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Lethargic Market October 24, 2020

Posted by Tom in Thoughts.
Tags: , ,

Oct. 23, 2020 – This market just seems to be waiting for something to happen; stimulus, election, earnings, pandemic . . . . et al. Volume is down, Money Flow and Volume Flow are lethargic and prices don’t want to really trend in either direction. Indecision. It just seems like there is enough potential good news to maybe (just maybe) outweigh the bad, but maybe not.

click to enlarge

The upward trend channel (purple lines) have been broken, the bars are now colored red so that upward trend is no longer in play. But a downward trend has not really started either; we’re in a broad trading range for the time being. My other master indicators show the Accumulation of shares has slowed, but Distribution has not really taken off either, prices are not strong, but they’re not very weak either. What to do? Maybe nothing. I am about 75% invested but I’m having a hard time finding good places to deploy the other 25% . . . . and I’m get more concerned about the potential for loosing hard fought gains in a blink of an eye with the release of bad news. Thus, this market is not strong and can’t determine which way to go. Earnings continue to be reported and they are mixed at best. As mentioned before this market is “not cheap” earnings wise, which leaves it susceptible to a correction.

Other factors: I run a program which ranks major sub-sectors by strength but also internals (like volume / demand, number of stocks in the subsector advancing, etc.) and usually I filter out about 3 to 10 (out of 48) that have strong stock candidates. This week (again) I found none. Lethargic market.

Here’s a pie chart of major sectors and what they did as a whole last week:

click to enlarge

OK not bad, more green than red but in a number of cases only a few stocks in those sectors were actually strong. Also 5 days does not a trend make.

Here’s another view with a little broad time frame and factors other than price:

I note that the previous market leaders, those technology based, have fallen. The prices of tech has proceeded their value in many cases. There is reluctance to pour more money into those areas without some justification. Keep an eye on earnings.

That does it for now. Take Care, and for those in the USA . . VOTE !

………. Tom ……….

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


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