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Watching & Waiting for Something September 29, 2018

Posted by Tom in Thoughts.
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Sept. 28, 2018 – We’re in a classical trading / consolidation range and the market seems to be just “watching & waiting” for a reason to go up or down.  There is plenty of news to spark things, but we just haven’t seen “The Big One” yet.

8105 is my resistance level (green) and 7976 my support level (red); these are (my version) of Wyckoff “significant bars”.  I’ve mentioned before that the low price of a weekly bar that closes much higher on volume is a significant price level of support.  That’s where “buying” last came into the market.  As is the high price of a weekly bar that closes much lower on volume is a significant resistance level; where “selling” came in.  The tricky part is in a consolidation phase where these two levels tighten up and get close to each other.  But, my feeling is that we may be in an Up Thrust phase of a Distribution structure; that remains to be confirmed.  Let’s not get tooo bearish just yet though.
I note market sentiment remains negative, Money Flow a little bearish, Volume Flow just sideways, not saying much.  (Short term) Price Strength just kicked up to slightly bullish.  Long term trend line channel is up and Short term channel shows a price break above the upper line, which is bullish.  The problem with (my) automatic Trend Channel lines is that they need price pivots (swing highs & lows) to reference and draw off of, and in a consolidation, that can take a while to develop.  I’m still thinking we could head lower to around 7700 on the NASDAQ Composite Index.

Let’s look at where strength is in the market in the short term –
Biotech, HealthCare, Energy (oil) and a very few Technology companies are showing up in my stock scans.  Japan has been doing well and I’m watching Latin America as well.  China is a rollercoaster for the time being.  Well, there’s not much else to cover.  I do have positions on but also a light hedge” just in case.  I’ll put more hedge on or remove it when this market gives me a better indication of direction.  One thing to gauge the market strength is how it reacts to news (either good or bad).  I learned that a long time ago taking a course from Michael Price.  (“Strong markets don’t react much to bad news, where Weak markets fall hard”.)  It will be interesting to see how this market reacts in the coming weeks.

Take Care, Good Trading and have a good week.  ….  Tom  …..

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

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