jump to navigation

Fall Back to Previous High July 29, 2017

Posted by Tom in Thoughts.
Tags: , ,
add a comment

July 28, 2017 – About noon on Thursday a couple of stock analysts decided to downgrade a few tech stocks; and that was it.  Caution set in with a broad market dip, then the computers stepped in to sell, followed by “resting” (in the market)  stops being hit.  Friday was a tight range day holding on to price levels.  I found it interesting that the Index stopped falling right near the previous high (red circle), adding to the adage “what is resistance once broken, becomes support”.

And so it goes.  If this market is to remain strong, this current price level is a logical place to stop and hold.  The next level down is 6164, but that would certainly be considered much more serious, and we could see some serious selling hit the markets.

For the time being I’m patiently holding my longs in growth stocks but watching for signs of continued weakness; we’re overdue for a +10% correction IMHO.  In the mean time I note that the other indicators above remain positive so this appears to be a shallow correction . . . more like a blip.

Where I am seeing strength is in China, Emerging Markets, Latin America, Internet & Biotech sectors.  Telecom and Technology are not far behind.

That’s it for now, have a good week.     ……… Tom ……..

Chart by MetaStock, used with permission.

A Break Above July 21, 2017

Posted by Tom in Thoughts.
Tags: , ,
add a comment

July 21, 2017 – Wednesday of this week the NASDAQ Composite Index broke above the previous high and continued on for the rest of the week.  The old favorites were back at it: Technology, Biotechnology, Semiconductors and even some Basic Materials.

One area that has been under the radar of some folks is the International markets.  Latin America, China and Emerging Markets have quietly moved higher as well as most developed markets.  On the chart above it’s easy to see the positive flow of Money (top pane) and Volume (second pane).  Market Sentiment also turned bullish this week.

The bottom line is we don’t have much “choice” but to continue to be  long / bullish in the market.  There are geopolitical risks out there but this market just does not seem to care.  The only “caution” is that average daily volume is moving lower.  The question is whether this is due to summer vacations or the lack of new buyers coming into this market.  The rather tight daily bars (range between the high & low price) is a little concerning as well.  That narrow range indicates that buyers and sellers are about equal.  That’s OK with low volumes, but let’s keep an eye open for the “smart money” trying to slowly leave this market and leave everyone else “holding the bag”.

Let me know (via the comment section) if there is any topic that you’d like me to cover.  Comments are always welcome.  Thanks.

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

Chart by MetaStock; used with permission.

Still Within (trading) Range; Sans Volume July 15, 2017

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

July 14, 2017 – Listening to the financial media one would think that “Happy Days” are here again; and the markets have recovered from a small swoon.  But with all of the talk about “new highs” we should consider that we are really only returning to the top of a trading range.

We bounced off the 6097 support level and we’re now just about near the previous peak (dashed purple line).  One thing I note is the steady lowering of volume over the past week (lower arrow). Also “market Sentiment” is bouncing between neutral and Bearish.  OK, up is up and the previous leaders (tech, semiconductors, biotech, etc.)  are once again doing well.  Maybe the lack of volume / interest is due to the summer vacation schedule, but maybe it could be lack of commitment.  That lack of commitment could be forming an Up Thrust.  We’ll just have to wait and see next week.

For now I’ve removed my hedge (protection) but have not jumped back to a market “long” status.  The market is showing some positives as shown below; the % of stocks in the S&P 1500 Index that are being bought/sold, with price strength strong/weak.

S&P 1500 Accumulation & Distribution –

S&P 1500 Price Strength –

Overall these pie charts are showing a reasonable balance between the three status levels, and that’s usually a healthy sign.  Looking at a sector strength table below:

I also should mention that a few Emerging Market countries are doing well in the recovery.  Since we are in the middle of earnings reporting, the market could easily react to unexpected bad news about key industry companies as well as any geo-political news.  With Russia and Healthcare being major topics, that could be a factor.  I feel that in order to decisively break above the previous high, we’ll need to see volume (buying) increase too.  Without that I’m still cautious.

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

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

July 9, 2017

Posted by Tom in Thoughts.
add a comment

July 7, 2017 – I’m late posting this because I’m away from my home office and busy with a few things.  This will be a short post because I don’t like typing on a small keyboard, but really, not much has changed.

I’ve gone back to an older posting app so that readers can double click on graphics to enlarge them to view them in more detail; the new version didn’t allow that.

Looking at the NASDAQ Composite chart below we see general weakness.

Volume Flow is anemic, Money Flow is slowly dropping and Market Sentiment is Neutral.  The 6097 support level is holding for now and there is generally more selling pressure than buying pressure.  It appears that investors are waiting for the second quarter earnings reports to show them the way higher or lower.  There just doesn’t seem to be any good reason to buy or sell, so the markets go sideways in a trading range/

There also doesn’t appear to be very many strong stock candidates to consider buying right now either.  I have a small hedge on to provide some downside protection, but as long as this level holds on a closing basis, I won’t add to the hedge or do much selling.

That’s it for now.  Have a good week.     …………….  Tom  ……………….

t

Market Undecided July 1, 2017

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

June 30, 2017 –  Before I get going, I’d like to wish Canada a Happy Birthday (Canada is 150 years old this week).

The U.S. markets were lis-less and undecided this past week, as were the world markets in general.  True that vacations are on the minds of many but it’s really deeper than that.  There was / is a fair amount of expectations for future economic growth and some are coming to the conclusions that it may not be as significant as originally thought.  Some traders are predicting another 5-8% drop on top of the current 5% drop.  That would be a mild correction so no need to “jump out the window” just yet.

NASDAQ

My new chart of the NASDAQ Composite shows the weakness in the background.  The red bars indicate short term weakness and the Volume flow is steady to Bearish. Note that Money Flow remains positive / Bullish.  More important are the support levels.  The 6164 level was violated on a Closing price, indicating possible continued weakness, but the Lows of those bars remain intact.  I would only start to get concerned if the Low of the bar where the Close violated a support level.  So, I’m cautious as this market is only showing signs of being undecided.  The next level down is 6097 (that’s the Low of a weekly “significant bar”.)

The table below shows sector strength / weakness in the short term.  Note how Semiconductors has moved from the top to the bottom.

Sectors

The bottom line is we’ll just have to wait and see if the market “decides” whether to drop any further or just go horizontal next week.  The “Summer Doldrums” are here.

Have a good week.  ……….  Tom  ……….

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

%d bloggers like this: