Special Risk Capital Management LLC

Keeps Going and Going and Going . . . . January 18, 2020

Jan. 17, 2020 – This market is like the TV “Every Ready Bunny” (a battery commercial).  It just keeps going higher and higher.  But . .  we know from experience that it WILL stop.  The only question is when.  So, for all practical purposes, there really is not much new to talk about.  A few earnings report last week (mixed) with the real activity starting next week.  All eyes will be on Consumer stocks earnings.  Nearly everyone is looking for the first signs that consumer spending is slowing.  Oh yes, the impeachment “wild card”; who knows?

What is of concern is that the price bars are hugging that upper trend channel line (purple).  The daily spread on those price bars are fairly narrow, indicating seller and buyers are about equal with the bias toward the buyer demand, thus prices increase.  Volume is back to “average”, so not much of a clue there.  (click on chart to enlarge for easy viewing)

Let’s look at the stocks in the broad S&P 1500 Index and see where they are in comparison to each other.

% of those in Accumulation / Distribution –% of those with Price Strength –

Yes, lots and lots of “green” in both pie charts.  The market IS strong with the majority of stocks participating in the move.  But (again) this is unusual in that it can not last for extended periods of time.  So, we must be careful.  Bad news of any kind will likely re-rail or at least  cause a cause / correction in this rally.  For now, we can only stay the course and closely monitor.  Looking for selling . . . .  wide range down bars on high volume.  Ouch !

Sector Strength –

That’s it for now.  Have a good week.   ………  Tom  ……..

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