Special Risk Capital Management LLC

The Moment of Truth ? October 9, 2015

I’ve just got this feeling that we’re close to “A Moment of Truth” with this market.  Take a quick look at the chart below:

There is a lot that’s positive from top to bottom.  Money Flow is positive and very strong, the green (accumulation) volume is gaining strength and Market Sentiment just turned bullish.  But . . . we still have not broken out of this trading range.  Friday’s bar was narrow on light volume; indecision with buying = selling.  We could just as easily rally up to the old 4905 level and “peter out” again.  This rally is stronger than the previous one so it’s not easy to discount it just yet.

Looking at the stocks in the broader S&P 1500 below, we note most in fairly strong Accumulation and the Price Strength is good as well.  (click to enlarge chart)

# of stocks in Accumulation / Distribution

# stocks in Strength Phases

There is a lot to like here but I’m going to need to see a Sign of Strength (SOS) before I begin to add very many positions.  It’s a good idea to have a few candidates ready and “in the queue” just in case the market takes off.  Next week should be that Moment of Truth.

Here are the industry sectors (& # of stocks in those sectors) that I’m paying attention to right now:

Have a good week.   ………..  Tom  …………

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