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A Cautious Bounce December 8, 2017

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Dec. 12, 2017 – This week we saw the market revert back to the lower short term price channel (purple line) but remain well within the long term channel (dashed gray line).  OK, a bit of a pull back, and that’s to be expected after a very steady run higher.  But I do note a drop off in Money Flow and Volume Flow indicators.

Two possibilities: 1) volume dropping due to a lack of buyers, and also sellers, or 2) lack of demand to buy.  We’ll have to wait until next week to see if prices recover and exactly what volume does.  I’ve VERY cautiously labeled the peak as a Buying Climax and the swing lower an Automatic Reaction.  Are they really?  We’ll have to wait a few days to see IF there is the follow through necessary to confirm a Distribution price structure.  My feeling is likely not a significant top in the market just yet, but I’m always looking for a trend change.

The 6668 price level (blue line) would also help confirm any weakness, so I’ll watch that as well.  Until then, I remain invested and monitoring sector rotation.  Right now Financials, Telecom, Industrials, Banks and Consumer Goods & Services are strong.  Sure, some of this is seasonal, but “money goes where it’s treated best.”  Real Estate, Gold and Semiconductors are now some of the weakest sectors.  (That happened quickly!)

So the market is strong right now and the pie charts show the percent of stocks in the broad S&P 1500 Index confirm that.

Price Strength:

Accumulation (buying) / Distribution (selling):That’s about it for now.  Time to watch the reaction / bounce strength and be just a shade on the cautious side.  Have a good week.    ….. Tom ….

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

Maintaining the Up Channel December 3, 2017

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Dec. 1, 2017 – The (US) markets continued to stay in the “Short Term Channel” (purple lines) which is pointed up.  On Friday prices briefly touched to bottom channel line on the Flynn guilty news, but responded to the tax bill passage news.  

The year end period is typically bullish, but we do see signs that negative news will trigger selling.  Now that the tax cuts are passed and the “big rollers” can look forward to lower taxes next year, it will be interesting to see the reaction in January, 2018.  For now I’m watching the 6668 level on the NASDAQ Composite Index as a first line of price support (blue line).

Not much to say except it looks like money is flowing out of Tech (especially Semiconductors) and into Banks and Finance.  Emerging Markets are erratic and Europe “ho-hum”.  My sector strength table is below (short term strength).

That’s about it.  Have a good week.        …………  Tom  …………

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

“Same Old” Up Trend November 26, 2017

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11-24-17 – Really . . . not much new here, just the “same old up trend”.  I’ve added the ‘short term” trend channel to the chart below (blue lines). We quick note that the price action is above the long tern channel (purple dashed) and at the top of the short term channel.  Money & Volume Flow indicators are bullish and strong.

Volume dropped off during the past holiday week (in the US) so we’ll wait to see what next week brings as far as activity.  I’m still looking for an Up Thrust in price on low volume, but so far not seeing it.  Prices are extended to the up side and nearly everyone is bullish waiting for the famous “Santa Clause Rally” into year end.

The table below shows where the short term strength is right now.

There’s not much choice except to remain invested for now, but extended prices always concern me . . . .  that’s where the risk is.

Have a good week.          ………..  Tom  ………..

Chart by MetaStock; table by http://www.HighGrowthInvestor.com.  Used with permission.

Market Chugs Upward on Lower Volume November 18, 2017

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11-17, 2017 – After a major move to a new house and the major unpacking that goes along with it, I’m slowly approaching “normal”.  I wanted to talk about market “breath” (a.k.a. the number of stocks actually participating in a trend), but that will have to wait.  In any case, the market just keeps going higher.  One thing I do note is that the volume of stocks going up vs. those going down has slacked off.  That indicates a pause more than likely.  Also to note is that we’re heading into the holiday season where volume in general typically falls off.  No alarms, but something to watch.

I’ve moved the support levels up this week (based on the low of a strong weekly bar).  The logic is that a strong weekly “up bar” low price is where the buying started and hence a “commitment to buying” / Accumulation, thus strength & support.  On the NASDAQ Composite Index the first level is now 6668, then 6518.  If these levels get broken on a close, I get very concerned.  Last point; Friday was options expiration and that brought low volume (a little unusual).

Let’s look at the stocks in the broad S&P 1500 Index as a clue to overall market health.

% of Stocks Showing Strength:

% of Stocks in Accumulation or Distribution:

Nothing to get concerned about right now as there isn’t an over bearing amount in one category or another.  Though I should note that these are “slow” indicators and thus are more useful for significant moves and not minor corrections.

I am seeing some weakness in previous market sector leaders such as Semiconductors & Technology and some strength in more defensive sectors as Real Estate and Utilities.  Nothing major as it could be more of a pause, but since I am in these areas I’m paying close attention to them.

That’s it for now, have a good week.   ……..  Tom  ……….

