Special Risk Capital Management LLC

Weak Market Looking for Direction(s) August 26, 2017

Aug. 25, 2017 – I’m very busy over the next couple of weeks, so this will be short and to the point(s).  This market continues to show signs of weakness in the form of “lack of buyers”.  No major moves to the exits just yet, but any bad news will likely change that quickly.

Looking at the chart below, we see lower swing highs and lower swing lows; plus Money Flow and Volume Flow are headed down or are weak.  Market Sentiment remains Bearish.

Note in the lower pane that volume continues to be below average; just not much reason to buy in here.  Without buyers, the markets will go into consolidation, and IF there are sellers, it will go lower.  Basic “Supply & Demand” stuff.  I am watching the 6216 support level (in red), but have a feeling that we could easily slip towards the 6141 level easily.

Looking at the stocks in the broad S&P 1500 Index (below), we see that nearly half are stuck in the “Neutral” price strength area, with more in the “Weak” area than in the “Strong” area.

Make no mistake.  This market is weak and looking for direction . . . either up or down.  It is very susceptible to news, so we must be extra careful.  I have sold some weaker holdings and have add a small “hedge” (i.e. bear fund) to help control risk.  Hedges can be taken off quickly if needed and I just look at them as “insurance” against “bad stuff” happening.

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

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