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Continuation Upward July 15, 2018

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July 13, 2108 – Last week it appeared that the NASDAQ Index might just but on the brink of tripping down.  This week that did not materialize and the (US) Indexes resumed the trend higher.  Interesting how this market shrugs off bad news.  One interesting point is that while Sentiment and Volume Flow have resumed positive, the Money Flow still is lagging.  Not a big deal, but it sure would be more comforting if all of these indicators were in sync.

Biotech, Healthcare and Technology stock seem to be leading the market upward.   International, especially Emerging Market indexes continue to be weak.  Support levels for the NASDAQ Composite Index are at 7616 (near) and 7443 (major); these are my “lines in the sand” that would trigger concern if the index closes below them.

The broad S&P 1500 stocks are doing well as show below (more green than red):

% of Stocks Price Strength –

% of Stocks in Accumulation or Distribution –

So I’ve backed off my light hedge and back to following this market.  The current direction appears to be up, and so I follow.  Have a good week.      ……..  Tom  …….

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

“On The Cusp” July 7, 2018

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July 5, 2018 – This was a shortened holiday trading week not to mention a prime vacation period in the US.  Thus market activity / volumes are down.  Low volume markets tend to amplify moves; think of it was “a little goes a long way” in moving prices.  Both the Volume and Money Flow indicators below were slow to move even though price action appeared to be fairly good, especially on Friday.  Main Support level moved up to7421 on the NASDAQ Composite Index.

My sensitive market indicators show that we’re “on the cusp” of changing from short term mildly bearish to mildly bullish.  Technically we’re still in the bearish range though a nice move upward on Monday will change that.  There’s so much in the news that just about anything can pull this market in either direction.  Trade Wars, Atlantic Alliances, North Korea etc. will be the topics next week; there are a bunch.

That said, I find it interesting looking at short term sector strength (table below) that most of the top sector are considered to be defensive in nature.  Telcom, Utilities, Staples, Real Estate, etc. are near the top of the list.

Biotech had a good day on Friday with the announcement by BioGen of a promising drug that slows Alzheimer’s.  That sector was off to the races.  Tech is showing some life, but it is still too early to be sure that it’s a real move.

That’s about it for this short holiday week.  Let’s observe the markets this week on price action and see if volume picks up steadily (spikes concern me; shows that sellers are there too).          ……………  Tom  ……………

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

Shifted into Neutral June 30, 2018

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June 29, 2018 – As talked about last week, if the market showed significant weakness on Monday (or a few days later) I’d begin to hedge my positions.  And on Monday the markets gapped down fairly hard; note circled area below on the price chart.

Since then, market participants have been trying to figure out IF this is “the correction” for the summer or just a minor blip driven by trade wars fears.  I find it interesting that the low last week stopped just 2 points from the Wyckoff resistance line (green line) which is at 7421.  “Resistance is now support” as many technicians say.  However the big level is the Wyckoff support level (red line) at 7354.

I think that folks are still trying to determine just how serious this down move is.  Case in point is the Price Strength of all stocks in the S&P 1500 Index.  The pie chart below shows over half of them in a weakened state, then roughly a third Neutral, the remaining Strong.

But . . . . Distribution of shares (Selling) has not picked up.  The pie chart below shows nearly an even balance between Accumulation (buying), Distribution (selling) and Neutral status.  So Far, we’re seeing a lack of buyers instead of significant selling.  But, that could and will change if this market goes much lower.  In that case I’ll increase my hedging to “full” by using a bear fund to offset portfolio losses; i.e. synthetic Cash neutral.  Stock will be sold as stops are hit or if they are weaker than the market (indexes); just like normal.

Last point is to look at sector strength.  I’m generally seeing more defensive sectors moving toward the top of the list in this short term evaluation of strength.

The bottom line is to protect your profits & honor stops as they are hit.  Watch key support levels and be especially careful if volume picks up on down bars.  So far, so “OK” (not “good, just “OK”), but this market is not in the mood for surprises or bad news.  With all of the computer driven algo programs running, there could be a rush for the exits.

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

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

Wait For It ! June 23, 2018

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June 22, 2018 – A quick look at the chart below implies the early stages of weakness.  The circled indicator on Fridays Close are all headed in the same direction.  My master hedge indicator also shows a trend toward heading to Cash IF the markets don’t rally on Monday.  Also I note the big jump in volume with a narrow range down bar; selling into strength perhaps.  The bottom line is that risk has increased and this is no time to be “hanging out to dry”.

IF this market does correct, how much and for how long?  I have no idea, but likely this would not be a major move; just one for the “hot hands” to dump and reload for the next move up.  Hey . .  it’s Summer and time for some selling into the Fall (possibly).

OK, here’s a list of sectors by strength.  Of note we see Technology, Industrials and Finance toward the bottom . . . not showing leadership.  Just a thought.

Since readership is down, I’m going to make things “short and sweet” . . . . perhaps many are on vacation.  🙂  Cheers and have a good week.   ………….  Tom  ………….

Ditto . . . Not Much Change June 18, 2018

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June 15, 2018 – I’m on the road so this will be brief; but then again, not much has changed.  The market continues to shrug off trade tariff and political issues, so the status quo remains in effect.  The steady rise continues (note chart below), and thus we must follow until weakness appears.

The very near term warning level would be around 7669 (a 3 bar low), with the major concern coming in at the 7354 level.  But so far, we see none of that weakness, however a pause would be totally appropriate in here.  I remain looking for opportunities in Consumer Services & Goods as well as Internet and Healthcare.  I’m “short” Latin America.

