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Steady but Indecisive June 24, 2017

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June 23, 2017 – OK, the trend remains positive / Bullish but if you look at the recent rally, it was pretty tepid at best.  I point out the “Volume Flow” indicator below which rather well points out the lack of enthusisium in this recovery off a minor bottom.

NASDAQ

Yes, the support levels (first at 6164) and trend lines are hanging in there and we may just be seeing the infamous “Summer Doldrums” setting.  My feeling is that we’re going to be in a consolidation phase until the Fall, but that’s just a hunch.

Editorial: I’ve updated to the latest version of MetaStock, so this chart looks a little different, plus I’ve added my bar strength indicator to the color of each daily bar.  This should provide a little more “heads up” information in the future.

From the pie charts below of the stock components of the S&P 1500 Index we note a healthy but yet “OK” market in the longer term.

Price Strength –

SP 1500 Price Strength

Accumulation / Distribution –

SP 1500 A-D

Overall things are looking OK even though the previous mass buying surge that we have seen after the November election has subsided.  What has appeared over the last week to 10 days is a rolling over of key sectors.

Sectors

The Tech, Semiconductor, Software strength remains, though lessened.  It has been supplanted by Biotech and Healthcare (note above table of current sector strength).

Where we are now is a generally supportive market, but leadership may be changing and actually narrowing.  I remain watchful of an Up Thrust bar on heavy volume as a near term warning sign of weakness.  But for now we have to “go with the flow” (i.e. trend).

Have a good week and we rolling into summer at full strength.   ….  Tom  ….

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

At The (lower) Edge June 17, 2017

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June 16, 2017 – An interesting week indeed.  Looking at the chart of the broad NASDAQ Composite Index below, we see that we’re still (barely) within the upward sloping price channel and, also above the first price support of 6164.   (Note: I look for a break of any line or level by the Closing price as opposed to the low of the day.)

The Volume Flow indicator continues to show weakness, though it is traveling in a horizontal position.  Money flow showed an up tick this weak and overall Market Sentiment is neutral.  Volume on Friday was high, but that’s typical for the 3rd Friday of the month due to options expiration and folks “squaring up” their expiring positions.

Holding the 6164 level and going into a trading range for this summer is a likely scenario.  The axiom “Sell in May & go away” could very well hold true this year.  There’s been a bunch of talk about a rotation out of Tech & Semiconductors and into Banks & Finance.  I see some evidence of that, particularly in Banks, but so far it’s been fairly muted.  Not much sense in talking about “strong sectors” since not much is showing domination right now.

I’m thinking we’ll just have to wait for the second quarter earnings to drive the markets anywhere this summer, or maybe a political issue will drive it.  Whatever it is, it will likely be a surprise and this market is on edge right now.  Have a good week.     ……… Tom ……..

chart by MetaStock; used with permission.

Steady As She Goes June 10, 2017

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June 9, 2017 – This will be short because really . . . not much has changed.  Yes, the market did drop quickly and significantly on Friday afternoon, but by the close a good bit of it was recovered.  I think the question is not “is this the top of the market” but more like “are the big guys rotating out of Tech and into something else” (like Financials)?  There are a few reasons why I believe this, but note that while the major indexes did drop, the Russell 2000 (small cap) index hit a high.  The vast majority of the time the small caps will lead the markets down as investors exit the more speculative small cap stocks.

Also, note that price still remain in the upward price channel and still above the most recent support level.  What caused this sudden drop is anyone’s guess, but the quickness and volume point toward computer algorithms and not just humans.  Once the “algos” kick in and start moving prices resting stops (all ready in the market) are taken out, thus the move increases in strength.  We should know early next week if there is real cause for concern.  In the grand scheme, the market was over bought, that is it was at the top end of that price channel.  Correcting back down toward the lower edge is typical.  I’d wait until Monday afternoon though, as the weekend investors may panic and sell out on Monday morning.  That’s how money is made on Wall Street: buy at wholesale and sell at retail.

For the time being (subject to immediate change) I’ll stick with Semiconductors, China Utilities and Consumer Goods.  Have a good week.  … Tom …

 

Not Out of the Woods May 21, 2017

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May 19, 2017 – Despite the rally (attempt) from the recent sell off, the market internals remain “iffy” and not broadly strong.  As shown below, we did just touch the lower channel / trend line as a Secondary Test before a recovery, but participation in that rally has been modest at best.  Sentiment is neutral and Money Flow is lower; volume is lethargic.

