Riding the Bullish Wave

Published on
September 6th, 2018
Duration
8 minutes

Riding the Bullish Wave

Technical Trader ·
Featuring Dave Floyd

Published on: September 6th, 2018 • Duration: 8 minutes

Technical analyst Dave Floyd, founder and president of Aspen Trading Group, likes betting on further gains for the S&P. In this video, he examines the charts and breaks down his trade. Filmed on September 4, 2018 in Bend, Oregon.

Comments

  • DR
    David R.
    11 September 2018 @ 09:33
    Dave, have you noticed that DXY is making a head & shoulders on the daily, while the EURUSD is making a H&S on the 4-hr chart. What does it mean? Some short-term dollar strength/recovery ahead but intermediate-term dollar weakness? My TA of US stocks, in sum, broadly expects US stocks to consolidate then breakout higher later, which would be inverse to the currency move I described. But keeping an eye on key levels of course.
  • MC
    Minum C.
    7 September 2018 @ 02:09
    This is interesting in that price is king for most technical analysts (including Dave) whereas others might place more emphasis on things like sentiment and momentum. It's profits that matter in the end, but risk also matters. Reduce risk by using an index ETF like SPY? Sure, but at least acknowledge that over 25% of your sector exposure is in technology.
    • DR
      David R.
      7 September 2018 @ 08:33
      Some guests have suggested that an index ETF like SPY is an extremely risky position, due to the preponderance of passive investing. The whole retail space and more is crowded into that, which in turn is mostly crammed into a handful of sky-high tech stocks that look as vulnerable as similar stocks did in 1973, 1999 and 2007 before subsequently crashing near 80% each time. Watch out when prices start to reverse and the mindless herd positioned altogether decide to take profits and "sell" - with no more buyers and NO-BID.
    • EF
      Eric F.
      7 September 2018 @ 23:37
      Great comments guys and agree with both of you. I’ve been bearish for a while - and wrong! Lol. I think the question for me at the moment is - are we in late 2006 or late 2007 for comparison? Feels like the latter but probably the former. Dave Floyd has forgotten more than I’ll ever know on this stuff, and he’s probably right. For me though, I’m just not chasing too many profits at this point because I feel there are so many land mines out there for the world economy to trip on. Would rather bunker down and prep for some good shorts when it all becomes a bit clearer. I’ll keep an eye on this recommendation though, as always good to learn - particularly about one’s own temperament.
  • GR
    George R.
    6 September 2018 @ 22:33
    Shame he didn't look at the weekly RSI which hit 90.5 in January. The S&P has retested the Jan high. Will the weekly RSI break 90.5 again? Doubtful. Welles Wilder failure swing is primed.
    • DF
      Dave F. | Contributor
      7 September 2018 @ 00:27
      The RSI has a few flaws, as does every indicator. The Composite Index seems to offer a better solution. The Composite Index has moved above the Jan high you reference.
  • RA
    Robert A.
    6 September 2018 @ 17:48
    Right or Wrong, well reasoned as usual! Pithy and concise—an excellent update from Dave. Thanks RV.
  • PD
    Paul D.
    6 September 2018 @ 15:23
    Happy if you think it's going up, but the wave count looks a little spurious doesn't it? Overlapping counts in wave 1.....magenta waves 1 and 2 barely perceptible.
    • DF
      Dave F. | Contributor
      7 September 2018 @ 00:29
      Wave count is part of the process, but never the whole deal for me. Not sure I agree with your observation regarding 'spurious' but that argument could have been made many times int he last few years.....and prices continue higher.
  • MN
    Michael N.
    6 September 2018 @ 14:40
    I love Dave's presentations. He's nailed every one he's presented so far that I've watched. As hard as it is for me to swallow his analysis he's given me no reason not to at this point. With most of the crowd pushing and positioning for the crash narrative it's likely that it won't happen as soon as expected. I'll be reevaluating some of my positions. Thanks Dave. Looking forward to the next one...
    • DF
      Dave F. | Contributor
      7 September 2018 @ 00:30
      Thanks Michael....I appreciate your detailed observations on my previous picks....my track record is what I stand by....my approach, techniques, presentations etc etc are all a distant second....those don't grow a trading account.
  • DR
    David R.
    6 September 2018 @ 13:07
    Thank heavens for the technical analysis here. I don't care much about fundamentals, which at best are barely relevant and actually often misleading. Re: "exciting summer trading", remember 2011 and 2015. Agree with Dave that the S&P breakout from the consolidation wedge is bullish, which is basic Trading 101, and all the bearish fundamental guys are just wrong like they've been wrong for years. So S&P up, dollar down. Keep on truckin, Dave.
