ULTA looking bearish Update 5

We got a very constructive candle today. Nice big red bar with a close below the 8ema and 50sma, and near the bottom of the bar. In fact, the low was only $2 over our target. Close enough to tempt me to get out with a nice profit, but I fought the urge and held on. It looks very likely we'll hit the target tomorrow.

Looking forward to the market open.

ULTA looking bearish Update 4

Yesterday started with a nice downward drive and looked like we might hit our 219 target, but then it retraced and closed just above the 50sma. In addition to that uncertainty, the candle closed as a doji, which symbolizes uncertainty.

We're still below the 8ema and stochastics are above 20%, so we want to hold our short position. In addition, the little bounce we had the past three days and yesterday's slight break below it sets up a possible AB/CD lightening bolt pattern. I added the yellow bold vertical line segments as the projected measured move. The thin horizontal yellow line is half the measured move, which I find is more reliable than the full measured move. Notice the halfway point of the AB/CD measured move is very close to our target of 219 which we established from the white line segments based on the Head & Shoulders pattern and the 50% Fibonacci level. This confluence adds confidence to the target level.

ULTA looking bearish Update 3

As you can see we're bouncing off the 50sma. Annoying but not surprising. Especially annoying because all the major equity indices are down today and the VIX is up. My Feb 230/210 Put Spread position is about break even at this point but I'm going to hold on and see how price reacts to the bottom trend line of the up channel. We're currently still below the 8ema which is encouraging. It would be best if we don't close over the 8ema, but even if we do, I'm going to use the trend line as my stay-in/get-out indicator instead of the 8ema on this one because I think it carries more weight. Also notice the 20sma coincides with the bottom trend line of the up channel. This could add some additional resistance.

I expect we'll reject off that trend line, if not earlier off the 8ema, and head back down to at least the 50% Fib around 219, which is still my target.

ULTA looking bearish Update 2

The desire to exit today was strong with this one. 218.50 is both the 50% Fibonacci retracement as well as half the measured move for the Head & Shoulders pattern. So my 219 target seems like a good one. Stochastics are just at the 20% level so its not oversold quite yet.

But, price bounced off the 50 SMA today just after breaching it a little. We have a nice profit already if we got out near the 50 SMA, and there's only 2-3 weeks left on our option, so if we get a bounce tomorrow to go back up and test the bottom of the channel before continuing down, that might take several days which starts to become a Theta decay concern.

However, this pattern is so strong and the stochastics tell us we have some more room to the downside tomorrow, I fought the urge to lock in profits and decided to hold on for another leg down tomorrow and hit my original target.

ULTA looking bearish Update 1

We closed the day below the channel, so now this looks like a really good entry. I jumped in too early and got the Feb 230/210 Put Spread for $5.41 this morning at 9:32am.

By the way, another pattern I saw but forgot to include in my previous post is a Head & Shoulders. The neckline, which is a little above the bottom of the channel, was broken today.

If things go well we might hit the target around 219 this week, if not tomorrow. I want to be out before the upcoming Earnings Report scheduled for 3/1/18 after market close. I expect we'll be out long before then.

ULTA looking bearish

Here's what I see that makes me bearish on ULTA as of 8:45am 1/23/18:

Double Top
Bounce off 200 SMA
Evening star candle pattern
Close below 8ema
Doji gap down on stronger volume

I'm looking to get a Vertical Put Spread today if we start going further down, assuming there's a decent bid/ask spread. Looking at 230/220 and 230/210 Feb and Mar expiration. However, its more risky to enter this trade before we get a close below the up channel. So, I'll go in light before a close below the channel and add to my position after. It would be safer to wait to enter the trade at all until we do get a close below the channel.

Targeting the 50% Fib retracement which is close to the 50 SMA (in red) around 220.

Possible YM Futures Resistance Update 2

Well, we got 1 day of minor rejection of the resistance area, then a gap and run to the upside, and again today 1/12/18 as of 12:45pm ET.

So, we didn't get the more substantial pull back one would expect. This Bull market looks crazy strong in the face of increasing interest rates. There are multiple unfilled gaps in the YM chart over the past several months. There hasn't been a close below the Daily 8 EMA since mid-Nov. In addition to showing these things on the chart above, look how much time Stochastics has spent above 80%.

There are many other statistics I've heard that indicate we might be seeing exuberance. Guess we're just waiting for the last bear to give up. Meanwhile, I'll be watching for technical patterns suggesting a possible medium term top, followed by confirmation. But, until then, on a short time frame, look for bullish setups on markets to go with the trend, while using a good hedge.

Possible YM Futures Resistance Update 1

At 11:45am ET the YM Mar futures chart is at 25,362. So we've entered the expected range I gave in the previous post of 25,350-25,450. After this 3rd upward leg of three on the daily chart, I'd anticipate either several days of sideways action or a quick rejection of this level within 1-3 days.

Of course anything can happen, and the chart looks very strong. But I'm being cautious here.

Possible YM Futures Resistance Next Week

Above is the YM March 2018 Dow Jones Industrial Index Futures chart.
White line segment A1 measures the up move from mid-Nov. A2 is a copy of A1 moved up to start at the new up leg after a small pull back. The thin white horizontal line crossing the middle of A2 marks the middle of A2. I have found the middle of a measured move is often an important level. I also pulled a Fibonacci range on A1. You can see the 161.8% Fib extension from this at the top of the chart.

White line segment B1 measures the up move from the bottom of A2. B2 is a copy of B1 translated up to begin at the start of the bottom of the next pull back. I pulled a Fib range on B1, and the 161.8% Fib extension from this coincides with the 161.8% extension from A1.

So, at the top of the chart you can see the top of the A2 and B2 measured moves, as well as the 161.8% Fibonacci extensions from the actual moves A1 and B1. These line up so nicely, I'm looking for possible resistance around 25,350-25,450 next week.

(I'm also secretly hoping a pull back at that level might be the top of this crazy Bull market, since I've been looking for the top for years. Don't tell anybody, its embarrassing.)