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Market Back but Lathargic March 16, 2019

Posted by Tom in Thoughts.
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March 15, 2019 – The market has recovered from its latest “March Swoon”, but the underlying data is not that impressive.  We did break above the 7643 level which is positive, but you’ll note in the chart below, Market Sentiment and Dollar Flow remain behind in the recent move.

What that means is that certain areas, notably Technology based, are leading while other areas are just “so – so”.  Let’s jump into the sector strength tables and see where the leadership lies.

Tech based Electronics, Software, Semiconductors, Wireless and (to some extent) Biotech & Telecom companies are moving this market forward.  What did show up in the table is Emerging Markets (i.e. BRIC: Brazil, Russia, India, China).  China & Brazil are key factors right now and perhaps the weaker U.S. Dollar.  But . .  we still see Utilities Holding strong.

Not much more to comment on right now.  I’m about 80% invested Long and will phase more into this market over the coming week IF it continues to strengthen, hopefully broadening leadership.  Have a good week.   …….. Tom  ………

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

A Pause That Refreshes March 9, 2019

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March 8, 2019 – It appears that we’re in the midst of the long anticipated “pause” in the market recovery from the Fall correction.  I’m thinking that this is a “pause” because, so far, we haven’t seen a significant Distribution structure.  I’m thinking that a 7 to 10% drop from the recent highs could be likely.  Looking at the chart below the called out resistance level of 7643 held as a “rejection of price” point with 6931 being the next support level below.  That 6931 level would be approximately a 9% drop.

Now, IF volume picks up on down bars next week this “pause” could develop into something more, so let’s not get ahead of the price action here.  Also noted are the confirmation of price weakness in Market Sentiment, Money and Volume Flow indicators.  The Price Strength indicators have gone to mildly bearish as well.  Looking toward the stocks in the broad S&P 1500 Index gives us an idea just how weak the overall market is.

Price Strength –The last 3 days have hit a large number of stocks moving to the weak side (red); the strong (green) section has diminished quite a bit lately.  This indicates a fairly wide spread decline.

Accumulation / Distribution –The number of stocks in a Distribution (selling) phase is not as great and is generally about equal to those in Accumulation (buying) and Neutral.  Fairly even on all three areas.  (Note: accumulation & distribution are a combination of both price and volume; two dimensional so to speak.)

Sector Strength –The table above shows the sector strength on a relative short term basis.  Not as much “green” up there but so far the Tech areas are holding up the best.

Over the past week my (more) involved market model went from Bullish, to Cash and as of Thursday is lightly Bearish.  The purpose of this model is to indicate when it is appropriate to “hedge” and protect the overall portfolio.  Protection is in the form of buying “bear funds / ETF’s” which are inversely correlated to the market.  Since Small Cap stocks are the weakest, that’s the index I purchased (bearish wise).  IF weakness continues I will buy more protection and go to a theoretical neutral / synthetic cash position overall.  The idea is to “win by not loosing”.  🙂

Also the number of stocks that I hold has gradually been reduced; selling the weakest ones.  OK, that’s a bout it for this week.  I’m expecting more weakness, but so far, not a rout . . . . that could change especially via a news item.  Time to be careful.  Have a good week.       ………… Tom ……….

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

Market Treading Water March 2, 2019

Posted by Tom in Thoughts.
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Mar. 1, 2019 – Before I begin, I’d like to note that the date at the beginning of all of my posts refers to the last data date when the text was complied and the data shown in all charts and tables.  This blog is typically updated over the weekend and the date is usually the Friday before (unless there is a holiday).

A quick look at the chart below shows that the market (NASDAQ Composite Index) basically did very little over the past week.  The Money Flow indicator has turned down but all of the other indicators remain positive / bullish.  This 7486 price area was the last time significant “buying” came into the market on a weekly basis; thus a possible resistance point.

Overall the market needs a rest so a pause is not unexpected and actually overdue.  Looking at the stocks in the broad S&P 1500 Index below we see a fair amount of green in both the Price Strength and Accumulation / Distribution pie charts.  (These charts tend to be more intermediate term as far as the time span is concerned.)  All positive for the time being.

Price Strength: % of stocks-

Accumulation/Distribution: % of stocks-
Sector Strength in the short term –

Note that there appears to be some sector rotation into Pharma and Biotech sectors; Tech, Industrials and Semiconductor stocks continue to do well.

That about it for this lack luster week.  I remain mostly invested and trying to go with the prevailing strengths that I see.  Have a good week.  …  Tom  …

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

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