  • DR
    David R.
    6 September 2018 @ 12:30
    The weak, plunging US dollar reinforces the short-term likelihood of a US equity rally, at least in nominal terms. US has dollar utterly collapsed from Aug. 15, and the extremely small short-lived reaction rally last week before current resumption of the dollar weakness/plunge (against virtually all currencies now), indicates the dollar is setting up for a major crash. Except for a handful of marginal EM currencies, the dollar has never even gotten close to highs of last year before puking like it is again now. Even the much-maligned CNY easily held critical resistance and the dollar is going down against that too. While some EM FX have been weak, several have gained double-digits against the dollar, so you cannot lump all the apples altogether. Now even Jeffrey Gundlach at Double Line is calling for "a dollar crash". Bottom line: dollar going lower, much lower. That's supportive of US equities, nominally, but selected foreign equities are far superior investments in currency-adjusted terms. So get OUT of dollar and dollar-based assets if you want to generate alpha.
    • AM
      Artur M.
      6 September 2018 @ 13:25
      Too early to call imo. October is target in time for reaction high in many mkts. Nothing goes in straight line
    • DR
      David R.
      6 September 2018 @ 15:12
      Artur, if you are talking about US equities, I'd agree with you it's too early to call (and maybe a long way off yet, or not). But the dollar clearly peaked & turned in December 2016, which was a major turn, lower than its previous major turn. Dollar continues to make lower highs and lower lows on the significant time frames. Time is fractal and the primary trend of the dollar is clearly bearish overall, notwithstanding the occasional substantial bear market rally like the one of late (which has failed to break significant technical resistance such as 104 DXY, nor even 99-100 which indicates serious long-term weakness to me).
    • DR
      David R.
      6 September 2018 @ 15:16
      ..... and gold appears to have turned in Dec 2015, altho gold is still hated.
    • NF
      N. F.
      7 September 2018 @ 18:04
      Interesting analysis despite the hyperbole
    • DR
      David R.
      11 September 2018 @ 09:35
      Nelson, hyperbole gets views/reads. Youtube/google prove that. Lol. Thank you.
  • V!
    Volatimothy !.
    6 September 2018 @ 12:09
    Don’t agree but like the presentation.
  • CD
    Chris D.
    6 September 2018 @ 11:47
    So, Amazon going to 2500 USD? Well, what is an additional 250 billion USD between friends.. However, don't forget that QT kicks into a higher gear (50 billion instead of 30 billion/month) and ECB tapering in Q4. EM collapse. Could be the start of something cataclysmic, especially when everyone and their brother is long the SPY based on "technicals" not the law of large numbers..
    • DR
      David R.
      6 September 2018 @ 12:36
      The microscopic level of QT is utterly meaningless, and on the thinnest veil of an excuse, likely to be terminated or even reversed with more QE. The bankrupt States of America has no alternative. In Europe, nobody but the ECB will buy the majority of sovereign European Bonds, the tape shows no-bids, so it's impossible for the ECB to end QE in Europe. And Draghi knows it, he is leaving and just wants to get out in time before the Eurozone blows up.
    • DR
      David R.
      6 September 2018 @ 12:44
      "The microscopic level of QT is utterly meaningless" . To elaborate, $30B - $50B of runoff (the so-called QT), is a pimple on a fly's butt relative to the nearly $5T on the Fed balance sheet, and the $200T - $260T of total debt in the US including the all-important "off balance sheet".
    • CT
      Christopher T.
      8 September 2018 @ 19:28
      Dave RE: your take on the ECB, wouldn't that be dollar bullish?
    • CT
      Christopher T.
      8 September 2018 @ 19:28
      Dave RE: your take on the ECB, wouldn't that be dollar bullish?
    • DR
      David R.
      11 September 2018 @ 09:27
      Christopher, you're right. But that's a fundamental I described. There are scores of other fundamentals that hurt USD. We cannot sort out so many fundamentals, which tend to lag anyway (eg., NFP). So I strongly prefer technicals. Very interestingly, the DXY is making a head & shoulders on the daily, while the EURUSD is making a H&S on the 4-hr chart. What does it mean? Hmm.
  • Nv
    Nick v.
    6 September 2018 @ 11:23
    US ignorance of EM melt-down too shall end. Only 58% of Apple's profit ex-US and 40% S&P500 sales ex-US. The earnings downgrade cycle is about to commence. All the best of luck
    • DR
      David R.
      6 September 2018 @ 12:37
      Smart money is buying and already bought in August. Firms like Evergreen Gavekal, who've made 45-50% for clients in EM markets just since mid-August.