jump to navigation

Caution Ahead July 22, 2018

Posted by Tom in Thoughts.
Tags: , , ,
trackback

July 20, 2018 – I’m seeing the early stages of Caution beginning here.  No “Red Flags”, but just a “Heads Up” to pay extra attention to market action this week. The reasons are: lethargic Money Flow and the recent price / volume action.  Looking at the chart below I note narrow range bars (red ellipse; buying=selling demand) and very low volume (red arrow; much below the red 20 day average line).

Is this just a pause where there is equilibrium and hence little movement or is it Lack of Demand?  Either is possible but the classical chart pattern is a “Coil”, where prices go nowhere in a tight range only to breakout suddenly in one direction or another.  Personally, I’m favoring a Lack of Demand, which means a soft / lower market.  But as we’ve seen, any news item could break this equilibrium effect.

The table below shows what sectors are doing in the short term; what to favor and what to avoid right now.  I’m waiting for the market to move and IF it goes lower I won’t wait to lighten up my longs.  A touch below 7746 would concern me, likely back to a light hedge for protection.
That’s it for now.  Perhaps the “Summer Doldrums” have set in; or not.   Just a word of Caution for now.  Have a good week.   …..  Tom  …..

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

Comments»

No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: