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Market at Resistance Level=Caution April 17, 2021

Posted by Tom in Thoughts.
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April 16, 2021 – This will be a short and to the point post since the current trend continues (i.e. Bullish). But . . . two items to consider: First, we are now at the previous high and so the 14107 level becomes a point of price resistance. If prices move confidently above that level then we’ll have a better feeling that the trend higher continues. Note chart below.

click on chart to enlarge

Second, we are now beginning to hit the major portion of the first quarter earnings. As mentioned before, this market is “priced for perfection” and any significant disappointments in major companies will have an effect on the overall trend. So in both cases it’s a good idea to watch earnings news carefully over the following 2-3 weeks.

I am also concerned (just a little) that volume is lower and the Sentiment indicator (at the top of the chart) is mildly Bearish.

The Short Term Sector Strength table is shown below –

Of note is the recent strength in Healthcare and Utilities. Both could be considered as defensive sectors for mutual funds that are required to be 100% invested. I am 65 to 80% invested and I’m seeing fewer nice “breakout” candidates to spark new investment. Let’s see how the market react next week. Do they blow through resistance or back off? That will give us an idea about overall strength.

Take Care and have a good week. …………. Tom …………

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

Better, but Still a Volatile Market April 10, 2021

Posted by Tom in Thoughts.
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April 9, 2021 – This was a good week coming off of the Easter holiday, but there remains a few indications that this is (still) a volatile market. Case in point was on Friday; the indexes stayed flat for most of the day before finishing the last 45 minutes with a jump higher. Likely we’ll see more of this . . . in both directions.

click on chart to enlarge

And so the immediate trend is up: channel broken higher, Sentiment moderately Bullish as are the Volume and Money Flow indicators. The next level of resistance is the previous high at 14112 (NASDAQ Composite Index). One point to note is the low volume. The first quarter earnings season begins soon and the stock market is “priced for perfection”, any disappoint(s) could be hard on a Bull run. Let’s not get to euphoric just yet.

What we’re seeing now is strength in Large Cap growth stocks, primarily in Technology, Consumer and Industrial sectors. I’m a big fan of scaling into and out of positions to try and control risk. If next week continues to show strength I’ll add to my current positions but so far, so good.

Short Term Sector Strength –

What is interesting is that while some sectors are stronger than others, the strength in the market is fairly broad based. In order to do better than the Indexes, one has to be a good stock and/or sector picker.

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.

Hopeful Signs April 3, 2021

Posted by Tom in Thoughts.
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April 1, 2021 – First off “Happy Easter” to all that celebrate it. I hope that the bunny is good to you. 🙂

Spring is a season of hope and renewal and that’s what we might (just might) be seeing early signs of in the markets worldwide, but especially in the U.S. Looking at the chart below that are multiple indicators of returning strength of a Bullish trend.

click on chart to enlarge

The Market Sentiment is back to lightly Bullish as is Money and Volume Flow. Price Strength remains neutral but note the price bar color has returned to “green” and is above the near term price channel (purple lines). These are early signs of a return to a positive upward price trend. My only caveat is the low volume (lower bars on the chart), but hey, it was a holiday week so not a a big problem. We do need to see volume next week returning on up bars.

Stocks in the S&P 1500 Index –

The pie chart above shows just how broad the price strength is overall (1500 stocks). Again, early signs of a return to a positive market.

The jobs report was very positive and the vaccine roll out is very positive as well. Hopefully signs of renewal.

The table below shows the short term sector strength. Of note is the “Person Market” column which indicates the momentum of strength relative to the S&P 500 Index. ‘Outperforming’ and ‘Improving’ are early positive signs of strength. Also I note the re-strengthening of Technology sectors. Semiconductors are on fire.

I have started to “nibble” on select stocks and ETF’s and will increase positions next week as strength and volume return. “It” may not be over but “nobody rings a bell at the top” (or the bottom) so we need to be open to changes. My Moto is ‘scale in & scale out’; no need to be a hero. Right now I’m favoring “in”.

Have a good week & Take Care. ………. Tom ……….

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

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