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But Wait . . There’s More ! (?) January 20, 2018

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Jan. 19, 2018 – To borrow a phrase from American TV commercials (“But Wait, There’s More!).  A classical “come on” to grab your attention and lead up to a “call to action” (i.e. buying).  This market shows no signs of letting up, but we should keep an eye open for sector rotation.  Even though the indexes keep moving higher; is every sector participating?  And, for good measure, are international stocks doing even better? Ahh Ha, good questions.

Sentiment, Money Flow and Volume Flow all bullish; check.  Prices above the trend channel and above key support levels; check.  And so the trend continues . . .until it stops.  And there in lies the key.

The US markets are giddy about lower taxes and the re-patriotization of offshore funds.  OK, that will last until earnings don’t also increase.  The rest of the world is also recovering from a general world wide recession.  And that recovery may, just may be more stable and less driven by news.  Cases in point are Latin American countries (Brazil & Mexico) and Emerging Market countries in general (notably China).  Japan & Korea doing all right as well.

In the US the oil trade may be slowing, so I’m careful there.  Industrial and Consumer Services stocks along with select Tech stocks are strong.  So, it makes sense (to me) to be diversified among the strongest world sectors and keep an eye open for how the (US) markets react to “bad news”.  Whether it be a government shut down or new special council actions.  This market wants to go higher, but it does not want to lose much money.  I’d call it “impatient”.   If things don’t go well (go up), there will come a time to sell.

I’m “long” but careful to see how this market reacts to news since the economics are a tail wind for the time being.  News is important right now.  Have a good week.  ….  Tom  ….

Price chart by MetaStock. Used with permission.

 

Roll’in . . Roll’in . . . Roll’in January 12, 2018

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Jan 12, 2018 – This market just keeps “Roll’in (Down The River”; pardon to CCR).  But, this too will end.  Why am I so dog gone concerned?  Here’s a chart of longest periods without at least a 5% correction.  We’re waaay up there as the third longest period.

OK, that doesn’t “prove” anything but it does show that this move, for this long, IS unusual.  And that is one of the big reasons why I keep a close eye for a possible correction.  Maybe not a bear market, but at least a meaningful correction.  With extra “income” coming to corporations in the form for lower taxes, this market is in love with stocks.  And that could continue for a while.

Is this market over bought and over optimistic?  The price chart below shows the number of stocks in the S&P 1500 index that have strong, neutral or weak near term price action.

What I think is more typical “healthy” is an even split between strong, neutral and weak.  That shows balance and not euphoria.  Waaay to much “green” up there for my liking of a stable market.  Next are the number of stocks in Accumulation (buying), Neutral and Distribution (selling).

The same thing goes here though not quite the unbalance as was in the price strength.  In short, the market is getting ahead of itself and pricing in all of that good news.  We’re in the earnings reporting season and all eyes (ears) will be on forward guidance.  Expectations and fear drive a market and right now they are excepting a lot of good news.

For now I have moved the initial support level up to 7111 on the NASDAQ Composite Index.  All primary indicators are positive / Bullish but the price is above the upper channel line; again, over bought.

This can go on for quite awhile, so I remain invested and in this market.  Strength is in the Oil and Emerging Market sectors, followed by Industrials and Basic Materials.  Take Care and have a good week.        …………….. Tom  …………..

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

New Year – New High January 7, 2018

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Jan. 5, 2018 –  Happy New to all.  Well we didn’t have to wait very long in the new year to see if tax selling at a lower rate would influence the market.  It didn’t.  The broad NASDAQ Composite Index (below) just kept on moving higher, and is now in a rather “over bought” condition (that being above the upper price channel).

I’ve raised the support levels to 6924 and 6668 based on the lows of significant weekly bars.  This is where buying come in and thus a violation of the lows of those strong bars could be a sign of a change of character.  So far the sellers are holding and everyone else is buying.  So be it.  The Money Flow indicator has kicked up after registering the low holiday volume and reverting toward a neutral (zero) reading.  Volume flow and Market Sentiment remain positive.

