jump to navigation

Keeps Going and Going and Going . . . . January 18, 2020

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

Jan. 17, 2020 – This market is like the TV “Every Ready Bunny” (a battery commercial).  It just keeps going higher and higher.  But . .  we know from experience that it WILL stop.  The only question is when.  So, for all practical purposes, there really is not much new to talk about.  A few earnings report last week (mixed) with the real activity starting next week.  All eyes will be on Consumer stocks earnings.  Nearly everyone is looking for the first signs that consumer spending is slowing.  Oh yes, the impeachment “wild card”; who knows?

What is of concern is that the price bars are hugging that upper trend channel line (purple).  The daily spread on those price bars are fairly narrow, indicating seller and buyers are about equal with the bias toward the buyer demand, thus prices increase.  Volume is back to “average”, so not much of a clue there.  (click on chart to enlarge for easy viewing)

Let’s look at the stocks in the broad S&P 1500 Index and see where they are in comparison to each other.

% of those in Accumulation / Distribution% of those with Price Strength

Yes, lots and lots of “green” in both pie charts.  The market IS strong with the majority of stocks participating in the move.  But (again) this is unusual in that it can not last for extended periods of time.  So, we must be careful.  Bad news of any kind will likely re-rail or at least  cause a cause / correction in this rally.  For now, we can only stay the course and closely monitor.  Looking for selling . . . .  wide range down bars on high volume.  Ouch !

Sector Strength

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.

Pushing Higher January 11, 2020

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

Jan 10, 2020 – Wow, has this market been resilient or what?  In the face of bad news both domestic and geo-political, it just keeps going.  General concern is the timing of the overall business cycle.  The basic idea is that a capitalistic economy goes through cycles of expansion and contraction.  Expansion and growth are the result of a recession and a contracting economy (pent up demand).  The contraction occurs with things get “so good” that speculation gets out of control.  Read into that the recent mortgage “melt down”.

Next week, Tuesday I believe, we start the 4th quarter earnings reports.  Concern is that with all of the expansion and good news over the past 8 or so years are we in for a let down?  This market is priced for near perfection and broad disappointing earnings reports will catch up to the current “fear of missing out” philosophy.  Now that may not happen . .  yet, but it will eventually.  The key figure in the US is consumer spending which makes up about 70% of the overall economy.  Watch that for signs.

From the chart above we only see a positive trend, and we’re trend followers.  But I note that prices remain near the upper trend channel line and while wonderful, can lead to disappointment.  (click on chart to enlarge it)  The first level of support is 8934 on the NASDAQ Composite Index, next lower is 8790.  So I’ll get cautious with a close below 8934, and if it’s on high volume (significant selling), I’ll get very concerned.  In reality a bounce down to 8790 would be “healthy” and set things up for a run even higher IF earnings are reasonably healthy.

The (short term) sector strength table is shown below.  Not much changed but I note that Heath Care is showing recent strength.

Not much else to say.  So far in this climate one must be in the market . . . .  I just get concerned when everything and everyone is so complacent.

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

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

Continuation (for now) January 4, 2020

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

January 3, 2020 – First off, I wish everyone a very Happy, Healthy and Prosperous New Year.

With a shortened and ultra low volume week, this posting will be short.  Overall, not much has changed.  The chart below shows that we remain in an upward trending price channel (purple lines).  Money Flow is showing some signs of weakness, though that’s preliminary.  All other indicators remain strongly positive.

One item that caught my attention was the significant volume increase on Thursday and Friday last week.  The activity significantly above a regular trading day (the red line is +30% above average volume). . . unusual for a holiday period.  Perhaps early signs of investment shift in the new (tax) year?  Not to get ahead of ourselves, but something to watch closely next week . . .  rotation, either by sector our to cash.  (click on chart to enlarge)

The sector strength table is below.  Again, little changed, Oil, Technology and China remain strongest for now.

 

Have a good week and keep an eye on volume confirming price (direction).  That will be a pre-cursor to strength or weakness.       …………  Tom  ………

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

A Continuation of Trend December 21, 2019

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

Dec. 20, 2019 – OK then, not much new to say as this market keeps climbing.  Near term support level is 8790 and further down is 8600.  A drop after New Years to at least the 8600 level would not surprise me so that intuitions can show a glowing statement at the end of 2019.  This rate of climb is hard to sustain, so a drop then a pause would be “normal”.

The only lethargic indicator is “Money Flow” (red line), but everything else is Bullish.  (click on chart to enlarge it)   Trading, and of course volume, will be slowing down this week and the market will be rather shallow.  That is if a big trade hits it will drive prices more significantly that is typical.

The sector strength table is below, not much different there either.

Enjoy the holidays and your family, the markets are slow and can wait.  🙂   ………….  Tom  ………….

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

Upward Continues December 7, 2019

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

Dec. 6, 2019 – And so the upward move continues.  A test of the lower trend line (via negative China trade news), then back up.  This shows that the markets are factoring in some type of “trade deal”; maybe not the whole thing, but something.  Interesting that small cap and mid cap stocks came alive over the past week; generally a positive sign.  Now with earnings season well behind us the focus will be on trade and retail sales for the holiday season.  If either disappoints . . . . well we now have a taste of the result.  It will be sharp & swift.

