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Roll’in . . Roll’in . . . Roll’in January 12, 2018

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Jan 12, 2018 – This market just keeps “Roll’in (Down The River”; pardon to CCR).  But, this too will end.  Why am I so dog gone concerned?  Here’s a chart of longest periods without at least a 5% correction.  We’re waaay up there as the third longest period.

OK, that doesn’t “prove” anything but it does show that this move, for this long, IS unusual.  And that is one of the big reasons why I keep a close eye for a possible correction.  Maybe not a bear market, but at least a meaningful correction.  With extra “income” coming to corporations in the form for lower taxes, this market is in love with stocks.  And that could continue for a while.

Is this market over bought and over optimistic?  The price chart below shows the number of stocks in the S&P 1500 index that have strong, neutral or weak near term price action.

What I think is more typical “healthy” is an even split between strong, neutral and weak.  That shows balance and not euphoria.  Waaay to much “green” up there for my liking of a stable market.  Next are the number of stocks in Accumulation (buying), Neutral and Distribution (selling).

The same thing goes here though not quite the unbalance as was in the price strength.  In short, the market is getting ahead of itself and pricing in all of that good news.  We’re in the earnings reporting season and all eyes (ears) will be on forward guidance.  Expectations and fear drive a market and right now they are excepting a lot of good news.

For now I have moved the initial support level up to 7111 on the NASDAQ Composite Index.  All primary indicators are positive / Bullish but the price is above the upper channel line; again, over bought.

This can go on for quite awhile, so I remain invested and in this market.  Strength is in the Oil and Emerging Market sectors, followed by Industrials and Basic Materials.  Take Care and have a good week.        …………….. Tom  …………..

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

New Year – New High January 7, 2018

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Jan. 5, 2018 –  Happy New to all.  Well we didn’t have to wait very long in the new year to see if tax selling at a lower rate would influence the market.  It didn’t.  The broad NASDAQ Composite Index (below) just kept on moving higher, and is now in a rather “over bought” condition (that being above the upper price channel).

I’ve raised the support levels to 6924 and 6668 based on the lows of significant weekly bars.  This is where buying come in and thus a violation of the lows of those strong bars could be a sign of a change of character.  So far the sellers are holding and everyone else is buying.  So be it.  The Money Flow indicator has kicked up after registering the low holiday volume and reverting toward a neutral (zero) reading.  Volume flow and Market Sentiment remain positive.

Not much more to say except the Up Thrust that I was concerned about does not appear to be forming; I’ll likely drop the tentative label next week.  This is looking more like continuation.  Other than that, here is a list of short term sector strength.

This is generally where I like to position my stock holding.  I remain fully invested for the time being.  Have a good week.   ……..  Tom  …….

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

No “Santa Clause Rally” December 30, 2017

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Dec. 29, 2017 – Well it’s been an interesting year.  Sure this market has been very “kind & understanding”, but what drives prices higher is earnings (or at least the hope for future earnings).  The U.S. tax plan has past and it remains to be seen exactly what companies will do with that extra money.  With unemployment in the U.S. are near all time lows, I doubt if much added hiring will occur.  The last time this type of tax abatement happened corporations bought back their own stock or issued special one time dividends.  Either of those should drive prices higher.  We’ll see.

In the mean time prices continue to remain within the upward sloping price channel.  But as I note in the headline, index prices have really not done much in December.  While Sentiment and Volume Flow remain Bullish, the Money Flow indicator has dropped to a negative reading.  Now volume is typically light during the holiday period, but this is something to be aware of.  Also, I show you the chart below (the last 6 days; 10 minute bars) of the significant selling that came in during the last 20 minutes of 2017 on Friday.

Look at that volume spike.  I’m considering this to be an Up Thrust in the immediate term.  We’ll see if that selling continues after Jan.1, 2018.  This market is due for a correction from an historical perspective.  In the mean time I’ll show the pie charts of the stocks in the S&P 1500 Index.

# of Stocks in Accumulation / Distribution –

# of Stocks with Strong / Weak Price Strength –

So far, a fairly even split in healthy to unhealthy stocks, and that supports a continuation of the current trend (higher).  But let’s watch to see if tax selling comes in during January.

Oil & Oil Equipment, Latin America, Precious Metals and Basic Material sectors are in the lead for short term performance  The entire Tech sector is struggling right now.

That’s it for this year.  I wish you & your family a very Happy & Prosperous New Year !   ………  Tom  ……..

Charts by MetaStock & Worden bros. / TC200, pie charts by http://www.HighGrowthStock.com. All used with permission.

