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Cautious Advance April 11, 2015

Posted by Tom in Thoughts.
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A good week for the stock market as we see in the chart below.  On Monday (4-6-15) prices broke and close above our 4905 level and never looked back.  “Money Flow” (a combination of price and volume) improved but only modestly.  Market Sentiment is still Neutral, that’s OK, but not great.

NASDAQ

Volume is still fairly light.  That’s fine and maybe caused by the Easter holiday week but something to watch.  I’d like to see volume back up closer to average (the red line).  I’ve removed the Wyckoff labels.  As I’ve said before, I like to label points as possible turning points before they get confirmed.  That way it tends to keep me on my toes and avoid psychological “surprises” later if the price structure develops.

The pie chart below shows what sectors “high potential buy candidates” are in.  Since many growth stocks travel in packs / groups, this can give us an idea where institutional capital is flowing as far as investment and not short term trading is concerned.  I’ve drawn a few arrows on the chart to show how the list travels counterclockwise.  Click on the graphic to enlarge it for easy viewing.

Hot Sectors

One other point.  Keep an eye on International markets and not just the US.  China, Emerging Markets, Latin America and Japan are showing strength.  Also I’m watching the Oil Service sector and Oil & Gas in general.  These have been “under loved” for quite some time.  Perhaps time for cautious, scaled in positioning.

So that’s about it for this week.  Take Care.  …….  Tom  ……..

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

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