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Entering Into A “Wait & See” Period (?) February 28, 2014

Posted by Tom in Thoughts.
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Before I forget, if you want to see an update on overall (i.e. S&P 1500 stocks) status on Price Strength and Money Flow (accumulation / distribution) as well as the strongest & weakest sectors, then you’ll find that in my (March) monthly client newsletter.  That newsletter will appear under that tab by the end of this weekend.

“Wait & See”, that’s my take on what we’re seeing right now across the world indexes.  We’ve had a nice recovery in February but that has brought us about back to where we started the year on January 2.  So the volatility is coming into the market much more than we’ve seen in 2013.  That likely will continue into this year.


In the chart above (click to enlarge it) we note that prices are once again at the upper trend channel, and we can expect a reaction of some sort in and around that upper channel.  Prices this week stalled out without much progress.  We saw Supply (volume, blue circle) come into the market on Friday along with some modest weakness; a possible Upthrust point.  The Money Flow chart (in red) above the price bars echoes the softening in Demand.  This is why I see a “Wait & See” situation.  The situation in the Ukraine with Russian troops entering that country did put investors on edge; another “Wait & See” as many did not want to be Long over the weekend.

I moved the “Bull” / “Bear” scenario lines out to the current prices, as I can see this unfolding in more than one way.  What did surprise me is the weakness in the previous market leading sectors.  Biotech, Healthcare, Internet and Miners were unusually soft this week.  If that continues we could be returning to at least the mid-point of the channel, maybe lower.  Maybe a good time to tighten stops and watch the market intraday for a follow through of weakness.  Overall, the market remains in an up trend so let’s not over react, but join the market in a “Wait & See”.  We shouldn’t have to wait very long.

Have a Good Week.             …………..  Tom  …………….


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