Searching for the Bottom

Published on
August 8th, 2019
11 minutes

Searching for the Bottom

Technical Trader ·
Featuring Brian Shannon

Published on: August 8th, 2019 • Duration: 11 minutes

Brian Shannon, founder of Alpha Trends, breaks down this week's wild price action in equities. Using anchored VWAP as his guide, Shannon explains why the bottom for equities may not be in just yet. He also drills down on one particular stock that he thinks has a high-probability chance of weathering a continued downtrend. Filmed on August 6, 2019 in Denver.



  • LL
    Louis L. | Contributor
    15 August 2019 @ 23:12
    Brian is one of my favorite technicians. He has solid intuition. Keep it up Brian!
  • HT
    Hans T.
    9 August 2019 @ 19:46
    Hi Brian, Thanks for the analysis. You asked for some comments, so here are mine: I've been trading since 87 and have found the usefulness of TA declining to become almost irrelevant since the advent of machine learning and high frequency trading, both of which I have some experience of. The vast majority of trades are originated and executed by algorithms, so talking about where "people" set their profit targets and stops based on lines drawn on charts is very quaint. The trend following CTAs which are based on TA, volume and volatility signals have performed very poorly over a number of years as their trading patterns became predictable, allowing for easy pickings by algos which were set up to front run them. That is why moving averages, a staple signal for decades, don't work anymore, to take just one example, and the vast majority of the original large CTAs went out of business. Also, a large number of block trades are done over the counter and not reported to the exchanges, so following the exchange volume is misleading. There are many other reasons why TA doesn't work, for example political and central bank decisions which increasingly have an outsize impact on markets, so unfortunately I don't use it anymore despite having done so for a long time.
    • BS
      Brian S. | Contributor
      12 August 2019 @ 17:11
      thanks Hans. I think you are correct about a lot of the old TA ways. Have you studied VWAP? There are clear programs based around VWAPs on all timeframes. I view my job as a technicial to identify the likely battle levels (often VWAPs or still SMAs) wait for evidence of a turn at those critical areas, place my trade and manage risk. How do you time your decisions if you no longer find value in TA?
  • MT
    Mike T.
    10 August 2019 @ 15:56
    I would like to extend full and sincere appreciation to Mr Shannon for inviting comments from those that gave a thumbs down. I will admit to being one such person. I hold a profound negative bias towards Technical Analysis as I've never discovered any maths/statistical/probability based evidence either of my own or from others to support the claims of those that believe TA has predictive capabilities. I have no reason to doubt the professionalism or sincerity of Mr Shannon or any other Technical traders that often appear on RV, but for me TA is subjectivity layered upon subjectivity. I will concede one possible benefit of TA it's often used to good effect to get folks first starting out engaged in the markets.
    • BS
      Brian S. | Contributor
      12 August 2019 @ 17:08
      Makes sense Mike. I don't think you could convince me that fundamental analysis gives me a better edge. I always say "do what works for you but keep an open mind."
  • WW
    Wayne W.
    11 August 2019 @ 03:19
    Yes Brian, I did downvote, but nonetheless do look forward to your next appearance on RV. I do like Technical analysis up to a point. Twatter is just another grossly overvalued US stock among-st obscene valuations in general for the Tech space. When the ponzi scheme with its rampant buybacks reverts to the mean I will probably look at buying Twatter at $15 or so. Hey what's the hurry when playing in the propped up and manipulated casino that is the US so called 'market'. Given the number of twats on Twitter I have called it Twatter for quite some time. The best thing about the video for me was the use of Twatter as an example. LOL
    • BS
      Brian S. | Contributor
      12 August 2019 @ 17:04
      thanks for the feedback Wayne
  • WC
    William C.
    10 August 2019 @ 19:39
    I really enjoyed this video. I believe the amount of "thumbs down" is a result of RV viewership turning decidedly bearish following the Recession Watch bonanza from the prior 10 days or so.
  • BS
    Brian S. | Contributor
    9 August 2019 @ 02:37
    I am always interested in the feedback. Would any of the people who gave it a "thumbs down" have an opinion of what you think would make it better? Constructive criticism always welcome. Do you think the SPY scenario is wrong or maybe you dont like TWTR? Step up with an opinion, not just a lame thumb down..
    • CM
      C M.
      9 August 2019 @ 14:03
      I gave you a thumbs up based on making strong calls utilizing the tools of your trade. As more of a fundamental investor and less technician, I find charts interesting but don't base my investing decisions on lines between points, though I do find the trading trends interesting, but have to marry to fundamentals as well. So maybe some thumbs down were based on the presentation of the technicals. But I do find it common on RV that people will vote thumbs down or make negative comments because they disagree with the stated opinion irrelevant of how the info was presented.
    • BS
      Brian S. | Contributor
      9 August 2019 @ 16:52
      thanks for the feedback C.M. glad you find it useful. You are probably right about some people disagreeing with the opinion. We all learn more with thoughtful feedback like yours!
    • KD
      Kaj D.
      10 August 2019 @ 00:24
      Hi Brian, thumbs up from me as well. Been at TA for a few years now but always learn something from more experienced people like yourself & I did here – so thanks. Don’t fret too much about thumbs down. Several times I’ve commented little more than to thank people for a great interview & got a thumbs down……..go figure?? One source of frustration is that anchored VWAP is not available to me on the 4 or so platforms I use – don’t want to change but then again maybe I should! Cheers
  • JW
    Joel W.
    9 August 2019 @ 19:06
    Brian, I appreciate your cogent analysis, and am happy to say I received value from your look at spy and twtr both. Thanks, and come again soon. Joel
  • BK
    Boris K.
    9 August 2019 @ 16:26
    i like this guy... very specific targets with reasoning behind it clearly explained
  • Nv
    Nick v.
    8 August 2019 @ 09:51
    Anchored VWAP is a very useful tool. Thanks Brian Which trading platforms provide anchored VWAP?
    • BS
      Brian S. | Contributor
      8 August 2019 @ 19:54
      As a point and click tool, it is on TC2000 and TrendSpider
    • tr
      tom r.
      8 August 2019 @ 20:10
      Chart was fuzzy and way out of focus. Very difficult to get anything out of this because of that. Get a new camera man.
  • SC
    Stephan C.
    8 August 2019 @ 17:38
    Always pick up a piece of really sound trading wisdom from Brian- great step by step walk-through of the trade set up as well. Nice vid, thanks.
  • RC
    Ryan C.
    8 August 2019 @ 17:11
    I like the thinking here, but I think it would be helpful to use futures market along with SPY. ES1 futures fell below the 200 day moving average and then reversed outside of normal market hours so it is not indicated on the SPY or SPX. Having seen the 200 day be tested helped me know that we are likely to keep moving up, and may be less likely to test this level again in the immediate future. Just my thoughts, thanks for the video.