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Up & Away February 13, 2015

Posted by Tom in Thoughts.
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I am happy with my call last week about the likelihood of this market breaking upward.  There were just to many things that indicated improvements that have not been there at previous swings higher (& then to fall back).  But we’ve come a fair way quickly and it would not be surprising when the market take a breather correction, and that level could very well be around 4810 (the breakout level).

NASDAQ

How the market acts during that correction down will tell us the true strength of this market.  Scenario 1: index falls to 4810 on increased volume (especially on “average news”) = a weak market, prepare for continued retreat.  Scenario 2: index falls to 4810 on light volume = temporary lack of demand, market still strong.  Scenario 3: index does not fall back, continued buying and moves upward = watch the volume, if light be cautious, if average or slightly heavy that’s good, very heavy indicates selling.

Note the red trend lines spotted in.  They are (very) preliminary to indicator that this 45 degree move is slowing; and it will slow.  The longer this market continues going up the more panic will be exhibited by those who remain out of it.  If you take a look at bonds over the past 2 weeks you’ll see that the “safe haven” has not been a great place to be.  The big wild cards in this entire idea are what is going on with the Greek debt and with the Russians in the Ukraine.  Either of these could turn the trend quickly depending on the severity of the news.  Right now the markets (domestic & international) are betting that things won’t fall out of bed.  We’ll see.

Below you’ll note the top 20 major sectors (out of 46 total).  These sectors roughly are similar to the Bloomberg major industry list.  I’ve included the A/D (accumulation/distribution) rankings and the A/D Velocity; all “green”.

Top 20 sectors

Have a good week.   ………..  Tom  …………

price chart by MetaStock; table by http://www.HighGrowthStock.com; used with permission

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