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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.

Unsteady Markets September 10, 2017

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Sept. 8, 2017 – Due to the hurricane, I’ve had to evacuate, so this will be short.

We’re still in an up trend, both short term and long term channels are either up or prices are above the upper line.  6480 remains resistance and 6216 is support..  What concerns me is the potential for a “double top” / Up Thrust in the price structure.  Money Flow is positive but lacks conviction.  So, I remain invested but still cautious about this extended market.

Here’s what sections are doing:

I prefer Developing Markets, Healthcare and select Technology sectors too.

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

Still In Up Trend, Tho Topping (?) September 3, 2017

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Sept. 1, 2017 – This is a “moving weekend” for me so the post will be short.

I’ve added a longer term trend line channel (purple); we remain in the channel having just “kissed” the lower level at 6216.  Volume Flow and Market Sentiment indicators have turned up and are bullish.  Now the NASDAQ Composite Index is approaching the previous high at 6460.  This level must now be considered a resistance point for any further movement higher.

I’ve relabeled the key Wyckoff points just as a precaution for a Distribution pattern.  This last push back to old price levels was on below average volume.  Caused by the holiday weekend & vacations or minimal buyers?  We won’t know until the coming week.  I note that September has been a traditionally weak month for the markets, but that’s all in the past.

I’ve added a few positions in Technology, BioTech & Metals and Mining sectors, and added back a small position in the NASDAQ 1000 Index.  If we penetrate resistance with average to above average volume I’ll add to these.   Here’s a quick look at Sector Strength:

Have a good week.   ………….  Tom  …………

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

 

Weak Market Looking for Direction(s) August 26, 2017

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Aug. 25, 2017 – I’m very busy over the next couple of weeks, so this will be short and to the point(s).  This market continues to show signs of weakness in the form of “lack of buyers”.  No major moves to the exits just yet, but any bad news will likely change that quickly.

Looking at the chart below, we see lower swing highs and lower swing lows; plus Money Flow and Volume Flow are headed down or are weak.  Market Sentiment remains Bearish.

Note in the lower pane that volume continues to be below average; just not much reason to buy in here.  Without buyers, the markets will go into consolidation, and IF there are sellers, it will go lower.  Basic “Supply & Demand” stuff.  I am watching the 6216 support level (in red), but have a feeling that we could easily slip towards the 6141 level easily.

Looking at the stocks in the broad S&P 1500 Index (below), we see that nearly half are stuck in the “Neutral” price strength area, with more in the “Weak” area than in the “Strong” area.

Make no mistake.  This market is weak and looking for direction . . . either up or down.  It is very susceptible to news, so we must be extra careful.  I have sold some weaker holdings and have add a small “hedge” (i.e. bear fund) to help control risk.  Hedges can be taken off quickly if needed and I just look at them as “insurance” against “bad stuff” happening.

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

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

At Pivot Low, Next Week Important August 19, 2017

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Aug. 18, 2017 – A quick look at the price chart below shows how the NASDAQ Composite Index closed on Friday, right near the previous swing low.  We have two lower swing highs and now two lower swing lows.

That 6216 close on Friday is just a little ominous in that IF we’re expecting a turn around, it should happen on Monday.  Otherwise the next target lower is the 6141 level.  That 6141 level is where buyers have previously come into the market (we’ve already ‘blown through” the 6303 support level).  I’ve spotted in a few important Wyckoff turning points; these would indicate further market weakness.

Also in the chart above: Sentiment is bearish, as is Money Flow and Volume Flow.  We’re entering into a period of the year where the stock market is typically weak; late August through early October.  I’m not a big fan of seasonality, preferring to observe and follow the trends as they develop.

Selling also dominates the S&P 1500 index stocks.  The pie chart below shows the number (i.e. %) of them in Distribution (red / selling) and Accumulation (green / buying).  There is far more red than green right now.

A look at the sector strength table below shows a move toward more “defensive” stock sectors.  The previous market leaders of the Technology sectors have moved down in the table.  In the short term, this is a time for either hedging (via “bear funds”) or staying close to an exit plan if necessary.

I’m seeing more strength in Emerging Market countries for the time being, as well as Utilities, Telecom and other defensive sectors.  I’d wait until Monday afternoon (after the weekend investors place their sell orders) before I’d jump to any conclusions, but it sure looks like a market that’s headed lower.  At least another 3 to 5 % next week.

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

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

Expected Decline; Time to Be Careful August 11, 2017

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Aug. 11, 2017 – OK, we’ve had a quick drop but only a minor one so far.  Our first support level of 6303 on the NASDAQ Composite Index was broken on the close on Thursday.  That gets our attention.  But . . . notice how “average” the volume was (lower pane) and then on Friday (8-11-17) volume dropped off even more.  Obviously we’re not seeing panic selling or a mad rush to the doors.  And this was on a Friday (before a weekend); traders were rather comfortable holding on to stocks over the weekend.

Where we’ll get much more concerned is if prices breaking the 641 level on a close and / or volume picking up on a wide spread down bar.  Then it’s time to hedge or sell.  For now I’ve just lightened up a little on holdings, paying more attention to weaker things that I hold.  Not surprising that Market Sentiment (top pane) and Volume Flow are negative.  Money Flow has turned down but remains above zero.  This confirms a lack of buyers, but not significant selling for the time being.

The number of stocks making up the S&P 1500 Index that are in Accumulation and Distribution (below) shows a fairly even split.  Again, not large amounts of selling at this time.

The Price Strength (below) shows a different picture, but confirms the idea that the weakness is caused by the lack of buyers.  If there are more sellers than buyers, prices will drop.  The amount of Red that we see far exceeds the green.  Prices are generally weak.

