jump to navigation

Market Treading Water March 2, 2019

Posted by Tom in Thoughts.
Tags: , ,
add a comment

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.

Resistance in an Up Trend = a Close Watch February 17, 2019

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Feb. 15, 2019 – OK, this is sounding like a broken record but the (US) market remains in an upward, bullish trend.  My concern is that over the last 3 days the price action has yielded narrow range bars.  This accentually shows that buying and selling are about equal with no “winners”.  The volume on these bars is just a little above average but not much.  If we saw higher volume I would be much more concerned.  Perhaps traders didn’t want to hold anything over the long weekend (Monday is a US financial holiday).

The bottom line is while we’re concerned, we must / should remain invested for the time being.  The major concern is that a major news item will come out of the blue and drive this market down 10% in a matter of hours.  It could happen; right now it’s just a concern.  Also we’re just at a resistance point of 7486 on the NASDAQ Composite Index (green dashed line).  Perhaps a likely spot to pause or ?

There’s been some sector rotation going on with Energy & Services and Healthcare moving up while Internet and Real Estate are moving down.  Again, I point out that the table below is momentum and volume driven in the short term, and thus changes rather quickly.

That’s about it, “short and sweet”.  Staying the course with a close eye on price action / reaction.  Have a good week.   ………..  Tom  ……….

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

 

A Minor Pause February 10, 2019

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Feb. 8, 2019 – This week we saw a minor pause in this steady advance; that is expected and overdue.  Though one may think of this as an Upthrust (of price) I really doubt it due to the lack of volume.  In fact the volume this past week was generally edging lower.  It just looks like any future buyers are just waiting.

This pause around the 7485 level (dashed green line) is a logically place to rest at.  An oscillation of prices between 6930 and 7485 would be rather “normal” if it comes to pass.  Everything else appears fairly positive for the time being.  One chart I found of interest was the amount of funds withdrawn from mutual funds in December (chart below).Once again the casual investor just does not like volatility and their market timing is pretty poor.  That withdrawn money represents “new money” that has potential for driving price up once it decides to come back in.  As the old saying goes “The market will continue to go higher until the last person buys it”, or something like that.  No doubt that we live in volatile times and the computer trading programs seem to amplify any move even more.

A quick look at the short term sector strength table below:

I’m trying to stay in the leaders by avoiding the lower (red) percentile sectors.  Again, this is short term so a fall from the top rank is not necessarily a terrible thing since it can be just a pause and the raw score may indicate a minor move anyway.  Not much else to say.  I remain very near fully invested with many stocks in those strong sectors.

Have a good week.     ………. Tom  ……….

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

Signs of a Pause February 2, 2019

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Feb. 1, 2019 – While the overall trend of this market remains up, by mid week there were some signs starting to show themselves of a possible weakening of momentum.  In my more complex market model I got a “Caution – Move to Cash” signal that continued into Thursday but never triggered into an position change.  This model is fairly sensitive so not every “Caution” gets confirmed, but the case remains that momentum could very likely be changing.  Bar Strength has dropped and Fridays bar spread (the price difference between the high & low) was very narrow.  Narrow bars show that selling and buying are about equal and after a nice run up that could mean a pull back.

The chart above does show current prices at / near the 7225 resistance level so let’s keep an eye out next week for some type of pull back / pause; it’s overdue anyway.  A look at the number of stocks in the S&P 1500 Index that are in Accumulation / Distribution is shown below.  Very strong indeed.

Also the number of stocks that are showing strong Price Strength is equally impressive.

With so much “green” a pause or minor correction would be normal.  For this reason I’m a little hesitate to add any more positions right now.  I’d like to see what this market does in the next 2-3 days first.  We are starting to wrap up the earnings season now and the results have been generally OK with a few surprises.

Here’s a look at what Industry Sectors are strongest in the relative short term:
I’m about 75% invested right now, waiting to complete re-accumulation, but watchful in the near term.  Have a good week.  ……  Tom  ……

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

Steady As She Goes, but On Watch January 26, 2019

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Jan. 25, 2019 – It’s sounding “old” but so far there’s no real indication of major market issues and so the phrase “Steady As She Goes” sounds appropriate.  Prices have recovered a lot and very quickly so some pause or minor correction is not out of the question.  Prices on the NASDAQ Composite Index closed Friday very near our 7225 resistance level (green) and this would be a “logical level” for that hesitation to begin, but nothing is a given at this point.

