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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  …

Market in Consolidation September 30, 2017

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Sept. 29, 2017 – Uber busy (again), so I’ll get to the point(s).  This market sure appears to be in a consolidation / re-accumulation phase.  Yes, I know I labeled the chart as Distribution, but I tend to always be on the lookout for a worse case scenario.  The BC (buying climax) was weak and the UTAD (up thrust after distribution) has yet to even form.  But . .  . went I see market trends begin to soften, I get extra cautious.

The chart above does show strength, or at least a continuation of the last up trend.   We may be beginning a break out to the horizontal channel that started in mid-July, but that’s just a “maybe” for now.  Money Flow, Volume Flow and Sentiment are good, so let’s be patient here.

The pie chart above shows the % of stocks that are considered “Strong” or “Weak” based on their 20 day moving average.  There’s a lot of green up there, which means that most stocks are at least participating in the current up trend, even though it may be a mild trend.

The table above shows us where the current short term strength is.  Ideally, this is where we should be holding our “long” positions.  I hope this quick analysis helps.  Hopefully I’ll have more time later, though that might be a few weeks from now.

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

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

Market at Top of Trading Range – Struggling September 23, 2017

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Sept. 22, 2017 –  Really not much is happening in the world markets.  The NASDAQ Composite Index (below) shows us that we remain in broad trading trade that started in mid-July.  Those blue channel lines are nearly horizontal.

I note that conditions are generally positive, so I remain invested, but I also see that Volume Flow and the volume bars at the lower part of the chart are dropping.  There just doesn’t seem to be as much interest in adding to positions right now.  Technology has slowed, Developing Markets (Latin America & China) have also slowed their advances.  I’m still on the watch for an Up Thrust higher on weak volume to flush out the last of the buyers, but this is more likely a Consolidation pattern.

Some of the previously weak sectors like Energy and Healthcare have shown some rotation back into them.  The question is whether this is a market sector rotation (coming out of one sector and going into another) or just a general slowing down of activity / consolidation.  If this low volume continues without Index prices dropping it would indicate Consolidation.  And the market waits.

Not much exciting to review.  Have a good week.     ………  Tom  ………

Rolling Higher but at Resistance September 16, 2017

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Sept. 15, 2107 – Once again, I’ll going to keep this brief due to being very busy after the hurricane Irma with clean up; part of the “deal” with living close to the coast.  (Don’t worry, not major damage, just cleaning sand and water off of a “floodable” area . . . but it’s still work.)

Looking at the chart above we see that the market has returned to previous highs and the “long term” trend channel remains up.  All of the indicators shown are positive but one must also note that we’re at (classical) “resistance” in the price structure.  The volume on Friday does not give us much of a clue due to it being options expiration (the 3rd Friday of every month).  In the grand scheme, we should be invested . . . but let’s also be watchful as well since we’re “at the top”.

We see the previous leaders in Biotech and Technology coming back into their roles, but it appears that the overall leadership is narrowing.  Looking at the stocks in the very broad S&P 1500 index we see a fairly positive outlook.

S&P 1500, % of stocks in Accumulation / Distribution:

S&P 1500, % of stocks in a strong / weak structure:

So these charts sure look positive, thus we should be invested.  Where?  I like Biotech, Latin America, China, Healthcare, some select Oil Service companies as well as select Basic Material stocks.  Pharmaceuticals and Semiconductors are coming on strong as well.

That’s it for this week.  have a good week !   ……. Tom  ……

P.S.  If there is an area that you’d like me to cover, drop me a comment in the area at the top of this post.

chart by MetaStock; pie charts by http://www.HighGrowthStock.com; used with permission.

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