Special Risk Capital Management LLC

Still Climbing In the Channel January 28, 2017

Jan. 27, 2017 – This (again) will be short because (again) not much has changed.  The chart of the NASDAQ Composite Index below shows prices climbing in a narrow range (blue circle) up the trend channel.

Volume is average to light and the narrow price bars tell me that buying & selling are about equal, but there’s no “rush” to do either one.  Money Flow is positive as is Volume Flow, but clearly buying momentum has slowed down now.  Market Sentiment is positive having bounced off of neutral awhile back.

Looking at the broad S&P 1500 stocks in that index we see the following:

Price Strength (above) is fairly “normal” and evenly spread out.

Accumulation (buying) and Distribution (selling ) in these stocks are pretty “normal” for a market in an up trend.  I still see the Advance / Decline line momentum slowing, showing that the rush to buy that occurred after the elections has slowed significantly.  That maybe OK, but a sign that things are slowing down.

In order for this market to push higher we need some good earnings news.  So far it has generally been OK.  Next week we’ll have a number of “bell weather” stocks reporting; most notably Apple.  That could set the mood one way or the other.  For the time being I have to stay invested but I sure am watchful as this rally could correct sharply on any type of news.

Have a good week.    ………..  Tom  ………….

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