away from its 9/2018 all time high – a bigger percent than the Dow is off its 10/2018 all time high.

We have been long since the 186s on 3/29/19. It hit 200, but this sell-off could give back a lot more, even if the weekly is about to form a Peak-C with Leg-D still to come

XLF-S&P Financials @ 27.76: Daily, Weekly, Monthly

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• Looking out into the coming summer months the XLF should decisively pierce the monthly downtrend resistance line moving into the 29s – last September’s high-bar. To retrace to the all time 20.33, January 2018 high will probably require GS – Goldman Sachs to, like it has since its IPO in 1929 - to be in the forefront of the next big market upmove. This has been the first period in a long time that it has lagged so badly. Monthly support in the 26-25s should be strong in May

• While a favorite (mentioned in the last interviews) has been BAC- Bank of America (now @30.20s) from the 24s, it will be GS-Goldman Sachs that should at some point become a bank XLF icon.

• Near-term there could be some weakness in this sector, however, the daily and weekly technicals are really strong

IAI-Broker/dealer & Sec ETF @63.23: Daily, weekly, monthly

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• When we were looking at the IAI earlier in my interview this year around 60.00, the pattern seemed to suggest the 63s was a likely target. My comment was that it would probably take a push into the 65s turning the 63s into support to get a sense that the general public was becoming more involved in the stock market. As opposed to the generic ETF type buy&hold investing.

• Trading in the 65s would suggest strongly the public is back

• Instead of the relative SILENCE that is accompanying this market making new all time highs, which is so unusual historically. Maybe it is because stocks represent the President, after all he has made the stock market his bailiwick, and perhaps people just do not want to get into any political conflagration

• When last did anyone come up to you and volunteer stock market information, or a tip?

• Recommended long since 60.69 there is a good chance of digesting gains as the weekly is in Leg-D having just gone over the left side target of 63.72, touching 64.12. Together with the XLF, the IAI has been a stellar performer in April

• At Peak-E the near-term daily support is in the 62.70s as the MACD is still good and the stochastic is @91%. The key support to hold is 60-58s in May

• While unlikely at this point to push into the 65s, that will be a number we are watching closely

MJ @35.47- Alternative Harvest Cannabis ETF: Daily, weekly, monthly

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• We have used the MJ- cannabis sector ETF for a while now as a shorter-term trading vehicle, getting a feel for how it responds to market conditions

• Considering that this is a new stock market sector of significance, but not wanting the individual stock volatility this is probably the better way to be in this sector

• Our latest position was somewhat bigger, having garnered some good profits, but we still maintain a rather tight stop

• Probably when one looks back in a year or tow it will be a mystery why a buy&hold position wasn’t established, but there are a LOT of trial and errors to be made for stocks in this group as a learning experience unfolds for all

Basil Chapman is author of a comprehensive daily newsletter called The Opening Call, and is host of a daily, M-F noon-1pmET call-in show at . He has a CD/Book called Introducing The ChapmanWave® methodology available at

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