A Cautious Bounce December 8, 2017

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Dec. 12, 2017 – This week we saw the market revert back to the lower short term price channel (purple line) but remain well within the long term channel (dashed gray line).  OK, a bit of a pull back, and that’s to be expected after a very steady run higher.  But I do note a drop off in Money Flow and Volume Flow indicators.

Two possibilities: 1) volume dropping due to a lack of buyers, and also sellers, or 2) lack of demand to buy.  We’ll have to wait until next week to see if prices recover and exactly what volume does.  I’ve VERY cautiously labeled the peak as a Buying Climax and the swing lower an Automatic Reaction.  Are they really?  We’ll have to wait a few days to see IF there is the follow through necessary to confirm a Distribution price structure.  My feeling is likely not a significant top in the market just yet, but I’m always looking for a trend change.

The 6668 price level (blue line) would also help confirm any weakness, so I’ll watch that as well.  Until then, I remain invested and monitoring sector rotation.  Right now Financials, Telecom, Industrials, Banks and Consumer Goods & Services are strong.  Sure, some of this is seasonal, but “money goes where it’s treated best.”  Real Estate, Gold and Semiconductors are now some of the weakest sectors.  (That happened quickly!)

So the market is strong right now and the pie charts show the percent of stocks in the broad S&P 1500 Index confirm that.

Price Strength:

Accumulation (buying) / Distribution (selling):That’s about it for now.  Time to watch the reaction / bounce strength and be just a shade on the cautious side.  Have a good week.    ….. Tom ….

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

“Same Old” Up Trend November 26, 2017

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11-24-17 – Really . . . not much new here, just the “same old up trend”.  I’ve added the ‘short term” trend channel to the chart below (blue lines). We quick note that the price action is above the long tern channel (purple dashed) and at the top of the short term channel.  Money & Volume Flow indicators are bullish and strong.

Volume dropped off during the past holiday week (in the US) so we’ll wait to see what next week brings as far as activity.  I’m still looking for an Up Thrust in price on low volume, but so far not seeing it.  Prices are extended to the up side and nearly everyone is bullish waiting for the famous “Santa Clause Rally” into year end.

The table below shows where the short term strength is right now.

There’s not much choice except to remain invested for now, but extended prices always concern me . . . .  that’s where the risk is.

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

Chart by MetaStock; table by http://www.HighGrowthInvestor.com.  Used with permission.

The Up Trend Continues October 29, 2017

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Oct. 27, 2017 – This market continues to surprise just about everyone.  Friday’s spirt higher was on the back of great earnings reports by nearly every major tech company.  And so it goes.

But I do note that Sentiment is “Neutral” and Money Flow is slowly weakening.  The real question (remains) just how broad price advances will be; that is, are only a small number of stocks pushing the indexes higher, or is everyone contributing?

I’ve moved up critical suppose price levels for the NASDAQ Composite Index on the chart.  These are important weekly price levels, so breaking them will indicate problems in the market.

The table below shows where this strength is coming from:

Busy weekend, so have to go.  I’m invested and pleased with the results, but cautious about how euphoric investors have become.  A little disappointment may have a big effect on this market.  Since prices are at the top of the trend channel I become more cautious.

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

Market in Consolidation September 30, 2017

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Sept. 29, 2017 – Uber busy (again), so I’ll get to the point(s).  This market sure appears to be in a consolidation / re-accumulation phase.  Yes, I know I labeled the chart as Distribution, but I tend to always be on the lookout for a worse case scenario.  The BC (buying climax) was weak and the UTAD (up thrust after distribution) has yet to even form.  But . .  . went I see market trends begin to soften, I get extra cautious.

The chart above does show strength, or at least a continuation of the last up trend.   We may be beginning a break out to the horizontal channel that started in mid-July, but that’s just a “maybe” for now.  Money Flow, Volume Flow and Sentiment are good, so let’s be patient here.

The pie chart above shows the % of stocks that are considered “Strong” or “Weak” based on their 20 day moving average.  There’s a lot of green up there, which means that most stocks are at least participating in the current up trend, even though it may be a mild trend.

The table above shows us where the current short term strength is.  Ideally, this is where we should be holding our “long” positions.  I hope this quick analysis helps.  Hopefully I’ll have more time later, though that might be a few weeks from now.

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

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

Expected Decline; Time to Be Careful August 11, 2017

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Aug. 11, 2017 – OK, we’ve had a quick drop but only a minor one so far.  Our first support level of 6303 on the NASDAQ Composite Index was broken on the close on Thursday.  That gets our attention.  But . . . notice how “average” the volume was (lower pane) and then on Friday (8-11-17) volume dropped off even more.  Obviously we’re not seeing panic selling or a mad rush to the doors.  And this was on a Friday (before a weekend); traders were rather comfortable holding on to stocks over the weekend.

