The sector activity represents the sentiment in the market… nobody knows where to go, except in the case of energy which is acting like the QQQ in November of 2021…. JUST BUY THE DIPS.  That, of course, will be a problem at some point, just not now, not yet.

This market is continuing to see volatility that leads the market to a whole lot of nothing.

The only good thing to come with sideways movement is the changes this makes to the technicals on some of the major ETFs. 

The Bollinger bands tighten, and the 20-day, 50-day, and 200-day moving averages move closer together and in some cases even collide.

This makes your job as a trader that much easier as it starts to create simple setups for new targets on a lot of the stocks and ETFs you are likely already watching.

What the hell were the JETS thinking as this trend is just getting an unreasonable amount of “lift”…

On a broad level, the JETS have a weird seasonality pitch in December as the sector wins more often than it loses in the month, but the average performance is 0.0%.  

That tells us that there is a lot of volatility that averages out to a nothing burger.

This means that you have to look at the technicals and measure the danger zones.  Let’s do that on the ETF….

As you can see from the chart above there has been a lot of noise over the last month but, as history tells us, it has generally been a sideways movement.

The technicals are setting the market up a bit here as this may look like the safe harbor everybody wants it to be…

Let’s start with the Bollinger bands – since I have been harping on their importance over the last week or so. It may look like nothing special is happening with them at the moment – but in reality, this is the tightest they have been since September, coincidentally, followed by a sharp decline in the price.

Along with that, this ETF has been riding the top Bollinger band all the way up to its current level, this trend was broken the moment it broke its 200-day Moving average.

Well, guess what it just did yesterday… Broke its 200-day moving average… again

Look for selling pressure to go up as the stock price begins to drop. Combine this with the low volume we are seeing and we are in store for a sharp decline 

You guys know that I love a volatility trade, at least when it goes my direction.  Well, we’ve seen volatility in almost all areas of the market, but there’s one sector that’s been quiet… the pipelines.

My volatility scans picked up this quiet group of stocks that tend to perform well when oil prices and demand are on the rise.  Duh.

A larger number of the limited partnerships (LPs) like AMLP are showing signs of a pending breakout as their volatility has been throttled over the last month of trading.  Let’s look at the popular AMLP shares…


This is another Bollinger band setup that I can get behind. Because the stock is just moving sideways they tightened up quickly and we are already seeing a break below the bottom band.

On Tuesday we saw it start its decline when it dropped below the 20-day moving average, with the volume we are seeing it is hard to see any reason the ETF will find any support until it gets to the $39 level and hits the 50-day moving average.

This would send investors into a frenzy just like the move we saw in October driving the price higher – the ETF would then just be another value buy for people looking to get into the energy sector before the end of the year and the upward trend would continue.

I am sorry I was not able to be in the room this morning due to being sick – but rest assured my eyes are on the market searching for new opportunities just like these each and every day.

That is why I trade the technicals, if you learn how they lead you to a profitable trade, you will love them and can’t go a day without watching the markets for setups like these regardless of being sick or not.

I hope to feel better so I can be with you guys tomorrow, for now, I am off to get some rest.

 


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