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Market On “Pause” February 23, 2019

Posted by Tom in Thoughts.
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Feb 22, 2019 – A quick look at the chart below shows what’s been going on for the past week and a half . . . . narrow range bars not really going “anywhere” very fast.  Generally narrow bars indicate that buying and selling are about equal; little momentum in either direction.  This can be the start of a pause or worse yet, Distribution where “sellers” are liquidating into the willing public (buyers).

For now we can only assume a temporary pause in this market because volume remains near the 20 day “average” level.  If volume was higher, I’d lean toward the Distribution theory.  Other that that, the chart indicators continue to show “Bullish” readings.  A break decisively above this 7486 level would confirm bullishness, but there is always a possibility of a breakdown to the 6931 level IF we get some bad news.  And . .  news seems to be a big factor in this mature market.

We are seeing some rotation in the sector tables.  The current short term one is below.

Not much else to say as we continue in a generally positive way.  Have a good week.   …  Tom  …

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

Resistance in an Up Trend = a Close Watch February 17, 2019

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Feb. 15, 2019 – OK, this is sounding like a broken record but the (US) market remains in an upward, bullish trend.  My concern is that over the last 3 days the price action has yielded narrow range bars.  This accentually shows that buying and selling are about equal with no “winners”.  The volume on these bars is just a little above average but not much.  If we saw higher volume I would be much more concerned.  Perhaps traders didn’t want to hold anything over the long weekend (Monday is a US financial holiday).

The bottom line is while we’re concerned, we must / should remain invested for the time being.  The major concern is that a major news item will come out of the blue and drive this market down 10% in a matter of hours.  It could happen; right now it’s just a concern.  Also we’re just at a resistance point of 7486 on the NASDAQ Composite Index (green dashed line).  Perhaps a likely spot to pause or ?

There’s been some sector rotation going on with Energy & Services and Healthcare moving up while Internet and Real Estate are moving down.  Again, I point out that the table below is momentum and volume driven in the short term, and thus changes rather quickly.

That’s about it, “short and sweet”.  Staying the course with a close eye on price action / reaction.  Have a good week.   ………..  Tom  ……….

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

 

A Minor Pause February 10, 2019

Posted by Tom in Thoughts.
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Feb. 8, 2019 – This week we saw a minor pause in this steady advance; that is expected and overdue.  Though one may think of this as an Upthrust (of price) I really doubt it due to the lack of volume.  In fact the volume this past week was generally edging lower.  It just looks like any future buyers are just waiting.

This pause around the 7485 level (dashed green line) is a logically place to rest at.  An oscillation of prices between 6930 and 7485 would be rather “normal” if it comes to pass.  Everything else appears fairly positive for the time being.  One chart I found of interest was the amount of funds withdrawn from mutual funds in December (chart below).Once again the casual investor just does not like volatility and their market timing is pretty poor.  That withdrawn money represents “new money” that has potential for driving price up once it decides to come back in.  As the old saying goes “The market will continue to go higher until the last person buys it”, or something like that.  No doubt that we live in volatile times and the computer trading programs seem to amplify any move even more.

A quick look at the short term sector strength table below:

I’m trying to stay in the leaders by avoiding the lower (red) percentile sectors.  Again, this is short term so a fall from the top rank is not necessarily a terrible thing since it can be just a pause and the raw score may indicate a minor move anyway.  Not much else to say.  I remain very near fully invested with many stocks in those strong sectors.

Have a good week.     ………. Tom  ……….

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

Signs of a Pause February 2, 2019

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Feb. 1, 2019 – While the overall trend of this market remains up, by mid week there were some signs starting to show themselves of a possible weakening of momentum.  In my more complex market model I got a “Caution – Move to Cash” signal that continued into Thursday but never triggered into an position change.  This model is fairly sensitive so not every “Caution” gets confirmed, but the case remains that momentum could very likely be changing.  Bar Strength has dropped and Fridays bar spread (the price difference between the high & low) was very narrow.  Narrow bars show that selling and buying are about equal and after a nice run up that could mean a pull back.

The chart above does show current prices at / near the 7225 resistance level so let’s keep an eye out next week for some type of pull back / pause; it’s overdue anyway.  A look at the number of stocks in the S&P 1500 Index that are in Accumulation / Distribution is shown below.  Very strong indeed.

Also the number of stocks that are showing strong Price Strength is equally impressive.

With so much “green” a pause or minor correction would be normal.  For this reason I’m a little hesitate to add any more positions right now.  I’d like to see what this market does in the next 2-3 days first.  We are starting to wrap up the earnings season now and the results have been generally OK with a few surprises.

Here’s a look at what Industry Sectors are strongest in the relative short term:
I’m about 75% invested right now, waiting to complete re-accumulation, but watchful in the near term.  Have a good week.  ……  Tom  ……

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

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