Not much more to say except the Up Thrust that I was concerned about does not appear to be forming; I’ll likely drop the tentative label next week.  This is looking more like continuation.  Other than that, here is a list of short term sector strength.

This is generally where I like to position my stock holding.  I remain fully invested for the time being.  Have a good week.   ……..  Tom  …….

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

No “Santa Clause Rally” December 30, 2017

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Dec. 29, 2017 – Well it’s been an interesting year.  Sure this market has been very “kind & understanding”, but what drives prices higher is earnings (or at least the hope for future earnings).  The U.S. tax plan has past and it remains to be seen exactly what companies will do with that extra money.  With unemployment in the U.S. are near all time lows, I doubt if much added hiring will occur.  The last time this type of tax abatement happened corporations bought back their own stock or issued special one time dividends.  Either of those should drive prices higher.  We’ll see.

In the mean time prices continue to remain within the upward sloping price channel.  But as I note in the headline, index prices have really not done much in December.  While Sentiment and Volume Flow remain Bullish, the Money Flow indicator has dropped to a negative reading.  Now volume is typically light during the holiday period, but this is something to be aware of.  Also, I show you the chart below (the last 6 days; 10 minute bars) of the significant selling that came in during the last 20 minutes of 2017 on Friday.

Look at that volume spike.  I’m considering this to be an Up Thrust in the immediate term.  We’ll see if that selling continues after Jan.1, 2018.  This market is due for a correction from an historical perspective.  In the mean time I’ll show the pie charts of the stocks in the S&P 1500 Index.

# of Stocks in Accumulation / Distribution –

# of Stocks with Strong / Weak Price Strength –

So far, a fairly even split in healthy to unhealthy stocks, and that supports a continuation of the current trend (higher).  But let’s watch to see if tax selling comes in during January.

Oil & Oil Equipment, Latin America, Precious Metals and Basic Material sectors are in the lead for short term performance  The entire Tech sector is struggling right now.

That’s it for this year.  I wish you & your family a very Happy & Prosperous New Year !   ………  Tom  ……..

Charts by MetaStock & Worden bros. / TC200, pie charts by http://www.HighGrowthStock.com. All used with permission.

Holiday Continuation – Ho Humm December 25, 2017

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Dec. 22, 2017 – Not much to say because most folks were not doing much in the markets; though I do note Asian market are getting stronger.  We remain in both the short term channel and longer term price channel, both of which are pointing up.  Not much to determine in the volume figures as they have steadily dropped off.  (Which explains the drop in “Money Flow” in this market.)

What will be of interest is IF we see selling AFTER the first of the year when tax rates in the US are lower for the high income folks.  No need to lock in profits now . . . save a few percent and wait a few days.  That level of activity will give us a feeling for the first half of next year I’m thinking.  Until then, the moving sectors are Oil & Oil Services, Telecom, Consumer Services, Banks and Consumer Goods.

Enjoy the holidays !      ………  Tom  ………..

A Taxing Situation December 16, 2017

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12-15-2017 –  No doubt about it . . . the stock market likes money and when they’re pretty sure that more is coming their way . . they get happy and drive prices higher.  Volume was dropping off (until Friday’s options expiration), so we’ll have to wait until next week to see the tax approval drama prove out and see if the market reacts with higher prices on higher volume.

I do want to see volume confirm price (ease of movement= price and effort = volume) in order not to get concerned about a possible Up Thrust After Distribution structure.  Likely, that won’t happen, at least not yet anyway.

The 6668 level remains my support level.  One thing concerns me is the Money Flow indicator; it’s falling.  Other than that, all “systems” remain bullish and I remain (nearly) fully invested.  Volume will typically drop off between Christmas and New Years and attentions divert to the holidays.  We may have to wait until the new year (and new tax basis ?) to see just how strong the underlying market really is.  But for the time being . . . “no worries”.

Here’s a table of short term sector strength –

Wishing you & your family a very Merry Christmas.    ………… Tom  ……….

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

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.

 

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