Check out the pin action in the financial exchange sector — $CME, $ICE and $NDAQ (September 20, 2017)
CME CE NDAQ CME CE NDAQ
The Fed is going to raise rates probably later this year; they didn’t do anything today. There is plenty of conjecture about what they are going to do. Probably what they say they are going to do, at least this time around, one more rate hike this year. And then they start reducing their balance sheet by not plowing money on bonds that mature back into the market. Is that going to impact the market? That depends on who you read. Some say it is going to be horrible, hide the women and children, and get ready for Armageddon. Others say it will be a big yawn. That is your update.
Now, let’s look at some stocks. I want to look at the financial exchange sector. There are three of them that we can look at. First the good; CME ( NASDAQ:CME ) has been a pretty good stock for me. Pretty steady performer. You can see how we got kind of a long base, a little bit of a cup and then another consolidation pattern. And then finally, a couple weeks ago, The stock started to breakout. It broke out here; I remember this very well because I was trying to figure out whether to buy more or what. It broke out here on good volume and the next day fell back down. Then the next day rallied back up. You could call this a bull sandwich. The then now we are moving higher.
We look at the weekly chart and you can see how long this is consolidated, for over a year. And then it has been in another consolidation for 9 months or more. Now it is just starting to move out from here. The bottom line is this: I don’t think it is too late for you to buy this stock. As far as for a trade, you are a little bit late. But it is still coming out of a squeeze. I had thought about buying more today but just decided not to, wait a bit, let the stuff that I have hopefully run higher. But if you want to buy a bunch, feel free, because then that will make me and other folks that are long a lot of money. This is definitely one I think you want to own.
Now, ICE ( NYSE:ICE ). Sideways consolidation. I guess you could start building a little position here, but I don’t see that there is much harm in waiting. And this is why: Because the high was right here at 67.50. So the stock is maybe a percent below where the high is. I would give up a percent in profit for the benefit of waiting to see WHETHER the stock actually does move to a new high. So you are actually just giving up about a percent by waiting to see what happens. If this does not rally, it doesn’t move higher, then maybe you wind up getting it at a little bit lower price. There is really no saying whether this stock will breakout or not. I just think it is problematic to just decide that it is going to because it might not. It is just not at a great position to buy right now, but it is one that over time I think is ready to move higher.
Then the Nasdaq ( NASDAQ:NDAQ ) is a similar kind of situation. If you look at the weekly chart you can see, sideways consolidation. Very long base here. Not at the best buy point, if it comes back even $1.00 or so, I think that is better. A breakout, let’s say 78.00, and again, we are looking at the same kind of thing. If the stock breaks out above 78.00 then that is a better entry. You are only giving up a point, a point and a half in order to wait and see whether it is actually going to break out. This is one sector, between CME ( NASDAQ:CME ), ICE ( NYSE:ICE ), and Nasdaq ( NASDAQ:NDAQ ), that I think definitely warrants some of your dough.
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