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We’re Not In Kansas Anymore March 24, 2017

Posted by Tom in Thoughts.
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March 24, 2017 – Apologizes to ‘The Wizard of Oz’, but this market trend has broken the lower channel line (note below) and that verifies a “Change in Character” IMHO.  The “Trump Rally” has lost its momentum, but the bigger question is ‘has it lost its direction?’

It’s too early to tell just yet since we’ll need a significant Close below the support level (5748).  Looking at the price and volume action, right now it just looks like the market is weak on a “Lack of Demand” / buying.  Volume is low, so there isn’t a rush to get out of this market, at least not yet.  We could just bounce around in a trading range until earnings come out.  Then, we will likely see some action one way or the other.  The lofty expectations for the Trump admiration are coming back to earth and that’s not really a surprise.  It had to happen, this market can’t continue going at this pace without some pause or correction.

We see confirmation in a weak Money Flow and Bearish Volume Flow indicators.  My Sentiment indicator has switched to  Bearish, but remember, we need price follow through to the downside (below support) before we can raise the “red flag”.  Time to honor stops and pay particular attention to market action.  Is the market down, or is it down on increasing volume?  A big difference.

We do have strength in the market, as show below:

The overall stocks in the broad S&P 1500 Index are showing weakness with the number of stocks in Distribution, and increasing.

Price Strength (below) also parallels that of Accumulation / Distribution (above).

I opened with: “We’re Not In Kansas Anymore”.   But we’ll have to evaluate price and volume next week to get an idea where this market is headed.  Right now, I’d say laterally until earnings forces a move either way.

Have a good week.  …….  Tom  ………

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

Still Chugging, but Momentum Slows March 18, 2017

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March 17, 2017 – This market continues to chug along even in the face of “not so positive” political news.  We’re less than 4 weeks away from the next earnings reporting cycle and that could be interesting.  I feel that a lot of good news is priced into this market and if earnings or the expectations don’t hold, that could be about it.  Until that point, it’s likely only minor 3-5% pull backs.

On the chart above I’ve tentatively labeled a possible Buying Climax (bc?) along with an Automatic Reaction (ar?).  This is just a “heads up” possibility as volume doesn’t really support it very well.  Sentiment, Money & Volume Flows all support a Bullish position, so we go with that flow.

The important part is to watch what sectors are strongest and leading the averages.  The table below shows my current sector rankings.

Since these are US sectors, I should also note that China and International funds in general are doing fairly well.  That includes Emerging Markets and Europe.  These have climbed up my World Index ranking over the past few weeks.  I think I may “dip my toe”.

That’s it for this week.   ………..  Tom  ……….

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

Pivital Point (?) March 11, 2017

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Mar. 10, 2017 – This market could be at a pivotal point.  On the Bear side, we’ve seen the momentum in market leadership steadily fall for weeks now.  The momentum in the Advance / Decline line has dropped quite a bit.  Now, this does not mean the market “has to” fall or correct, but it is an indicator of slowing and shallow market leadership.  That typically means either a slight correct / pause in the up trend or a more significant correction.  Also, Small Cap stocks (considered to be higher risk) are not nearly as strong as the Large Cap stocks; agressive speculation drying up.

On the Bullish side, the VIX options index remains low (option traders are not concerned) and price support is holding up well.  The chart below shows this price support.  (click on graphic to enlarge it)

The Money Flow index (top window) is hovering around zero / neutral, so there is no significant selling pressure at this time.  Same goes for the Volume Flow.  My Sentiment indicators remain “Bullish”.  Until that purple lower trend gets broken on a Close and (more over) the 5748 support level gets taken out, I have to remain invested and long overall.

Price strength of the stocks in the broad S&P 1500 Index are pretty mixed, but tend to be much less strong compared to 2-3 weeks ago.

Accumulation & Distribution in those S&P 1500 stocks show a slowing down of buying (Accumulation) as well.

Here are the industry sectors that I’m trying to participate in for the time being.  This is where the strength is currently.

That’s it for the time being.  Take Care & Good Trading.      …….. Tom …….

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

In The Groove (channel) March 4, 2017

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Mar. 3, 2017 – So far . .  prices remain “in the groove”, i.e. the price channel.  Yes I’m cautious due to this extended rise in the market with valuations toward the high side.  But until the lower channel is broken (purple line) and then an import support level is taken out, I have to remain bullish / long.  Currently I see no signs of selling, at least not yet.  I’m watching the 5748 level on the NASDAQ Composite for a danger sign.  A close below that would concern me.

nasdaq

There is so much news swirling around that just about anything could trigger a stampede out of the market.  We see the more defensive sectors like Utilities, Healthcare, Insurance and Aerospace – Defense going fairly well.  I appears that the time to be aggressively long and sticking your neck out is long gone.  (note sector chart below)

sectors

That’s about it for this week.  Take Care & Good Trading.      ……..  Tom  …….

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