This market seems to shrug off most news events.  The one thing that could trigger a major move (in either direction) would be trade talk results with China.  Domestic politics and Brexit don’t seem to matter much.  Interesting that these have been discounted.  Sentiment, Money & Volume Flows are all positive and Price Strength is strong.  I am selectively long, picking stocks and sectors that appear to provide opportunity and that have not got ahead of themselves.

My new sector strength table is shown below.  Technology and Financial sectors are showing strength in the short term.  Mid-Cap indexes are also doing well.

And so it goes.  We just have to go with this trend and so far this trend continues to be up, though I’m pretty uneasy about it.  Have a good week.  ………..  Tom  ……….

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

t

Market Continues Higher January 19, 2019

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Jan. 18, 2019 – My first level of price resistance at 6930 was blown through, but the next level at 7225 is not far away.  Earnings coming out are mixed, some good and others rather poor.  This rally seems to be a “Fear of Missing Out” rally which is typical after the severe oversold condition on Christmas eve.  Money & Volume Flow indicators are positive as is Market Sentiment.  At least a minor pullback is overdue and that will give us an idea if the “smart money” is trying to get whole from the late Fall market correction, or if it is just a pause that refreshes a re-accumulation phase.  The key will be volume.  Light to average volume on a sell off means it will be shallow and short lived.  Heavy volume = heavy selling and the recent lows could be re-tested.

For now we just have to ride this trend and in the immediate term the trend is higher.

The table below is different.  I’ve changed it to condense the sectors but also to add the indexes and some key international market indexes.  I’m thinking that this simplifies things while broadening the scope to international sectors.  The idea is to make this more meaningful and “actionable”.  Comments are Welcome.

That’s it for now.  I’ve got a feeling that the first quarter will be a bumpy ride, since there is so much undecided that could have a major effect on the markets.  Have a good week.       ………….  Tom  …………

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

At The Point (level) . . . . January 12, 2019

Posted by Tom in Thoughts.
Tags: , ,
add a comment

Jan. 10, 2019 – The market (NASDAQ Composite Index) has risen to the level (6930) where we likely will see at least a pause if not a rejection on the move.  This is the level on a weekly time frame where we last saw selling / weakness come into the market.  The short name is price resistance.  It will either break through and go higher after a short pause or selling will enter and the price will retreat.  (OK, no kidding.)  So our attention has increased looking for signs.

One thing I note on the volume bars below the price bars is a steady drop off in volume.  I can make a case for “No Demand” and in that situation, without buyer, prices will fall back towards support.  The yellow Zig-Zag line paints that scenario  of a back and forth structure that stays in a trading range.  I think that’s what will happen.  If I’m wrong an the market takes off the dashed green line shows a break of resistance with prices headed back toward 7500.  We shouldn’t have to wait very long to see which story plays out.  In any case this market is being whipped around by news and fear; not a sign of strength.

The overall market of stocks in the S&P 1500 has improved.  Price Strength (below) shows most stocks moving above their 20 day moving average.  With a lot of green showing and very little red; bullish in the short run.

The pie chart of the same 1500 stocks paints a more cautious picture.  Fewer stocks are in the Accumulation phase (strong price AND volume).

I refer again to the volume coming into this market during the past couple of weeks.  Many investors will be watching for more participation before committing more funds and buying more stock; I think that’s what we’re seeing right now.  Wyckoff price structure would say that we’re in a base building / Re-Accumulation phase before going higher.  That can always change to a re-Distribution phase IF the market breaks below 6130 for any length on time, especially on high volume.  A “Constitutional Crisis” could provide that scenario.  And that is likely why the interest / volume is low right now . . .  wait & see.

I am “lightly long” right now, unwilling to jump back in with both feet.  Have a good week.   ……….  Tom  ……….

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

Expecting a Bounce Higher, then . . . December 23, 2018

Posted by Tom in Thoughts.
Tags: , ,
add a comment

Dec. 21, 2018 – First off let me wish everyone a Merry Christmas (for those that celebrate it of course).  Next week will be a slow trading session so I’m hesitate to read much into price and volume indicators.  Let’s start by looking at a bigger picture for perspective, namely the NASDAQ Composite Index on a weekly bar time frame, back 3+ years.
We’re currently back to the Fall of 2017 price levels . . . . yes, the “Trump Bump” has been wiped out.  Support at the 6375 level has been hit and the next level down is about 5425.  But I don’t expect this market to get there in a straight (falling) line.  Let’s switch back to a daily chart.