Looking at sector strength we see more defensive stock sectors moving to the top of the list, while previous leaders (technology based) have moved lower.  Since the general feeling is that stocks are over priced based on good earnings, but not great, this is likely a typical pause for re-accumulation of shares at a lower price.

Let’s hope that the conflict with North Korea is only an excuse to have a minor correction.  Speaking of sector strength, it appears that International stocks are fairing a little better right now.  I have cut back on % amounts to hold, but China, Latin America and Emerging Markets in general are looking to hold up rather well after making significant gains recently.

That’s all for now.  Watch that 6141 level and signs of volume increasing on any down days.  Otherwise, we’ll be patient and wait for a better time to redeploy our Cash.  Have a good week.     ……….  Tom  ……….

Chart by MetaStock; pie charts & table by http://www.HighGrowthStock.com; used with permission.

Market Holding, but Showing Signs August 5, 2017

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Aug. 4, 2017 – A quick look at the chart below shows the NASDAQ Composite Index holding on to the first support level at 6303, but a close look “under the hood” shows a market that is slowing down, if not weakening.  What would concern me more would be a close below the next level at 6141.

Note how Sentiment (top) has turned neutral and both Money Flow & Volume Flow are fairly lethargic.  I my opinion this is likely just a pause, but if either Trump or the North Koreans do something “dumb” it could turn out to be a significant correction quickly.  The momentum has definitely slowed significantly.  The word now is to honor your stops if whatever your holding shows excessive weakness.

One other item that may be of concern is the number of more defensive sectors that are showing leadership in this market.  You can see this in the table below, as the past “darlings” (technology, semiconductors, biotech) are not near the top of this list.  That could be an indication that money is flowing to more conservative sectors to ride out a brewing storm.  Let’s keep an eye on this for a few more days before we jump to any conclusions though.

That’s it for this mid-summer market.  Let me know via a post to this blog if there is anything you’d like to see me cover of review (except specific stocks).  Thanks and have a good week.     ………….  Tom  ……………

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

Fall Back to Previous High July 29, 2017

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July 28, 2017 – About noon on Thursday a couple of stock analysts decided to downgrade a few tech stocks; and that was it.  Caution set in with a broad market dip, then the computers stepped in to sell, followed by “resting” (in the market)  stops being hit.  Friday was a tight range day holding on to price levels.  I found it interesting that the Index stopped falling right near the previous high (red circle), adding to the adage “what is resistance once broken, becomes support”.

And so it goes.  If this market is to remain strong, this current price level is a logical place to stop and hold.  The next level down is 6164, but that would certainly be considered much more serious, and we could see some serious selling hit the markets.

For the time being I’m patiently holding my longs in growth stocks but watching for signs of continued weakness; we’re overdue for a +10% correction IMHO.  In the mean time I note that the other indicators above remain positive so this appears to be a shallow correction . . . more like a blip.

Where I am seeing strength is in China, Emerging Markets, Latin America, Internet & Biotech sectors.  Telecom and Technology are not far behind.

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

Chart by MetaStock, used with permission.

A Break Above July 21, 2017

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July 21, 2017 – Wednesday of this week the NASDAQ Composite Index broke above the previous high and continued on for the rest of the week.  The old favorites were back at it: Technology, Biotechnology, Semiconductors and even some Basic Materials.

One area that has been under the radar of some folks is the International markets.  Latin America, China and Emerging Markets have quietly moved higher as well as most developed markets.  On the chart above it’s easy to see the positive flow of Money (top pane) and Volume (second pane).  Market Sentiment also turned bullish this week.

The bottom line is we don’t have much “choice” but to continue to be  long / bullish in the market.  There are geopolitical risks out there but this market just does not seem to care.  The only “caution” is that average daily volume is moving lower.  The question is whether this is due to summer vacations or the lack of new buyers coming into this market.  The rather tight daily bars (range between the high & low price) is a little concerning as well.  That narrow range indicates that buyers and sellers are about equal.  That’s OK with low volumes, but let’s keep an eye open for the “smart money” trying to slowly leave this market and leave everyone else “holding the bag”.

Let me know (via the comment section) if there is any topic that you’d like me to cover.  Comments are always welcome.  Thanks.

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

Chart by MetaStock; used with permission.

Still Within (trading) Range; Sans Volume July 15, 2017

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July 14, 2017 – Listening to the financial media one would think that “Happy Days” are here again; and the markets have recovered from a small swoon.  But with all of the talk about “new highs” we should consider that we are really only returning to the top of a trading range.

We bounced off the 6097 support level and we’re now just about near the previous peak (dashed purple line).  One thing I note is the steady lowering of volume over the past week (lower arrow). Also “market Sentiment” is bouncing between neutral and Bearish.  OK, up is up and the previous leaders (tech, semiconductors, biotech, etc.)  are once again doing well.  Maybe the lack of volume / interest is due to the summer vacation schedule, but maybe it could be lack of commitment.  That lack of commitment could be forming an Up Thrust.  We’ll just have to wait and see next week.

For now I’ve removed my hedge (protection) but have not jumped back to a market “long” status.  The market is showing some positives as shown below; the % of stocks in the S&P 1500 Index that are being bought/sold, with price strength strong/weak.

S&P 1500 Accumulation & Distribution –

S&P 1500 Price Strength –

Overall these pie charts are showing a reasonable balance between the three status levels, and that’s usually a healthy sign.  Looking at a sector strength table below:

I also should mention that a few Emerging Market countries are doing well in the recovery.  Since we are in the middle of earnings reporting, the market could easily react to unexpected bad news about key industry companies as well as any geo-political news.  With Russia and Healthcare being major topics, that could be a factor.  I feel that in order to decisively break above the previous high, we’ll need to see volume (buying) increase too.  Without that I’m still cautious.

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

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

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