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Market Sliding Higher, But . . . January 7, 2017

Posted by Tom in Thoughts.

Jan. 6, 2017 – Monday of this week was a very weak day of the markets.  We got (nearly) down to the 5340 Support level before bouncing back up.  My proprietary trend indicators (not shown) flashed a Caution, Trend Changing signal, but immediately when back to a “stay long” status the next day.


It’s just that kind of an environment.  Stocks (particularly U.S. ones) are “over bought” and valued highly when compared to historic earnings & price levels.  There is much anticipation of a correction of roughly 5-8%, so folks are nervous.  No one wants to miss gains, but sure don’t want to give back anything either.

I’ve changed my pessimistic Wyckoff UTAD label and slid it up the price bars.  Since we’re at market highs what I need to see is a bar that has a new high with a very low close, on light to moderate volume.  In short, the retail investor rushing in and selling coming in late in the day.  The next day would be a solidly wide spread down bar on heavy volume (selling).  Then the Up Thrust bar would be confirmed.  But . . . we have NOT seen that yet.  A break below the 5340 level on the NASDAQ Composite Index and breaking the purple trend line would be another confirmation of a Change In Character.  I note that volume is rather light (red line on the volume bars), as it is headed lower.  There doesn’t appear to be continued buying at these levels.

I’m always looking for a trend change, but until that happens, I have to look for stocks and sectors that show strength in the current market.  Below is a look at the sectors that I’m paying attention to right now.


That’s about all to conclude at the present.  Be very watchful.  Next week has a host of major U.S. political items coming up with hearings and news conferences on tap.  Investors are nervous; not a stable environment.  Have a good week.   …  Tom  …

Price chart by MetaStock; pie chart by http://www.HighGrowthStock.com. Used with permission.


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