More details next week, but really not much has changed.  Continue to “ride the wave”.  Have a good week.  …  Tom  …

Market Backs Off at Previous High June 10, 2018

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June 8, 2018 – Not much progress this past week.  The market appears to be pausing at the previous swing high of 7610 that happened on March 12 (dashed blue line below).  That’s not a surprise with all of the potential international news happening after Friday’s close; the G-7 meeting and North Korea next week.  No need to put “new money” into this market just yet.

But the market remains strong and positive.  Sentiment, Money & Volume Flows are all good.  We remain in the upward price channel and the support price line (red) is now at 7354; that’s where “problems” will most likely come to bear.  So, until something out of the blue happens, we monitor which sectors are strongest in this market.  The table below indicates where the strength lies in the short term. (color coded by percentile; green is strongest, etc.)

That’s about it for now.  I’m nearly fully invested but watching (always) for weakness; not much there now.  Have a good week.  ……….  Tom  ………..

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

Market Lift Off June 3, 2018

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June 1, 2018 – OK, we had a break out higher this week.  The 7421 level (resistance) was broken and we also have a new support level at 7354.  “Support” is the low where the “last buying” came into the market (a.k.a. a Wyckoff “Significant Bar”).  IF, the 7354 level gets broken (on a close) it would likely signal a change in character for this market; especially if were to come on higher than normal volume.  But, for the time being Market Sentiment is bullish as are the Money and Volume Flow indicators.

For the time being, we’ve got to continue being invested.  That doesn’t mean we can’t rotate toward stronger stocks in stronger sector though.  What I do find unusual is that small cap and NASDAQ stocks are generally doing better than the large cap stocks (i.e. S&P 500 & Dow Industrials).  The tax changes and regulation changes are now been factored into price.  What is next to drive prices higher?  It got to be corporate profits and positive geo-political news.  Europe (Italy and German banks) are having a tough time and that has spilled over to Latin America.  Something to monitor.  The North Korean, China trade and European tariff issues remain as well.

Looking at the stocks in the broad S&P 1500 index (below) we generally see a fair amount of green and a minimal amount of red.  These longer term indicators are pointing in a positive direction.

S&P 1500 Stocks Price Strength –

S&P 1500 Stocks in Accumulation / Distribution –That’s it for this week.  Take Care.    ………..  Tom  ……….

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

Sluggish Market May 26, 2018

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May 25, 2018 – Not much movement in market in general this week.  The S&P 500 index was up a modest 0.31%.  Most of the market movement was in mid and small cap stocks (i.e. non-S&P 500).  Note the broad NASDAQ Composite Index remained bogged down near the 7421 level.  We’ve talked about the significance of that level last week as being the last point were “buying came into the market”.  What is needed to move higher is more buying, but it looks like investors are taking a ‘wait and see’ approach.

Geo-political issues continue to cause caution.  Q: Why invest new money when things are bouncing around so much?  Good point.  Oil got hit hard late last week with comments coming out of Saudi Aribia.  Note how far Oil fell in the table below (red circle); was in the top 5 last week.  That may be a short term reaction, but we’ll have to wait and see next week.  Indicators remain bullish / positive, but it sure would be nice to see a decisive break above 7421 (blue line on the chart).  Not much else to say right now so I’ll close with a look at sector strength in the US stock market.

Take Care & have a good week.       ………  Tom  ……..

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

Market Meets Resistance May 19, 2018

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May 18, 2018 – The market (as measured by the broad NASDAQ Composite Index) met resistance near the 7421 level (blue line).  All week long it hovered around that level and just couldn’t break through it decisively. Remember that this level is determined as a (Wyckoff) “Significant Bar” on a weekly scale; that’s the weekly high where selling last appeared.  Since the market “balked” the last time it was there it is significant to note and monitor.

This is not a bad omen, it just means that in an average market one would expect the price action to slow before breaking one way or the other.  The short term indicators remain positive from Market Sentiment to the Money & Volume Flows.  In order for the market to move higher we’d like to see a Sign of Strength (SOS) which would be a daily bar with a wide range, closing near the top on increasing volume.  That would indicate buyers stepping in.  Attention is given to the fact that as we approach summer it is a typical slow / weak season.  I don’t subscribe to the phrase “Sell in May and Go Away”, but summer is usually slow.  We could just bounce around in this range for a few months; that would not be surprising.

Looking at the market health from a different perspective, we note the number (i.e. percent of) stocks in the S&P 1500 Index that have strong price action and those in an Accumulation, Distribution or just Neutral phase.

Price Strength –In Accumulation / Distribution –Sectors that are doing well include Energy (Oil & Services), US Small Cap Index, China, Internet and Basic Materials.  Latin America is one of the weakest areas,  That’s about it for now.  Have a good week.          …………  Tom  ……….

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

Breakout Up, but One More Hurtle May 13, 2018

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May 11, 2018 – A quick look at the chart below confirms an upward breakout.  Sentiment, Money Flow, Volume Flow and Price Strength are all positive.  But more important are the closes above previous Support levels.  But . . one more hoop to jump through is the 7405 level, just above Fridays bar (light green line).

The 7405 level was the last level were Buying Stopped on a weekly basis.  That level was generated back in late March.  With that small caveat I’m “comfortably long”; that’s “invested but not aggressively so”.  The thing I’m looking for is where the market leadership is located.  During the post election run upwards Technology, Semiconductors and Consumer Goods were the darlings.  Tech and Oil have returned to leadership but I sense some hesitation.  Banks, Financials and Small Cap stocks in general are showing signs of strength and that would help maintain confidence in any continued upward movement.

Earnings have been good, but with the massive corporate tax cut they should be.  For now the market is looking way past this reporting period.  A run in Basic Materials would signal a longer term bullish look for the world economies.  For now here’s how sectors are looking in the short term:

Looking for leaders in the “green sectors” at the moment.  Also of note is the recent strength in China stocks.  Have a good week.  ….  Tom  ….

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

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