This is a custom index using Toyota+Honda+Ford's long term charts plotted against the S&P 500 (both using moving averages to smooth data).
It's pretty simple, when the auto sector is diverging from major equity indexes in a negative fashion, that = bad stuff ahead. The auto sector has shown that it peaks before the s&p 500 does, which makes sense due to fundamental factors. Auto's require lots of capital to build, and a lot of raw materials that are subject to inflation. This means late-cycle inflation often hurts the auto sector before it starts to trickle down elsewhere. Additionally, autos are also subject to credit markets, where higher rates = more difficulty financing cars. This causes purchases to drop due to people having less money to throw around and credit being more expensive.
"I Love This Chart Post" -- "Thank You"
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"Ford Motor Company Trading Strategy Update" --- 10-10-2018
Trade #1 = $9.82 --- 100 shares --- Filled 8-10-2018
Trade #2 = $9.34 --- 100 shares --- Filled 9-5-2018
Trade #2 = "Sold" -- 100 shares at $9.7258 --- Filled 9-19-2018
Trade #2 = "Buy" --- 100 shares at $9.22 ------ Filled 9-27-2018
Trade #3 = $8.82 --- 150 shares --- Filled 10-10-2018
Targets listed below "May" or "May Not" get Filled. -- Open orders to buy listed below.
Trade #4 = $8.67
Trade #5 = $8.21
Trade #6 = $8.00
Trade #7 = $7.89
Trade #8 = $7.56
Trade #9 = $7.24
Trade #10 = $7.00
Trade #11 = $6.61
"Lets See What Happens"
"One Eye Jim"
TinVo
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Great Analysis & justified reasons! Kudos!
jeffreyjim
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Ford Trading Strategy Update --- 9-6-2018
Trade #1 = $9.82 -- 100 shares -- Filled 8-10-2018
Trade #2 = $9.34 -- 100 shares -- Filled 9-5-2018
Revised trade #2 to $9.34 -- "Closed Gap Monthly Chart"
Trade #3 = $8.82 -- 150 shares -- Open order to buy -- (added more shares to trade #3)
"Good Luck" -- Trade at your own risk
"One Eye Jim"
jeffreyjim
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Sharing "My" -- Ford Trading Strategy -- 8-13-2018
Trade #1 = $9.82 -- 100 shares -- Filled 8-10-2018
Trade #2 = $9.32 -- 100 shares -- Open order to buy
Trade #3 = $8.82 -- 122 shares -- Open order to buy
Trade #4 = $8.41 -- 122 shares -- Open order to buy
"Major Buy" below $8.00 -- This is My" opinion only
Trade #5 = $8.00 -- 129 shares -- Open order to buy
Trade #6 = $7.88 -- 177 shares -- Open order to buy
Trade # 7 = $7.56 -- 185 shares -- Open order to buy
Trade #8 = $7.24 -- 194 shares -- Open order to buy
Trade #9 = $7.00 -- 201 shares -- Open order to buy
Trade #10 = $6.61 -- 230 shares -- Open order to buy
This is for information only. -- Trade at your own risk.
"One Eye Jim"
jeffreyjim
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"Excellent Post" --- "Thanks"
I love "Ford Stock" -- Just not at this price zone.
I think Ford will trade at or below $8.82 -- Major buy zone at or below $8.82.
Buy zone between $8.82 and $6.61 or a little lower. (not much lower)
$8.00 and lower "Major Buy Zone" this is not a joke.
Just remember these price levels "May or May Not" happen.
This is for information only. This is not a buy or sell recommendation.
Just sharing some thoughts.
"Good Luck"
"One Eye Jim"
ARCHIDUKE
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valid points.
THX1894
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Ok, your analysis is quite reasonable, but what you say is that in this case the divergence will increase even more? Shouldn't the motor companies go up at least a little bit in line with the market?
GTStockmaster
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@THX1894, What would cause this? I mean, obviously a bounce could happen. This happened in 2007 at the market top back then, but the point is that the bounce was a lower high while the broader market was making higher highs.
This is more intended to be used as a macro-indicator that there are more problems than people are aware of in the broad stock market.
THX1894
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@GregStockmaster, Ok, thought you were just talking about the auto industry. Well as I said earlier these are well reasoned points.
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"Ford Motor Company Trading Strategy Update" --- 10-10-2018
Trade #1 = $9.82 --- 100 shares --- Filled 8-10-2018
Trade #2 = $9.34 --- 100 shares --- Filled 9-5-2018
Trade #2 = "Sold" -- 100 shares at $9.7258 --- Filled 9-19-2018
Trade #2 = "Buy" --- 100 shares at $9.22 ------ Filled 9-27-2018
Trade #3 = $8.82 --- 150 shares --- Filled 10-10-2018
Targets listed below "May" or "May Not" get Filled. -- Open orders to buy listed below.
Trade #4 = $8.67
Trade #5 = $8.21
Trade #6 = $8.00
Trade #7 = $7.89
Trade #8 = $7.56
Trade #9 = $7.24
Trade #10 = $7.00
Trade #11 = $6.61
"Lets See What Happens"
"One Eye Jim"