Sell Short E Trade Financial And Noble Energy

Photocredit: © 2019 Bloomberg Finance LP

© 2019 Bloomberg Finance LP

The S&P 500 has followed the monthly cycle down. Sentiment, however, turned from too bullish to overly bearish within a short time, leading to a recovery rally. The current price formation looks like a chair with three legs. One more leg down appears to be necessary to complete a three-wave move down. The technical trigger would be the breaking of the prior August 5th low. The equally-weighted S&P 500 has already done so, and the capitalization-weighted S&P 500 is likely to follow by the end of the month.

The weekly price cycle of E Trade Financial tops on Monday. Ten of the last eleven sell signals have been successful. By early September, this stock is likely to drop to the high $30 area.

Chart 1

The E Trade cycle tops now.

Cycles Research Investments LLC

Chart 2

Relative strength is already weak.

Cycles Research Investments LLC

The Noble Energy weekly price cycle tops this this week. Ten of the last eleven sell signals have been profitable in the last year. This stock is in the relatively weakest sector, energy. The share price is likely to drop closer to the $18-$19 area.

Chart 3

This down turning cycle has been profitable over the last year.

Cycles Research Investments LLC

Chart 4

Price momentum has been weakening since late June.

Cycles Research Investments LLC

 

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