Where we’ll get much more concerned is if prices breaking the 641 level on a close and / or volume picking up on a wide spread down bar.  Then it’s time to hedge or sell.  For now I’ve just lightened up a little on holdings, paying more attention to weaker things that I hold.  Not surprising that Market Sentiment (top pane) and Volume Flow are negative.  Money Flow has turned down but remains above zero.  This confirms a lack of buyers, but not significant selling for the time being.

The number of stocks making up the S&P 1500 Index that are in Accumulation and Distribution (below) shows a fairly even split.  Again, not large amounts of selling at this time.

The Price Strength (below) shows a different picture, but confirms the idea that the weakness is caused by the lack of buyers.  If there are more sellers than buyers, prices will drop.  The amount of Red that we see far exceeds the green.  Prices are generally weak.

Looking at sector strength we see more defensive stock sectors moving to the top of the list, while previous leaders (technology based) have moved lower.  Since the general feeling is that stocks are over priced based on good earnings, but not great, this is likely a typical pause for re-accumulation of shares at a lower price.

Let’s hope that the conflict with North Korea is only an excuse to have a minor correction.  Speaking of sector strength, it appears that International stocks are fairing a little better right now.  I have cut back on % amounts to hold, but China, Latin America and Emerging Markets in general are looking to hold up rather well after making significant gains recently.

That’s all for now.  Watch that 6141 level and signs of volume increasing on any down days.  Otherwise, we’ll be patient and wait for a better time to redeploy our Cash.  Have a good week.     ……….  Tom  ……….

Chart by MetaStock; pie charts & table by http://www.HighGrowthStock.com; used with permission.

Market Holding, but Showing Signs August 5, 2017

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Aug. 4, 2017 – A quick look at the chart below shows the NASDAQ Composite Index holding on to the first support level at 6303, but a close look “under the hood” shows a market that is slowing down, if not weakening.  What would concern me more would be a close below the next level at 6141.

Note how Sentiment (top) has turned neutral and both Money Flow & Volume Flow are fairly lethargic.  I my opinion this is likely just a pause, but if either Trump or the North Koreans do something “dumb” it could turn out to be a significant correction quickly.  The momentum has definitely slowed significantly.  The word now is to honor your stops if whatever your holding shows excessive weakness.

One other item that may be of concern is the number of more defensive sectors that are showing leadership in this market.  You can see this in the table below, as the past “darlings” (technology, semiconductors, biotech) are not near the top of this list.  That could be an indication that money is flowing to more conservative sectors to ride out a brewing storm.  Let’s keep an eye on this for a few more days before we jump to any conclusions though.

That’s it for this mid-summer market.  Let me know via a post to this blog if there is anything you’d like to see me cover of review (except specific stocks).  Thanks and have a good week.     ………….  Tom  ……………

Chart by MetaStock; table by http://www.HighGrowthStock.com.  Used with permission.

Still Within (trading) Range; Sans Volume July 15, 2017

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July 14, 2017 – Listening to the financial media one would think that “Happy Days” are here again; and the markets have recovered from a small swoon.  But with all of the talk about “new highs” we should consider that we are really only returning to the top of a trading range.

We bounced off the 6097 support level and we’re now just about near the previous peak (dashed purple line).  One thing I note is the steady lowering of volume over the past week (lower arrow). Also “market Sentiment” is bouncing between neutral and Bearish.  OK, up is up and the previous leaders (tech, semiconductors, biotech, etc.)  are once again doing well.  Maybe the lack of volume / interest is due to the summer vacation schedule, but maybe it could be lack of commitment.  That lack of commitment could be forming an Up Thrust.  We’ll just have to wait and see next week.

For now I’ve removed my hedge (protection) but have not jumped back to a market “long” status.  The market is showing some positives as shown below; the % of stocks in the S&P 1500 Index that are being bought/sold, with price strength strong/weak.

S&P 1500 Accumulation & Distribution –

S&P 1500 Price Strength –

Overall these pie charts are showing a reasonable balance between the three status levels, and that’s usually a healthy sign.  Looking at a sector strength table below:

I also should mention that a few Emerging Market countries are doing well in the recovery.  Since we are in the middle of earnings reporting, the market could easily react to unexpected bad news about key industry companies as well as any geo-political news.  With Russia and Healthcare being major topics, that could be a factor.  I feel that in order to decisively break above the previous high, we’ll need to see volume (buying) increase too.  Without that I’m still cautious.

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

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

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