This does not mean ‘sell’ because we’re still in the upward channel and above support levels (5970), but being extra watchful would be recommended.  What are doing well are the previous strong sectors.  Generally, Technology and Specialty / Niche companies.  Here’s the areas that I’m watching for strength:

Back to the market in general: the pie charts below shows the overall status of the S&P 1500 stocks (a very broad sampling).

Price Strength –Stocks under Accumulation & Distribution –These charts support my idea that “We’re Not Out of the Woods”, at least not just yet.  Perhaps we have a “Sell in May & Go Away” situation and the “Summer Doldrums” have arrived, but more likely the euphoria of the Trump election has succumb to reality that all of the wonderful things promised won’t happen.  Welcome to politics Mr. Trump.  I have taken positions in select International sectors.  Europe & certain Asian countries have been performing well (avoiding Latin America for now).

So we’re back to this market looking for direction and good (or bad) news.  There just doesn’t seem a need to jump all the way in, but there really isn’t a need to sell either.  Have a good week.        ………….  Tom  ………….

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

Break Out or Fake Out ? April 29, 2017

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April 28, 2017 – No doubt that this past week the market broke out of the trading range that has persisted for over a month.  Higher bars on increased volume, market sentiment back to Bullish and money flowing into the markets.  All generally good news, which likely is being fueled by good earnings reports.

So far a little over half of the S&P 500 companies have reported, and of those, 77% have beat earnings estimates and 70% showed increasing sales revenues that were above forecast.  Pretty good news corporate wise all around.

This is looking more like a “stepping stone” pattern inside of an overall bullish price structure.  I’ve moved price support levels up and trend lines to reflect that.  I think it’s still a wise thing to look out for a distribution bar on heavy volume, just in case.  Geo-politically, there’s a bunch of things that could cause it.

The pie chart below shows sectors that I’m prospecting for stocks.  In addition to Wireless and Internet stocks, there is strength in Internationals (especially European), Consumer Services and Technology.

So I’m “cautiously Long” right now, building a few more positions and still a little concerned about the investing environment in general.  Have a good week.     …… Tom …..

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

Market Waiting April 8, 2017

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April 7, 2017 – Looking at the chart below we’ve broken the upward trend channel and have settled into a fairly narrow trading range.  I’ve labeled the chart as a possible Distribution structure to be on the cautious side.

Money and Volume flows are muted and rather neutral; there isn’t much buying or selling lately.  I’ve moved my support price level up just a little to 5769 on the NASDAQ Composite Index.  that’s were the last “buying” started on a weekly basis.  Last Wednesday could be labeled as a UTAD (up thrust after distribution), but that case is not very strong.   Market Sentiment is weak, especially when compared to where we’ve come from.  Volume on Thursday & Friday was low, not much activity in either direction.

Earnings reports begin week of 4-24, and that’s what this market is waiting for.  Prices are fairly rich so any significant disappointments or forward guidance surprises could generate a swift reaction lower.  Without any indication as to the trend, I’ve got to stay neutral and raise Cash as support levels are broken.  The stocks in the broad S&P 1500 Index are split down the middle and don’t show much of a bias in either direction:

Price Strength –

Accumulation/Distribution –

This is a rare time when I’m really not seeing any edge or strength in any sector.  Sure Precious Metals lately, but the action has been very erratic; Utilities, very muted trend; Technology, not a clear trend.  Sector wise I’d rather be waiting in Cash.

Have a good week.   …….. Tom  ……..

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

 

Market Neutral April 1, 2017

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March 31, 2017 – I want to see a UTAD (Up Thrust After Distribution) so bad, and it may well happen yet, but for now I’ve got to call it “Market Neutral”.  The market is struggling to climb the lower trend line, narrow bars on modest volume.  But it is holding on right now.

Sentiment has improved to “neutral” and both Money & Volume Flows are holding onto a light Bullish posture.  We’re just going to have to wait and see what pushes this market higher or lower.  Earnings season starts with Alcoa on April 10th and it just keeps rolling for the next 3 weeks for the “big guys” to report and guide.  Political news is a wild card in the whole thing.  I’m keeping an eye for either a rush to the exits or a more positive “all clear”.  Make no mistake, this market is expecting very good things.  A case could be made that it is over price and due for some correction, but the markets run on expectations, and not reality (until it can’t be deigned).

