Technical Analysis: Snap Inc.

Snap Inc. Daily

A much anticipated listing sent this stock bolting in it's first two trading days however the fairytale start wasn't to be as the early birds and profiteers decided to cash in on the good run and eventually collapsed the price below $23.50, a significant point that marked the lowest price since it's listing at the time. 

Since then we've seen much weakness entering the fray with not much support from buyers scoping in on a bargain at lower prices with the current rally reaching back up towards $23.75. 

The RSI has begun to take shape and so far has yet to produce a reading above the all important 50 mark. There's a degree of flattening in the line of the indicator but it's too soon to say whether this assessment is valid given the short period this stock has been listed. 

In saying that, should the price breakthrough the 50 level on the RSI as well as defeat sellers at the lateral line of polarity of $23.75, we could see a fresh attempt to reconnect with the previous all time highs.

There's more to the move in the S&P 500 than meets the eye

A topic fuelling flowing lately surrounds the event that saw the conclusion of a habitual lag the S&P 500 had found itself in by struggling to secure a daily movement of 1% or higher, a occurrence that's subsequently arrested volatility over an extended period of time.

Many would believe that President Trump had played the biggest part in calming markets fears and perhaps seen as a catalyst to accelerating stock market valuations to fresh highs.

Although some of it may be true, the Trump factor is quickly losing credence as the world settles in on the possibility of a global political shake up and various other players begin to overshadows Trump's often outlandish comments on solving world issues.

One of the participants who've stolen the limelight is Fed chair Janet Yellen whose hurriedly accelerated the central bank's ambitions of seeing interest rates at loftier levels.  

Small Caps have now given back most their post-election outperformance. $IWM $SPY pic.twitter.com/9AcxZMWb5I

— Charlie Bilello (@charliebilello) March 22, 2017 

As normalisation grips the US economy, the ease with which US equities made a spirited sprint to the top of valuations will no longer be seen as safer alternatives emerge for investors to de-risk their portfolios.

In the chart posted above on Twitter by Charlie Bilello, indicates evidence of shifts in capital have subtly shown up but only through measures of relative performance. In this insistence the weakening sector is Small Caps, the last segment of the equity market to receive optimism from bullish enthusiasm yet a great indicator of investors attitude to flirting with risk.

The discrete actions of the so called "smart money" points to a highly significant turning point in world markets, let alone the United States.

From here onwards the convictions behind setting up a fresh bull run will grow dimmer with every new challenge presented to the world economy, a consequence that isn't difficult to envision given the brazenness of the Trump administration, especially in a vulnerable environment.  

Technical Analysis: Kratos Defence & Security Solutions Inc.

An easily spotted resistance of $9.20 marks a pivotal area that'll influence price direction in the coming years as both the bulls and bears battle for supremacy. 

It should be noted that price has managed to assemble a strong series' of higher highs and higher lows over the intermediate period which has brightened the chances of a breakout occurring. 

The sellers were prepared for buyers oncoming at $9.20 and managed to hold the fort well however the performance of the previous week's candle might be a forewarning to sellers that a fresh attack on the level could be underway. 

There's a sharp rise in gradient in the short term uptrend which gives a good indication that the bulls need to sustain these movements to prevent the trend from losing momentum, so there's sure to be a fight. 

The stochastic indicator is currently in the oversold region having been in a similar position on two other occasions. 

A flush below the double top formation hinted at downward pressure to become dominant but if it were to move above the 45 level the could be a quick resurgence of buying.      

Oil prices fall as supply continues its upward march

OPEC's plan to unravel years of price drops in oil markets is turning sour as a decrease in production has seen a temporary upward shift in prices, only to be thrown back down by the risk appetite of US producers who've subsequently opened it's abundant supply tap once more. 

As the evidence starts to overwhelming mount in support of additional cuts in production, the sturdiness of conviction by Saudi Arabia in terms of the level it expects to cuts erodes with every fresh report to be released.       

Graph courtesy of Bloomberg

The major US shale gas suppliers who managed to mitigate the headwinds of the price turmoil are eagerly looking for their reward which would go a long way to paying down the debt incurred during the uncertain period that's seemingly holding back good profits.

