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But Wait . . There’s More ! (?) January 20, 2018

Posted by Tom in Thoughts.
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Jan. 19, 2018 – To borrow a phrase from American TV commercials (“But Wait, There’s More!).  A classical “come on” to grab your attention and lead up to a “call to action” (i.e. buying).  This market shows no signs of letting up, but we should keep an eye open for sector rotation.  Even though the indexes keep moving higher; is every sector participating?  And, for good measure, are international stocks doing even better? Ahh Ha, good questions.

Sentiment, Money Flow and Volume Flow all bullish; check.  Prices above the trend channel and above key support levels; check.  And so the trend continues . . .until it stops.  And there in lies the key.

The US markets are giddy about lower taxes and the re-patriotization of offshore funds.  OK, that will last until earnings don’t also increase.  The rest of the world is also recovering from a general world wide recession.  And that recovery may, just may be more stable and less driven by news.  Cases in point are Latin American countries (Brazil & Mexico) and Emerging Market countries in general (notably China).  Japan & Korea doing all right as well.

In the US the oil trade may be slowing, so I’m careful there.  Industrial and Consumer Services stocks along with select Tech stocks are strong.  So, it makes sense (to me) to be diversified among the strongest world sectors and keep an eye open for how the (US) markets react to “bad news”.  Whether it be a government shut down or new special council actions.  This market wants to go higher, but it does not want to lose much money.  I’d call it “impatient”.   If things don’t go well (go up), there will come a time to sell.

I’m “long” but careful to see how this market reacts to news since the economics are a tail wind for the time being.  News is important right now.  Have a good week.  ….  Tom  ….

Price chart by MetaStock. Used with permission.

 

Roll’in . . Roll’in . . . Roll’in January 12, 2018

Posted by Tom in Thoughts.
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Jan 12, 2018 – This market just keeps “Roll’in (Down The River”; pardon to CCR).  But, this too will end.  Why am I so dog gone concerned?  Here’s a chart of longest periods without at least a 5% correction.  We’re waaay up there as the third longest period.

OK, that doesn’t “prove” anything but it does show that this move, for this long, IS unusual.  And that is one of the big reasons why I keep a close eye for a possible correction.  Maybe not a bear market, but at least a meaningful correction.  With extra “income” coming to corporations in the form for lower taxes, this market is in love with stocks.  And that could continue for a while.

Is this market over bought and over optimistic?  The price chart below shows the number of stocks in the S&P 1500 index that have strong, neutral or weak near term price action.

What I think is more typical “healthy” is an even split between strong, neutral and weak.  That shows balance and not euphoria.  Waaay to much “green” up there for my liking of a stable market.  Next are the number of stocks in Accumulation (buying), Neutral and Distribution (selling).

The same thing goes here though not quite the unbalance as was in the price strength.  In short, the market is getting ahead of itself and pricing in all of that good news.  We’re in the earnings reporting season and all eyes (ears) will be on forward guidance.  Expectations and fear drive a market and right now they are excepting a lot of good news.

For now I have moved the initial support level up to 7111 on the NASDAQ Composite Index.  All primary indicators are positive / Bullish but the price is above the upper channel line; again, over bought.

This can go on for quite awhile, so I remain invested and in this market.  Strength is in the Oil and Emerging Market sectors, followed by Industrials and Basic Materials.  Take Care and have a good week.        …………….. Tom  …………..

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

New Year – New High January 7, 2018

Posted by Tom in Thoughts.
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Jan. 5, 2018 –  Happy New to all.  Well we didn’t have to wait very long in the new year to see if tax selling at a lower rate would influence the market.  It didn’t.  The broad NASDAQ Composite Index (below) just kept on moving higher, and is now in a rather “over bought” condition (that being above the upper price channel).

I’ve raised the support levels to 6924 and 6668 based on the lows of significant weekly bars.  This is where buying come in and thus a violation of the lows of those strong bars could be a sign of a change of character.  So far the sellers are holding and everyone else is buying.  So be it.  The Money Flow indicator has kicked up after registering the low holiday volume and reverting toward a neutral (zero) reading.  Volume flow and Market Sentiment remain positive.

Not much more to say except the Up Thrust that I was concerned about does not appear to be forming; I’ll likely drop the tentative label next week.  This is looking more like continuation.  Other than that, here is a list of short term sector strength.

This is generally where I like to position my stock holding.  I remain fully invested for the time being.  Have a good week.   ……..  Tom  …….

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

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