US stock market index outlook, with the help of the Dow Jones Transportation

 

I decided to share Fridays GUNNER24 Trade of the Day buy alert to all Gann-oriented traders, after the US equity bulls reached their first interim target of the bounce.


When a new uptrend starts his ascent is full of energy, and the start of a new uptrend is by far the easiest part in our trading business. Especially after such a brutal sell-off. Good Luck!

 

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GUNNER24 Trade of the Day 11/02/2018

                                                                                                                     

 

Dear GUNNER24 Traders,

 

The 1:3 Trade: Buy IYT ETF at 181.70 

 

Our 1:3 trades are A) adjusted to a longer term, having a spacious stop-loss for the development not to be endangered and B) have to show a risk-reward ratio of more than 1:3.

 

As expected, the global stock markets are now reacting in a very violet way, stunning a lot of folks. Even after mixed Apple earnings report with earnings fine but weaker guidance and AAPL shares pre-open down, by -6%, I have a sea of green for Asian, European stock markets and US stock index futures.


Think we currently observe an upswing that should be oriented to the 13 Fib number. This bounce could unfold for at least 12 to 14 trading days!, before the upswing highs should arrive. Followed by a deeper downswing, which MIGHT test October lows in a very serious way.


Time table example for the S&P 500 future contract:


October 2018 low, final correction low, is made this week Monday, October 29. So, today is day # 5 of bounce. Add 7 trading days and this is 12 and this gives November 13th! for the possible bounce high.


IYT is the iShares Trust - iShares Transportation Average ETF and seeks to track the investment results of the Dow Jones Transportation Average Index composed of US. equities in the transportation sector.


In this often trend-setting index, we now try to profit from the obvious 2018 Double Low pattern that has arrived in the weekly & monthly charts.


Because the second pillar of the 2018 Double Bottom 100% exactly tested natural GUNNER24 Arc Support in the monthly chart from above, the Oct18 correction low made at 175.50$ with a 99% likelihood is the FINAL LOW of entire 2018. Thus, this and any other leading US equity index usually should be positive backed for the next few weeks, even months.

 

 

But... in course of just 1 year we observe a Double Top & a Double Bottom pattern on monthly and on weekly base and such extremely rare consequence of the same important turning pattern is sign of confusion, and this usually leads to a long-lasting trading range.


==> This market ALSO the next 8 to 12 Months might be caught within a trading range, whereby range resistance is at 205$ (horizontal) and range support (horizontal) resides at about 175$-177$!


Above is a classic monthly 3 Candle up starting at # 1 // 2016 Low.


Lower line of 3rd double arc - natural bull market uptarget out of 2016 Low - at 1. Jan18 ATH (alltime-high) was responsible resistance for printing the first pillar of 2018 Double Top.


Upper line of 3rd double arc test from below at 2. Sept18 ATH has cemented the 2018 Double Top.


= 3rd double arc above is confirmed ATH and confirmed month high resistance! Upper line of 3rd is sharply defined falling month high resistance!


The pillars of the 2018 Double Low found backtest support at overall 2nd double arc support, whereby upper line of 2n double arc was accurately tested back at 3. 175.50 // likely final 2018 Low.


= the downwards sloping 2nd environment is double arc support on combined monthly and yearly base.


Both pillars of the 2018 Double Low are spike lows, signaling important, respective final bearish exhaustion and nearly always when we observe a bear exhaustion precisely starting at confirmed support arc we have to state that this test was a very important test and possible final test of that rail. That`s why I`m nearly totally sure that Oct18 low marked the final low of 2018 and market is now in bounce mode in the weekly and monthly time frames!


==> Please next watch the in course of October 2018 finally downwards broken 2*1 Angle, which was prior overall important bull market support. Usually current running bounce has to test back that important Gann Angle which is now monthly closing base resistance. Think backtest of 2*1 Angle in course of November 2018 is imminent and necessary. Thus backtest of 2*1 Angle in course of November 2018 is shortterm uptarget of the long attempt:


==> Shortterm uptarget is 4. Nov18 NO BRAINER 2*1 backtest at 192.50$!


Upcycles starting at a final low of the entire year tend to be strong (price) and fast (time), thats why market could test back the lower line of 3rd double arc main upmagnet resistance pretty fast! Even maybe in course of December 2018, IF IYT succeeds in re-conquering the 2*1 Angle by November 2018 close!


==> The POSSIBLE! Main target for the at 3. 175.50 // likely final 2018 Low started upcycle is backtest magnet of lower line of 3rd double arc resistance which is at 202.50$ for the December 2018 candle!


By the way, I would not be surprised if this index - and the other leading US stock market indexes seek to close 2018 near course highs...


Next follows the weekly chart and the currently most ruling GUNNER24 Setup which is a "classic" 5 Fib number down which has developed after Sep18 ATH.


See that 3. 175.50 // likely final 2018 Low bounced out at 1st double arc downtarget. The 1st double arcs in a down setup are always most natural countertrend targets.


And a combined weekly & monthly Double Low starting at natural countertrend target is just bullish stuff/observation, always signaling very important bearish extreme was seen:

 

 

The upswing which began at 175.50$-2018 Double Low and 1st support has reached triple resistance magnet in the weekly. Yesterday market closed at 186.57$, thus at Lower Weekly Resistance Line, Blue Arc and first square line. Actually, market is testing back very, very important = strong bounce resistance! But todays futures signal that this triple resistance could be overcome on weekly closing base with todays close!


Can you imagine what should happen if this triple resistance will be overcome on weekly closing base? Then the shorts have to run for the hills at least for another week candle (or 5 to 7 trading days) and ETF-price has rally further, likely for the "quite normal..." backtest of the rising Upper Weekly Resistance, resp. 2*1 Angle, respective mid-price of first square!, all together forming future triple resistance upmagnet or bounce magnet at about 197.60$.


This 197.60$ Triple Resistance magnet is obvious existing upmagnet on yearly base and is therefore another potential final target of the bounce!


==> A 197.60$ work off of middle of square backtest magnet sometimes in course of December 2018 is possible weekly uptarget!


If the market struggles with the final overcoming of 186$-187$ triple resistance magnet (Lower Weekly Resistance Line, Blue Arc and first square line) later today, resp. the next 1 to 3 trading days we should try a long entry at the then possible, even likely backtest of 181.70$ which for sure is now re-conquered weekly horizontal support.


==> Please buy possible backtest of dark-green highlighted weekly 181.70$ support horizontal until end of next trading week! The 1:3-Buy-Limit is valid till 11/09/2018!


==> Shortterm uptarget is imminent backtest of very attractive monthly 2*1 Angle, now usually a stronger resistance in the monthly time frame. 2*1 Angle is at 192.50$ for November 2018. 192.50$ is minimum uptarget for the bounce!


==> Possible Main bounce uptarget is 202.50$!, and might be reached in course of December 2018.


==> Please place the SL for the 1:3-Trade long setup at 178.40$.


Risk = 3.30$. Potential reward = 10.80$. Risk-reward ratio 3.30/10.80 or 1:3.27


GUNNER24 Trade of the Day orders:


Market: iShares Trust - iShares Transportation Average ETF (IYT)


Orders: Buy-Limit at 181.70. Stop-Loss (SL) at 178.40. Shortterm uptarget is 192.50. Possible weekly uptarget at 197.60. Possible Main bounce uptarget at 202.50. Buy-Limit order valid till 11/09/2018.

 

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Eduard Altmann