Stock Market Analysis Alphatrends Anchored VWAP June 30 2023
00:00 Introduction and Year-to-Date Gains
Section Overview: Brian Shannon from AlphaTrends.net provides an update on the market's year-to-date gains.
• Semiconductor sector is up 50% year-to-date.
• NASDAQ is up 38% and 41% off its low.
• S&P is only 25 basis points off its year-to-date.
00:25 Prior Days Volume Weighted Average Price (VWAP)
Section Overview: Brian discusses his strategy of buying above the prior day's VWAP.
• Brian wanted to see the market come down to the prior day's VWAP before buying.
• The market provided a perfect entry at that level without going below the previous day's low.
• This strategy was shared with AlphaTrends subscribers and on YouTube for free.
01:06 Buying Pullbacks and Selling Breakouts
Section Overview: Brian explains his approach of buying pullbacks and selling partial positions on breakouts.
• Buying during a pullback is not recommended, as it is better to wait for confirmation.
• Selling partial positions on breakouts provides a comfortable exit point.
• The market has survived the test of the 5-day moving average and shows higher highs and higher lows.
02:12 Expectations for Next Week
Section Overview: Brian shares his expectations for next week's market performance.
• A small pullback may be expected next week after recent gains.
• Filling gaps in price may take time or may not happen as expected.
• Monday will have only half a day of trading, followed by a quiet Tuesday due to market closure.
02:29 Focus on Price Action
Section Overview: Brian emphasizes the importance of price action and dismisses concerns about volume.
Price Action Importance
• Only price action matters in trading.
• The market is currently in a healthy stage two uptrend on the weekly timeframe.
• There is no indication of a double top formation unless it breaks below a specific point.
03:07 Overall Market HealthSection Overview: Brian discusses the overall health of the market and its proximity to year-to-date highs.
• A slight pullback may occur, but the market shows higher highs and higher lows.
• The NASDAQ is only a few percent away from its year-to-date high, indicating strength.
Note: Timestamps are approximate and may vary slightly.
03:51 Understanding Market Pullbacks and Buying OpportunitiesSection Overview: The speaker discusses the concept of market pullbacks and buying opportunities, emphasizing the importance of buying when buyers regain control in the shorter-term time frame.
Market Pullbacks and Buying Opportunities
• Pullbacks can provide buying opportunities when buyers regain control near the 20-day moving average.
• It is not always guaranteed that buying at the 20-day moving average will work, but it is preferable to buy when buyers regain control in the shorter-term time frame.
• The speaker highlights a scenario where the market pulled back to the prior day's volume-weighted average price anchored to the beginning of that day. This was an ideal place to purchase as it made a higher high above the daily volume-weighted average price.
04:10 Strategies for Entering and Exiting Trades
Section Overview: The speaker explains strategies for entering and exiting trades based on specific scenarios, such as breakouts and pullbacks.
• It is important to enter trades at opportune moments with low risk and momentum beginning.
• Breakouts can be potential entry points, but it is advisable to wait for consolidation after a breakout before making a purchase.
• Buying after a pullback, where there is a higher low formed, can also be an effective strategy.
• Selling some positions on a breakout can be a prudent move.
• It is generally not recommended to buy after a rally or breakout.
• Setting stops and using multiple time frames together are essential for managing risk.
04:29 Lessons from Anchored Volume Weighted Average Price (VWAP)
Section Overview: The speaker mentions lessons learned from using anchored volume-weighted average price (VWAP) as part of trading strategies.
• The speaker refers to a book on anchored VWAP techniques that provides valuable insights and strategies.
• Anchored VWAP helps in finding optimal entry points with low risk and understanding where to set stops.
• There are numerous examples of lessons derived from using anchored VWAP.
04:51 Evaluating Biotech Market and Potential Bounce
Section Overview: The speaker discusses the biotech market, its performance, and the potential for a bounce.
• The biotech market is described as acting poorly.
• The speaker mentions the importance of considering the anchored volume-weighted average price off the all-time high as a resistance level.
• While there is a possibility of a bounce in the biotech market, it may not be the best market to be involved in due to resistance levels.
05:09 Uptrend Analysis and Consolidation
Section Overview: The speaker analyzes different markets, including NASDAQ and Russell 2000, focusing on uptrends and consolidation patterns.