I’ve got to go, a busy weekend, but here’s the market sectors that I’m watch for strength:

In the mean time, I’ll watch for an up thrust bar (to a new high), on light volume, followed by a big down bar (wide range) on heavy volume.  Right now I’ve lighted up on some holdings that are showing weakness, waiting for more proof in either direction.

Have a great week.          ……….  Tom  ……….

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

We’re Not In Kansas Anymore March 24, 2017

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March 24, 2017 – Apologizes to ‘The Wizard of Oz’, but this market trend has broken the lower channel line (note below) and that verifies a “Change in Character” IMHO.  The “Trump Rally” has lost its momentum, but the bigger question is ‘has it lost its direction?’

It’s too early to tell just yet since we’ll need a significant Close below the support level (5748).  Looking at the price and volume action, right now it just looks like the market is weak on a “Lack of Demand” / buying.  Volume is low, so there isn’t a rush to get out of this market, at least not yet.  We could just bounce around in a trading range until earnings come out.  Then, we will likely see some action one way or the other.  The lofty expectations for the Trump admiration are coming back to earth and that’s not really a surprise.  It had to happen, this market can’t continue going at this pace without some pause or correction.

We see confirmation in a weak Money Flow and Bearish Volume Flow indicators.  My Sentiment indicator has switched to  Bearish, but remember, we need price follow through to the downside (below support) before we can raise the “red flag”.  Time to honor stops and pay particular attention to market action.  Is the market down, or is it down on increasing volume?  A big difference.

We do have strength in the market, as show below:

The overall stocks in the broad S&P 1500 Index are showing weakness with the number of stocks in Distribution, and increasing.

Price Strength (below) also parallels that of Accumulation / Distribution (above).

I opened with: “We’re Not In Kansas Anymore”.   But we’ll have to evaluate price and volume next week to get an idea where this market is headed.  Right now, I’d say laterally until earnings forces a move either way.

Have a good week.  …….  Tom  ………

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

Still Chugging, but Momentum Slows March 18, 2017

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March 17, 2017 – This market continues to chug along even in the face of “not so positive” political news.  We’re less than 4 weeks away from the next earnings reporting cycle and that could be interesting.  I feel that a lot of good news is priced into this market and if earnings or the expectations don’t hold, that could be about it.  Until that point, it’s likely only minor 3-5% pull backs.

On the chart above I’ve tentatively labeled a possible Buying Climax (bc?) along with an Automatic Reaction (ar?).  This is just a “heads up” possibility as volume doesn’t really support it very well.  Sentiment, Money & Volume Flows all support a Bullish position, so we go with that flow.

The important part is to watch what sectors are strongest and leading the averages.  The table below shows my current sector rankings.

Since these are US sectors, I should also note that China and International funds in general are doing fairly well.  That includes Emerging Markets and Europe.  These have climbed up my World Index ranking over the past few weeks.  I think I may “dip my toe”.

That’s it for this week.   ………..  Tom  ……….

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

Pivital Point (?) March 11, 2017

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Mar. 10, 2017 – This market could be at a pivotal point.  On the Bear side, we’ve seen the momentum in market leadership steadily fall for weeks now.  The momentum in the Advance / Decline line has dropped quite a bit.  Now, this does not mean the market “has to” fall or correct, but it is an indicator of slowing and shallow market leadership.  That typically means either a slight correct / pause in the up trend or a more significant correction.  Also, Small Cap stocks (considered to be higher risk) are not nearly as strong as the Large Cap stocks; agressive speculation drying up.

On the Bullish side, the VIX options index remains low (option traders are not concerned) and price support is holding up well.  The chart below shows this price support.  (click on graphic to enlarge it)

The Money Flow index (top window) is hovering around zero / neutral, so there is no significant selling pressure at this time.  Same goes for the Volume Flow.  My Sentiment indicators remain “Bullish”.  Until that purple lower trend gets broken on a Close and (more over) the 5748 support level gets taken out, I have to remain invested and long overall.

Price strength of the stocks in the broad S&P 1500 Index are pretty mixed, but tend to be much less strong compared to 2-3 weeks ago.

Accumulation & Distribution in those S&P 1500 stocks show a slowing down of buying (Accumulation) as well.

Here are the industry sectors that I’m trying to participate in for the time being.  This is where the strength is currently.

That’s it for the time being.  Take Care & Good Trading.      …….. Tom …….

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

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