Special Risk Capital Management LLC

An Uninspired Market November 20, 2015

This week the market bounced off support level of 4905 (ish) and headed up.  And while the advance looked great there wasn’t much “umph” in it.  Sentiment remains neutral and volume on Up bars is muted.  I’ve spotted in a ‘bc’ (lower case, meaning not a major point) Buying Climax and a likely Secondary Test.  For the Wyckoff purest, these do not conform to classical price structures, but do help to ID support and resistance levels in the near term (at least for me).  I’m looking for a solid break through either of these levels before I jump in with both feet.

We could very well retest the 5165 level (resistance) and bounce back down.  It’s been that kind of market, in that kind of year.  I also note the Money Flow indicator which shows not much money (volume & price) flowing into this advance.  Thus . . not an “inspired” market; i.e. vulnerable.

A view of the stocks in the S&P 1500 (below) is very positive with over half signaling Accumulation.  (Though noted more light green than dark green.)

The strength appears to be in more of the large cap names than in mid to small cap stocks. This could just be conservative positioning as the year winds down from here; only a few weeks left in 2015.  Here’s the industry sectors of stocks that I’m monitoring:

(click to enlarge any graphic)  Software and media have a number of strong candidates and I note that Internet stocks in general (crossing those sectors) are high in my rankings.  Japan and Banking stocks bear some consideration as well.

That’s it for now, have a good week and beware of “window dressing” as this quarter winds down.  ………  Tom  ………