This will only serve to make the rebalancing process more complex than what it's put across due to the constant stop start motion of the US suppliers and possibly other global producers looking to deplete the surplus on hold.

Whichever way price turns to in the future we'll only know it's capability and trait once the voluminous stock is cleared, a situation that's far from over ...

Technical Analysis: Delta Air Lines Inc. Part 2

Continuing from the previous post, zooming into the Daily there's a similar pattern of consolidation occurring as we saw on the monthly. 

From the lows of July 2016 the price has been given a mighty push upwards towards $52 amounting to a 57% increase in value in a relatively short period of time. 

This can be due to the turnaround in the fortunes of oil supplies which have been lessening following an agreement by OPEC nations to cut production. 

Currently the price is situated in no mans land and isn't resting on an optimal support or resistance in order to call a direction. 

However if we use the analysis in the previous chart in our assessment of this one it's clear to see that there still remains potential in this stock should we see continued effort by the buyers. 

A price above $52 should see the buyers staging a fresh rally.  

Technical Analysis: Delta Air Lines Inc. Part 1

Delta Air Lines Inc.

Looking at the longer term charts this particular stock has been trapped in a consolidatory motion for some time which has frustrated both sides of the trade. 

The bollinger bands indicates that the price remains in a tight range however it must also be noted that the only time price was able to finish outside either the top or bottom band, the signal produced a false signal. 

This happened during June 2016 and although the break occurred, $35 provided strong support for buyers. Since then we've seen a resurgence of price back up towards the upper band. 

The RSI has been trending to the downside since 2014 but there does seem to be a challenge being undertaken and should this downtrend be broken, an aggressive buying frenzy could ensue. 

US 2-year Treasury's at an 8 Year High

If you were told six months ago that US 2-year Treasury yields would touch a 8 year high you probably would've disregarded such comment as delusional.

Fast forward to March, 6th 2017 and you would've witnessed an unbelievable turnaround in events with sentiment showcasing the incredible adaptiveness of participants to the change of circumstances having observed newly elected US President Donald Trump assume office after a shock victory over the politically experienced Hillary Clinton.

And although the tenure of the Trump administration has gotten off to a hasty start, so has the US Federal Reserve's reasoning to no longer accept the creed "lower for longer" in it's efforts to normalize interest rates.

Ironic one might feel since most other developed nations around the world grapple with economic woes of deflation and low growth; the US has become the exception.

Up until this point we've seen reactive decisions taken by the Fed who have firmly stood behind the argument of awaiting confirmation in economic indicators before acting on interest rate activity.  

The 2-year Treasury #yield has reached the highest level since August 2009 as markets start to price in gradual #Fed tightening. pic.twitter.com/XivYHPAUeW

— jeroen blokland (@jsblokland) March 6, 2017

The shift in market opinion has raised a cause for concern in questioning the independence of the Federal Reserve and whether the hastened belief that the US economy is able to sustain further hikes is truly based on this thought or rather in the interest of retaining seats on the board of the Fed.

President Donald Trump has once remarked during his candidacy that he thought interest rates were being kept artificially "low" in the interest of preserving political power.

If the Fed starts becoming proactive instead of reactive it's likely to put a hold on the economy and reveal where their political allegiance lies.

The separation of uniformity in setting interest rates amongst the largest economic nations of the world does present a risk of producing headwinds in the future and moreso if the divergence between the US and other nations grows wider, a reality which is fast becoming real.

Technical Analysis: iShares Silver Trust ETF

iShares Silver Trust ETF

This ETF has formed a sturdy uptrend since the start of the year with a particularly neat series of higher highs and higher lows in place however yesterday's price movements have left many buyers vulnerable and doubting the strength of the existing trend. 

The depth and size of yesterday's candle is a good indicator of the balance of power between buyers and sellers with the latter firmly in control. The stochastic has in place a triple top formation, confirms the flimsiness of buyers optimism. 

All isn't lost as the 50 day moving average moves above a key support area of $16.25 that should act as strength for buyers if the price gets closer. 

Overall it looks likely that we'll see a consolidation take place over the next few weeks with price formation on top of traders mind as the sustainability of the short term uptrend is tested for longevity.