Special Risk Capital Management LLC

Market Chugs Upward on Lower Volume November 18, 2017

11-17, 2017 – After a major move to a new house and the major unpacking that goes along with it, I’m slowly approaching “normal”.  I wanted to talk about market “breath” (a.k.a. the number of stocks actually participating in a trend), but that will have to wait.  In any case, the market just keeps going higher.  One thing I do note is that the volume of stocks going up vs. those going down has slacked off.  That indicates a pause more than likely.  Also to note is that we’re heading into the holiday season where volume in general typically falls off.  No alarms, but something to watch.

I’ve moved the support levels up this week (based on the low of a strong weekly bar).  The logic is that a strong weekly “up bar” low price is where the buying started and hence a “commitment to buying” / Accumulation, thus strength & support.  On the NASDAQ Composite Index the first level is now 6668, then 6518.  If these levels get broken on a close, I get very concerned.  Last point; Friday was options expiration and that brought low volume (a little unusual).

Let’s look at the stocks in the broad S&P 1500 Index as a clue to overall market health.

% of Stocks Showing Strength:

% of Stocks in Accumulation or Distribution:

Nothing to get concerned about right now as there isn’t an over bearing amount in one category or another.  Though I should note that these are “slow” indicators and thus are more useful for significant moves and not minor corrections.

I am seeing some weakness in previous market sector leaders such as Semiconductors & Technology and some strength in more defensive sectors as Real Estate and Utilities.  Nothing major as it could be more of a pause, but since I am in these areas I’m paying close attention to them.

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

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