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Steady Move Higher July 27, 2019

Posted by Tom in Thoughts.
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July 26, 2019 – Blow out earnings by Tech and Internet companies are keeping this market moving higher.  The hope for a FED funds rate cut are adding fuel to the fire.  So far, there’s not much to stop the marcher higher . .  until the last buyer buys into the market; but that may be a while off.

I’ve added a new indicator on this NASDAQ Composite chart (click on it to enlarge).  It’s called the 3 bar reversal and it’s shown via solid red & green lines.  I’ll leave it to those who are interested to “Google” what it is, but suffice it to say it is an aggressive stop / level indicator.  This is in addition to the dashed lines which indicate lows & highs of a significant weekly bar (generally slower to change, but still significant).

Of note are that all indicators on the chart are positive, but let’s see just how broad the strength is by looking at the stocks in the S&P 1500 Index below.

% of Stocks in Accumulation or Distribution –

% of Stocks in Strength or Weakness –

Generally this is fairly strong, though a little “over bought”.  A balanced move would be roughly 1/3 in the green, a 1/3/ yellow and 1/3 in the red.  But this reflects the recent strong buying in last weeks move.  Strong earnings and the hope of lower interest rates are a “magically thing”.    🙂

The table below shows where that current strength is in the market:

Once again, Technology companies are leading, which is a positive sign.  What adds to this is strength in the Bank & Financial sectors, which is encouraging as well.  Strong indexes are mid cap and small cap, another indication of “risk on” trading for investors.

I remain mostly invested and will add more in the coming week as conditions & opportunities warrant.  Right now that is looking fairly good.  More earnings will be coming out and barring any surprises, things continue to look up.

Have a good week.         …………  Tom  ………..

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

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Yellow Flag – Caution July 20, 2019

Posted by Tom in Thoughts.
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July 19, 2019 – First off, there are a couple of sensitive indicators that are showing caution and a possible down turn here (started on Friday).  Some are price based and a few are more general based on indications of weakness driven by a lack of continued buying.  In any case it’s not necessarily time to bail out or hedge, but a time to be more observant.  (click on chart to enlarge it)

IF price on the NASDAQ Composite Index closes below the low on Friday, I’ll consider putting my Index model into Cash.  If it continues to drop below the support level at 7915 I would consider putting on a “light hedge” for protection.  Further weakness would increase the hedge to protect the rest of the portfolio.  On the stock and ETF side I’m looking for signs of weakness, especially in reference to the broad market.  The idea is to detect Distribution of shares; i.e. liquidation / selling.  Price weakness on increasing volume is not a good sign.

A lack of buying (Accumulation) doesn’t necessarily mean selling, but it could lead into that.  I’ll watch the VIX Index, which shows the ratio of call volume to put volume.  If these option traders are getting concerned, that’s usually a good sign that I should be too.  The question is always just how far.  The bottom line is no one really knows until buying resumes.  Remember, prices only go higher if there are more buyers than sellers.  Buyers need to see the possibility of even higher prices to buy now.  Earnings continue next week and we’ll see what effects they will have on the overall market.  Microsoft was good; Netflix not so much.  So far, a mixed bag.  Momentum is slowing; that much is known.

Right now Technology, Consumer Goods and Banks are in the lead in the short term.

That’s about it for this week.  Yellow flag is flying . . . watch for Red.  Have a good week.  ……  Tom  ……

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

Continuation (higher) July 13, 2019

Posted by Tom in Thoughts.
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July 12, 2019 – Not much new to talk about as you can see below this market just continues to grind higher (click to enlarge chart).

All of the chart indicators confirm a positive market & environment, so the next most important thing is what sectors are moving and performing best.  That table is below.  (I should note that the performance metrics are near / short term and can change quickly.)

We’re beginning to enter into the 2nd quarter earnings reporting season.  This market is priced for good to great news, so any significant disappointments, especially from major bellwether stocks in consumer retail, technology or transports would put a damper on things.  As always, a major news item could tip the scales lower.  We’re at / near new highs so caution is warranted (i.e. topping & distribution).

Have a good week.        ………….  Tom  ……….

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

The Summer “Doldrums” Setting In July 6, 2019

Posted by Tom in Thoughts.
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July 5, 2019 – It appears that the Summer Doldrums are setting in, which is rather typical for this time of year.  That could change quickly with a significant news item; China trade, Mueller testimony, Iran conflict(s), etc.  No doubt the trend is generally up, but once again we’re at the top of a trading range.  Stocks will need some fuel to go higher and since the valuation is pretty much fully reflected in prices we’ll need something to push higher.  Nothing is “cheap” out there.  This will be a “stock pickers market”, so one must be selective as not everything will necessarily go up.  I’m doubting that not much will happen until the Fall.


This was a shorten week of trading in the US with many folks on vacation.  Activity is slow this time of year.  Of note is the strength in Technology issues (electronics, software, semiconductors, even Biotech).  Telecom and Banks jumped up a few notches this past week too.  Mid Cap stocks continue to show the most strength in the near term.  Sector strength table is shown below.  (click on any graphic to enlarge it for easier viewing)

That’s it for this holiday week.  Take Care & Good Trading.    ………..  Tom  ………..

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

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