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

 

Continuation Up November 12, 2017

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Nov. 10, 2017 – A busy weekend and weekend for me so I’ll get right to it.  Yes, the trend higher continues.  A quick look at the chart below shows Market Sentiment neutral and the remaining indicators Bullish.  Prices remain at the top of the price channel . . rather “nose bleed” levels, with support at the 6517 level on the NASDAQ Composite Index.

Tax “reform” may be driving this market higher and that may or may not come to pass without “issues”.  Semiconductors, Technology, Japan are leading sectors.  I note that Real Estate and Utilities (defensive plays) have quietly moved up in strength.  The breath of this market does seem to be narrowing with less and less number of stocks driving higher.  That is something to watch as overall volume is dropping.

For now, we can’t “fight the tape”; higher is higher.  Have a good week.           ………….  Tom  ………..

Trend Up Continues November 5, 2017

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Nov. 3, 2017 – The trend higher continues, though looking at the “Money Flow” indicator (top pane), the flow of capital into this market is slowing.  The big leaders are technology, with semiconductors in the fore front of the pack.

The support level for the NASDAQ Composite Index is 6517, the last swing low point.  Whether the idea of a big tax cut for corporations is driving this market or not is somewhat moot.  It just continues to go higher.  I remain concerned about prices hugging the upper trend channel line (blue dashed lines), but we “can’t fight the tape” right now.

Looking at the stocks in the broad S&P 1500 Index below we see a fairly balanced situation for the market as a whole.

Price Strength –

Stocks in Accumulation or Distribution –

Sectors I like are: Japan, Semiconductors, Technology, (short) Latin America, Banks, Basic Materials.

That’s it for this week.  Watch the news carefully in case the Trump Tax plan falls apart; that could be a game changer.   ……..  Tom  ….

The Up Trend Continues October 29, 2017

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Oct. 27, 2017 – This market continues to surprise just about everyone.  Friday’s spirt higher was on the back of great earnings reports by nearly every major tech company.  And so it goes.

But I do note that Sentiment is “Neutral” and Money Flow is slowly weakening.  The real question (remains) just how broad price advances will be; that is, are only a small number of stocks pushing the indexes higher, or is everyone contributing?

I’ve moved up critical suppose price levels for the NASDAQ Composite Index on the chart.  These are important weekly price levels, so breaking them will indicate problems in the market.

The table below shows where this strength is coming from:

Busy weekend, so have to go.  I’m invested and pleased with the results, but cautious about how euphoric investors have become.  A little disappointment may have a big effect on this market.  Since prices are at the top of the trend channel I become more cautious.

Have a good week.            ……………….  Tom  ………………

Up Trend Continues October 21, 2017

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Oct. 20, 2017 – The chart below clearly shows tht this up trend is intact.  Sentiment, Money Flow and Volume Flow remain bullish.  Prices remain in this upward trend channel, though at the top of that channel.  Risk for a correction down to  at least the lower trend channel is high and logical.  This market is optimistic and over bought.

But, it can still go higher.  I always have to remind folks that correction begin at “all time highs”, not at “all time lows”.  I think it’s wise to be “cautious” at the same time as being fully invested.  It just makes good sense.  Here’s a few sectors that I like and are showing strength in this environment:

That’s it for now. With modest volume and prices at the top, folks are buying, but not “hand over fist”.  Optimistic, yes . . . . but let’s not be blind to what potential is out there.  Have a good week.     …….  Tom  ……..

Slow Progress October 14, 2017

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Oct. 13, 2017 – Another busy week, but not much (new) is happening.  The markets are progressing higher though at a slower rate.  That “breather” may be good; it gives it a chance to catch up.

We note the similar situation to the past few weeks. Moving higher toward the top of the trend channel.  This market is “fully valued” if not “over valued”, but up is up.  I note the continued decrease in volume.  I remain on the look out for an Up Thrust in price on low volume.  So far, no thrust higher (wide range bar) with a low close.

Semiconductors, Japan, Basic Materials and Internet stocks are on my radar right now.  (I also note that Emerging Markets are reviving; something to watchout for.)  That’s ’bout it for now.  Have a good week.        ……….  Tom  ………..

(chart by MetaStock; used with permission)

The Climb Higher Continues October 8, 2017

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Oct. 6, 2017 – The markets continue their climb higher, but note that prices are approaching that top trend channel line.  That’s the area where we’ve encountered corrections back toward the lower trend line.  One item that may confirm this slowing is the drop off in volume (lower pane).

Money Flow, Volume Flow and Sentiment indicators (top panes) continue to be bullish. And so I remain invested, but watchful for signs of weakening.  I’ve shifted the “UTAD” label up and these higher prices on lower volume could confirm that Up Thrust.  Still a little early though.

The table below shows sector strength.

I like select stocks in Banking, Oil & Gas, Semiconductors, Industrials and Basic Materials.  That’s it for now.  Have a good week !  …  Tom  …

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