This market is extremely “over sold” in that it went down too much, too fast.  A possible scenario is a short continuation sell off on Monday (12-24-18) then a bounce back up to about the 7000 level before heading back toward a new low at 6375’ish level.  During any rally higher we’ll watch the price action and us volume to confirm it.  The tricky part is the volume analysis during a holiday period.  The bottom line is: are traders and institutions using a rally to lighten up even more by selling into a rally.  The news is not great world wide and any match toward the powder keg could mess things up without warning.  This is NOT a time to buy and forget; wait for a confirmation of a new trend because this one is lower.

A quick look at what a bear market looks like (% of stocks in the S&P 1500 Index):

Price Strength –

Accumulation / Distribution –

The lack of green in these pie charts is not an error, there is very little to see.

There really is no need to talk about sector strength because there is very little.  Think “Defensive” (Utilities, short term Bonds) and you’ve got it.  If you must expand that add Real Estate and Aerospace (military wise) to the short list.  I’m heavy in Cash and net short the indexes.  Looking for a “sign” if & when we get a rally.  Have a good holiday.          ………….  Tom  …………

Within The Range December 15, 2018

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Dec. 14, 2018 –  I’ve removed a few lines on the NASDAQ Composite Index chart this week, kind of getting back to basics, to make a point.  First this market structure is pretty much in a defined trading range. At the top is the 7520 green dashed line and at the lower edge is 6920 with the red dashed line.  Now these levels are not chiseled in stone but rather rough benchmarks to alert us when there is a change of character in either direction.

Also I note that the last 3 days of this past week have had volume falling off; Low Demand to Buy and Low Supply to Sell = lower prices on low volume.  For the time being that shows there is no rush for the exits, but also no rush to get onboard either.  The typical scenario for a trading range.  It just feels like everyone is waiting for either some news (trade talks or BREXIT) or for the end of the year.  The price levels that we’re at go back to February of this year . . . . we’ve lost the “Trump Bump” as reality sets in.  Reality is that stocks were expensive and the sugar high of corporate tax cuts have worn off.  It’s back to “what have you done lately!”.

The pie chart below is a new idea.  I took the stocks in the broad S&P 1500 Index that were within 5% of there 52 week high price.  Then put them in a pie chart by their industry groups / sectors.  You can follow the list down by going counter clockwise around the chart.

No surprise that Utilities, Real Estate and Consumer Products are holding up better than other sectors.  Another way to look at this is via my regular table which is ranking sector by there short term strength.  This style ranking will be valuable when an up trend develops, but for now it sure looks like being defensive or in Cash is a good idea.

The best news is that Christmas is coming, no matter what !  🙂  Have a good week.     ……….. Tom  ………..

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

 

Back to the Trading Range December 8, 2018

Posted by Tom in Thoughts.
Tags: , , ,
add a comment

Dec. 7, 2018 – Wow what a week.  Even though the markets in the US were only open for 4 days (because of the Bush funeral) there was volatility galore.  This market appears to be settling in a trading range between 7520 and 7000 on the NASDAQ Composite Index (see chart below).

Both the long and short term channels are pointing lower but they are beginning to flatten out.   I know many people feel strongly that the markets will either go up or down a fair amount before the end of the year, but what they may be missing is that we just remain within this basic base building range until some economic news sends the markets in some other direction.  I note that Market Sentiment (top window), Money & Volume Flows are Bearish.  Price Strength is Neutral.  Actually, this rather supports a trading range theory.

Looking at the stocks in the very broad S&P 1500 Index –

Accumulation / Distribution:Far more stocks in Distribution, but about equal to those in Accumulation & Neutral.  OK, weak but not terrible.

Price Strength:Here is where we note a strong bias toward weakness in price.  No surprise since this market has fallen a bit since it’s highs.  Bottom line: yes prices have fallen, but we’re not seeing a major rush to sell and get out of the market (i.e. not a major Distribution . .  at least not yet).

Stocks that are holding there own in the sectors of Utilities, Real Estate, Consumer Staples and (even) Gold Miners.  These are all defensive sectors to hide out in IF you must be invested.  Right now I’m heavy in Cash (still) and have a small “hedge on” via a Bear fund as “insurance”.  No need to be heroic here since there is no clear path in either direction.

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

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

%d bloggers like this: