Picking a Sector in a "Sloppy" Market (w/ Frank Cappelleri) | Trade Ideas

Описание: Frank Cappelleri, CMT, chief market technician at Instinet, joins Real Vision to continue his discussion on the 10 steps for trading a sloppy market. He deconstructs the charts, highlights the current patterns in the market, and notes one particular sector to trade, in this interview with Jake Merl. Filmed on April 16, 2019.

Watch more Real Vision™ videos: http://po.st/RealVisionVideos
Subscribe to Real Vision™ on YouTube: http://po.st/RealVisionSubscribe
Watch more by starting your 14-day free trial here: https://rvtv.io/2Xktb2J

About Trade Ideas:
Top traders unveil their specific plans for cashing in on the market's next move. In these short videos, our traders cut straight to the point and lay out their thoughts on the best risk-reward trades of the moment. Each episode concludes with a visual recap of trade details including profit-loss potential and trade duration.

About Real Vision™:
Real Vision™ is the destination for the world’s most successful investors to share their thoughts about what’s happening in today's markets. Think: TED Talks for Finance. On Real Vision™ you get exclusive access to watch the most successful investors, hedge fund managers and traders who share their frank and in-depth investment insights with no agenda, hype or bias. Make smart investment decisions and grow your portfolio with original content brought to you by the biggest names in finance, who get to say what they really think on Real Vision™.

Connect with Real Vision™ Online:
Twitter: https://rvtv.io/2p5PrhJ
Instagram: https://rvtv.io/2J7Ddlw
Facebook: https://rvtv.io/2NNOlmu
Linkedin: https://rvtv.io/2xbskqx

Picking a Sector in a "Sloppy" Market (w/ Frank Cappelleri) | Trade Ideas
   / realvisiontelevision  

Transcript:
For the full transcript: https://rvtv.io/2Xktb2J
Welcome to Trade Ideas. I'm Jake Merl sitting down with Frank Cappelleri, chief market technician at Instinet. Frank, it's great to have you back on the show.
Thanks so much, Jake.
So you were last here talking about the 10 steps for a sloppy market. As you noted last time, the market was stuck on step 3. Can you please review what you actually mean by sloppy market? And then can you also give us an update? Are we still stuck on step 3?
Sure. Well, the whole point of the exercise was to show you can put a system in place to help remove motion from the environment. And I think that's especially interesting and helpful as we extend it higher. Now back then, we were only at 2,800 for the S&P 500. But we had reviewed that. We were stuck on step 3. And what those were was, again, step 1 was just to fail resistance, step 2 was to have a downside to follow through, and 3 was to have a bearish pattern form.
Now the most important thing we never got to was step number 4, have that bearish target hit. And so up to that time, the end of February, we had a handful of bearish formations come and go at that point. And getting back to 2,800 is round number significance. The S&P had fell there numerous times over the last year or so. And it seemed like a really interesting spot to maybe take some [INAUDIBLE] and lay out shorts. But we had to see a little bit more action on the downside for that to occur.
And so actually, the S&P had a little bit of trouble over the next few weeks, and on March 22, fell about 1.9%. It looked like we're going to get that downside target hit. Did not, of course. And we had a really substantial bear trap reversal. And from that point, there were then two other bearish patterns form and two other fail bearish patterns. So because of all of that, the uptrend remains intact.
And so the thing to remember about this is sometimes it's very difficult to see this in real time. Not everyone is looking at 15, 30, 60 minute charts like I have the luxury of doing. So what I did was, toward the end of that last presentation, show this in oscillator form. So we take the 10 steps and actually make an oscillator from 0 to 10. And we can see that on the chart that it's remained between 0 and 3, and we like to call that the "tame zone." It's just a fun way of saying that bearish patterns have not been successful.
And as long as that occurs, we have to remain on the right side of the trend. And so we have that dotted line there to show where it actually could occur. And if you go back to September and October of last year, that's exactly what happened, where we tried to remain on the side of the trend until it ended. And of course, it had improved violently at that point, but we never got back below 3. And so it was able just to stay then on the bearish side. And that's where we're at right now, still stuck on 3. And as long as we're there, we're remaining on the side of the current prevailing trend, which is currently up.