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But Wait . . There’s More ! (?) January 20, 2018

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Jan. 19, 2018 – To borrow a phrase from American TV commercials (“But Wait, There’s More!).  A classical “come on” to grab your attention and lead up to a “call to action” (i.e. buying).  This market shows no signs of letting up, but we should keep an eye open for sector rotation.  Even though the indexes keep moving higher; is every sector participating?  And, for good measure, are international stocks doing even better? Ahh Ha, good questions.

Sentiment, Money Flow and Volume Flow all bullish; check.  Prices above the trend channel and above key support levels; check.  And so the trend continues . . .until it stops.  And there in lies the key.

The US markets are giddy about lower taxes and the re-patriotization of offshore funds.  OK, that will last until earnings don’t also increase.  The rest of the world is also recovering from a general world wide recession.  And that recovery may, just may be more stable and less driven by news.  Cases in point are Latin American countries (Brazil & Mexico) and Emerging Market countries in general (notably China).  Japan & Korea doing all right as well.

In the US the oil trade may be slowing, so I’m careful there.  Industrial and Consumer Services stocks along with select Tech stocks are strong.  So, it makes sense (to me) to be diversified among the strongest world sectors and keep an eye open for how the (US) markets react to “bad news”.  Whether it be a government shut down or new special council actions.  This market wants to go higher, but it does not want to lose much money.  I’d call it “impatient”.   If things don’t go well (go up), there will come a time to sell.

I’m “long” but careful to see how this market reacts to news since the economics are a tail wind for the time being.  News is important right now.  Have a good week.  ….  Tom  ….

Price chart by MetaStock. 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 Taxing Situation December 16, 2017

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12-15-2017 –  No doubt about it . . . the stock market likes money and when they’re pretty sure that more is coming their way . . they get happy and drive prices higher.  Volume was dropping off (until Friday’s options expiration), so we’ll have to wait until next week to see the tax approval drama prove out and see if the market reacts with higher prices on higher volume.

I do want to see volume confirm price (ease of movement= price and effort = volume) in order not to get concerned about a possible Up Thrust After Distribution structure.  Likely, that won’t happen, at least not yet anyway.

The 6668 level remains my support level.  One thing concerns me is the Money Flow indicator; it’s falling.  Other than that, all “systems” remain bullish and I remain (nearly) fully invested.  Volume will typically drop off between Christmas and New Years and attentions divert to the holidays.  We may have to wait until the new year (and new tax basis ?) to see just how strong the underlying market really is.  But for the time being . . . “no worries”.

Here’s a table of short term sector strength –

Wishing you & your family a very Merry Christmas.    ………… Tom  ……….

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

Maintaining the Up Channel December 3, 2017

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Dec. 1, 2017 – The (US) markets continued to stay in the “Short Term Channel” (purple lines) which is pointed up.  On Friday prices briefly touched to bottom channel line on the Flynn guilty news, but responded to the tax bill passage news.  

The year end period is typically bullish, but we do see signs that negative news will trigger selling.  Now that the tax cuts are passed and the “big rollers” can look forward to lower taxes next year, it will be interesting to see the reaction in January, 2018.  For now I’m watching the 6668 level on the NASDAQ Composite Index as a first line of price support (blue line).

Not much to say except it looks like money is flowing out of Tech (especially Semiconductors) and into Banks and Finance.  Emerging Markets are erratic and Europe “ho-hum”.  My sector strength table is below (short term strength).

That’s about it.  Have a good week.        …………  Tom  …………

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

Market Chugs Upward on Lower Volume November 18, 2017

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11-17, 2017 – After a major move to a new house and the major unpacking that goes along with it, I’m slowly approaching “normal”.  I wanted to talk about market “breath” (a.k.a. the number of stocks actually participating in a trend), but that will have to wait.  In any case, the market just keeps going higher.  One thing I do note is that the volume of stocks going up vs. those going down has slacked off.  That indicates a pause more than likely.  Also to note is that we’re heading into the holiday season where volume in general typically falls off.  No alarms, but something to watch.

I’ve moved the support levels up this week (based on the low of a strong weekly bar).  The logic is that a strong weekly “up bar” low price is where the buying started and hence a “commitment to buying” / Accumulation, thus strength & support.  On the NASDAQ Composite Index the first level is now 6668, then 6518.  If these levels get broken on a close, I get very concerned.  Last point; Friday was options expiration and that brought low volume (a little unusual).

Let’s look at the stocks in the broad S&P 1500 Index as a clue to overall market health.

% of Stocks Showing Strength:

% of Stocks in Accumulation or Distribution:

Nothing to get concerned about right now as there isn’t an over bearing amount in one category or another.  Though I should note that these are “slow” indicators and thus are more useful for significant moves and not minor corrections.

I am seeing some weakness in previous market sector leaders such as Semiconductors & Technology and some strength in more defensive sectors as Real Estate and Utilities.  Nothing major as it could be more of a pause, but since I am in these areas I’m paying close attention to them.

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.

 

Continuation Up November 12, 2017

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Nov. 10, 2017 – A busy weekend and weekend for me so I’ll get right to it.  Yes, the trend higher continues.  A quick look at the chart below shows Market Sentiment neutral and the remaining indicators Bullish.  Prices remain at the top of the price channel . . rather “nose bleed” levels, with support at the 6517 level on the NASDAQ Composite Index.

Tax “reform” may be driving this market higher and that may or may not come to pass without “issues”.  Semiconductors, Technology, Japan are leading sectors.  I note that Real Estate and Utilities (defensive plays) have quietly moved up in strength.  The breath of this market does seem to be narrowing with less and less number of stocks driving higher.  That is something to watch as overall volume is dropping.

For now, we can’t “fight the tape”; higher is higher.  Have a good week.           ………….  Tom  ………..

Trend Up Continues November 5, 2017

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Nov. 3, 2017 – The trend higher continues, though looking at the “Money Flow” indicator (top pane), the flow of capital into this market is slowing.  The big leaders are technology, with semiconductors in the fore front of the pack.

The support level for the NASDAQ Composite Index is 6517, the last swing low point.  Whether the idea of a big tax cut for corporations is driving this market or not is somewhat moot.  It just continues to go higher.  I remain concerned about prices hugging the upper trend channel line (blue dashed lines), but we “can’t fight the tape” right now.

Looking at the stocks in the broad S&P 1500 Index below we see a fairly balanced situation for the market as a whole.

Price Strength –

Stocks in Accumulation or Distribution –

Sectors I like are: Japan, Semiconductors, Technology, (short) Latin America, Banks, Basic Materials.

That’s it for this week.  Watch the news carefully in case the Trump Tax plan falls apart; that could be a game changer.   ……..  Tom  ….

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  ………………

Up Trend Continues October 21, 2017

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Oct. 20, 2017 – The chart below clearly shows tht this up trend is intact.  Sentiment, Money Flow and Volume Flow remain bullish.  Prices remain in this upward trend channel, though at the top of that channel.  Risk for a correction down to  at least the lower trend channel is high and logical.  This market is optimistic and over bought.

But, it can still go higher.  I always have to remind folks that correction begin at “all time highs”, not at “all time lows”.  I think it’s wise to be “cautious” at the same time as being fully invested.  It just makes good sense.  Here’s a few sectors that I like and are showing strength in this environment:

That’s it for now. With modest volume and prices at the top, folks are buying, but not “hand over fist”.  Optimistic, yes . . . . but let’s not be blind to what potential is out there.  Have a good week.     …….  Tom  ……..

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