Special Risk Capital Management LLC

Back in the Channel Again March 17, 2018

March 16, 2018 – The NASDAQ Composite is “Back in the (Saddle) Channel Again” . . . guess I’m showing my age.  🙂  But in any case prices have returned to that “Long Term Channel” (gray on the chart).  That’s great but there are some signs of at least a slowing of the advance (chart below).

Sentiment (top) remains positive but Money Flow & Volume Flow are slowing / weakening.   My new Price Strength indicator also shows a “Neutral” status.  The 7332 level is the first support level with 7205 being more of a “primary” level.  Breaking these will raise concerns.

It’s been a while since I’ve shown the S&P 1500 stocks in the pie chart format, so let’s look at them.  The % of stocks in a Price Strength position:

This confirms the recent advances, but Neutral is about equal to Strong, which indicates the moves are not universal; one should be selective for sure.

Next are the % of the 1500 stocks in Accumulation (buying) and Distribution (selling) status:

Not much revealed here.  This was not a great week for the previous leaders (Tech. Semiconductors, Internet), the big movers were more defensive in nature such as Utilities and Real Estate.  IF this is an early move to a defensive position we should monitor those sectors closely next week for follow through and clues.

I am 80% invested, having paired down a few lagging stocks.  If my Price Strength indicator softens more I’ll continue to raise Cash and / or hedge positions.  Have a good week.        ………… Tom  …………

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