• NASDAQ is characterized by a beautiful uptrend.
• Selling some positions on breakouts can be considered.
• Consolidation periods are expected after breakouts.
• Initially considered a waste of time due to declining five-day moving average, but it bounced from the 200-day moving average and year-to-date anchored VWAP.
• Despite this bounce, it may not be the best market to engage in due to resistance levels near all-time highs.
05:33 Analyzing Breakout Scenarios
Section Overview: The speaker explains potential scenarios for entering trades after breakouts or pullbacks.
• Buying after a breakout is generally not recommended; instead, waiting for consolidation after a breakout can provide better entry opportunities.
• A potential scenario involves a breakout, followed by a pullback towards the five-day moving average, and subsequent consolidation above and below it. This can be an ideal place to make a purchase with a stop set below the higher low.
06:07 Celebrating Successful Trades and Structured Approach
Section Overview: The speaker emphasizes the importance of celebrating successful trades and having a structured approach to the market.
• Successful trades that align with a structured approach should be celebrated.
• Having a structured approach increases the likelihood of scenarios playing out regularly.
• It is crucial to set clear exit points, as indicated by making new lower lows in this case.
06:48 Evaluating Biotech Market and Potential Bounce (Continued)
Section Overview: The speaker continues discussing the biotech market's performance and potential for a bounce.
• The biotech market continues to act poorly.
• There is speculation about a potential bounce if it can break above certain levels.
• Resistance levels from anchored VWAP and declining moving averages may impact its performance.
07:29 Analyzing Dow Jones Market
Section Overview: The speaker analyzes the Dow Jones market, highlighting its behavior and potential for significant moves.
• The Dow Jones market broke back above its anchor volume-weighted average price from prior peaks, indicating positive behavior.
• On the weekly time frame, there is pent-up energy suggesting the possibility of significant moves.
• A resistance level since last year's fourth quarter indicates potential patterns like an inverted head and shoulders pattern with a price objective of 375.
08:36 Importance of Structure in Technical Analysis
Section Overview: The speaker emphasizes the importance of structure in technical analysis using various tools such as anchored VWAP levels, five-day moving averages, and patterns.
• Structure provided by anchored VWAP levels, five-day moving averages, and patterns helps in formulating a technical plan for the market.
• These tools provide support to back up trading decisions and strategies.
Section Overview: The speaker discusses the possibility of a potential failure in the market and warns about the importance of monitoring banking stocks. They mention that if these stocks break below a certain level and stay there for a day or two, it could indicate bigger trouble. However, they clarify that they do not trade banking stocks themselves.
• It is important to be aware of the potential risks in the market.
• If banking stocks break below 39.5 and stay there for a day or two, it could spell trouble.
• The speaker does not personally trade banking stocks.
Section Overview: The speaker talks about the impact of banking stock performance on the overall market, particularly the S&P 500. They mention that energy stocks are rallying slightly while oil continues to show weakness. They also note that some energy names, especially natural gas plays, are starting to show signs of improvement.
• Banking stock performance can have an effect on the overall market.
• Energy stocks are experiencing a slight rally.
• Oil is currently weak.
• Natural gas plays, such as RRC and PR and TELL, may be worth considering.
Section Overview: The speaker discusses specific stock recommendations and focuses on natural gas plays like RRC and PR and TELL. They mention that these stocks are starting to show positive movement. Additionally, they briefly mention their analysis of another stock called ICE (International Continental Exchange).
• Natural gas plays like RRC and PR and TELL are showing positive movement.
• ICE (International Continental Exchange) is analyzed by the speaker.
Section Overview: The speaker shares their approach to buying stocks based on support levels. They explain that they prefer to buy when buyers take control rather than on a test of support. They mention their purchase of a stock called ICE after it broke above its all-time high and found support at a prior resistance level.
• The speaker prefers to buy stocks when buyers take control.
• They purchased the stock ICE after it broke above its all-time high and found support at a prior resistance level.
Section Overview: The speaker provides an update on their position in the stock ICE. They mention that they are still holding the stock and share their stop levels for both investors and swing traders. They also encourage viewers to like, comment, and engage with the video.
• The speaker is still holding the stock ICE.
• Stop levels are provided for both investors and swing traders.
• Viewers are encouraged to engage with the video by liking and commenting.