In the mean time one must follow the trend and it continues to be upward.  Call me skeptical, but I remain an uneasy long investor in here.  Part of my logic is that we’re closer to the top (likely) than we are to the bottom.  The regular chart is back and the software upgrade issue has been resolved.  🙂   (click on chart to enlarge)

I’ve moved the Resistance (at 8705) and Support (8542) levels tighter to try and be responsive to any negative news.  IF these levels are violated on the Close that would confirm a possible trend change or correction.  Until then, the other indicators are positive and we go with the current trend.  Let’s look at the percentage of stocks in the broad S&P 1500 index and see where they stand.

Price Strength – In Accumulation / Distribution –Current short term Sector Strength:

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.

Upward Trend Continues December 1, 2019

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

Nov. 29, 2019 – This was a very short trading week in the US, though there was plenty of news internationally.  Most notable were the continuing back & forth comments regarding China trade.  Things don’t appear to be going very smoothly.  The big question is whether the new tariffs will go into effect on Dec. 15.  The count down continues, though I would not count out a “strategic delay” to give everyone more time.  IF the tariffs go into effect this market will react poorly (IMHO).

The chart below shows the price action.  (My software is acting up; a new version, so a few indicators were not immediately available.)

So far, so good.  I do remain cautious as market breath is starting to narrow; meaning less stocks are participating in this rally higher.  (click on the chart to enlarge it)

With this market breather I thought it would be interesting to compare the performance of the major market Indexes year to date.  The chart below begins at the Dec. 31, 2018 close and continues to last Friday.  You see how each index benchmarks off of the other; Bonds included.

That’s about it for now.  Sector strength remains the same from last week.  Have a good week.  ………..  Tom  ………..

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

Direction Still Up: Clouds Forming? November 16, 2019

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

Nov. 15, 2019 – Make no mistake, the direction of the US markets remain “Up”, but . . . . storm clouds may be forming.  Two signs of that are the percent of “Smart & Dumb money” (from SentimentTrader. Com) and my own sentiment composite (top pane, chart below).  The difference between “Smart & Dumb Money” is fairly high indicator of where market tops happen.  That does not mean “all Hell is breaking loose”, but it does raise the caution flag.  The “big guys” are cautious.

Note just how far & fast this market has come in the 6 weeks.  Due for a change or at least a pause?  I’m certainly thinking that is a strong possibility.  It’s just natural.  I also note that price action “Price Strength” is back to Neutral.  Time to Sell?  No, but not a great time to buy either.  Let’s continue to monitor the reaction of the market to any news, whether it be earnings, geo-political or the like.  That will be a clue.  Trade news is going to be a key item here.  Right now we’re being whip-sawed back and forth on that front.  There is a big incentive to inflate these market over the next year (i.e. election); watch the big picture carefully.  (click on chart to enlarge)

Short term, here’s where the sector action is:

That’s about it for now.  I’m in there with significant positions, but getting more uncomfortable as this market pushes higher.  Watch volume spikes on big move days.  Also be aware of “Lack of Demand” (low volume), especially over multiple days.

Have a good week.    ………… Tom  ………..

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

Continuation Higher November 8, 2019

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

Nov. 8, 2019 – What’s there not to like?  The market gapped up higher on Monday and pretty much stayed in a narrow range most of this week.  Ignoring the impeachment and on again – off again China trade news.  So for now, I’ve just got to stay in this market even though I’m not entirely comfortable with it.

The chart above shows all positive indicators; not much else to say.  (click on chart to enlarge it)  Let’s take a look at the stocks in the very broad S&P 1500 Index below.

Price Strength –

Over 50% above their 20 day moving average, so strong price movement for most stocks in the index.

Accumulation (buying) & Distribution (selling) –

(Again) over 50% of the stocks indicating Accumulation of shares.  Maybe a little over done, so a pause is not out of the question here.

Sector Strength –

The Technology sectors continue to lead this market higher in the near term.

So the bottom line is this market continues higher until something forces investors to get nervous and sell.  We’ve come up a fair amount and survived (most) of the 3rd qtr. earnings.  The seasonality is generally good for the rest of the year, so got to go with the flow.  When changes comes, I’ve got a feeling it will come very quickly.  Hopefully the stair step higher will continue in the mean time.

Have a good week.      …….. Tom  ……..

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

Above Resistance, Close to Previous High October 26, 2019

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

Oct. 25, 2019 – Well, onward and upward.  The NASDAQ Composite Index closed above resistance indicating strength.  That’s all well and good but the next level of resistance (above) would be 8325, which was the previous high on 7-26-19.  As we approach that level it is logical to expect a pause to digest the previous up move.  Since we’re right in the middle of earnings season there is always the potential for a surprise.  So far the earnings have been pretty good, with some guidance lower in the 4th quarter.  Volume has been average, so no one is rushing to buy.

                                                      (click on chart to enlarge)

For now we just have to go with the flow and watch for signs of weakness.  The support level is near the 8045 mark and any minor correction should hold near there.  If that level breaks we could be in for further downward action and just wind up in a broad trading range.  The good news is that we’re in a generally bullish sessional period as we head into the Christmas session.  Everyone will now begin to watch for consumer / retail spending, and that will weigh heavily on the market over the next 2 months.

On the sector front, the Technology sectors have regained their dominance.  Latin America and Small Cap stocks are also back in trend.

I am nearly back to being fully invested.  Still looking for a few more stocks to fill in the growth portfolio.  Lately my research has focused on “when to sell” to lock in profits during a correction.  Transaction costs are so low there’s no sense in trying to stick it out and be a hero.  The trouble is most growth stocks go down about as fast (or faster) than they go up.  Timing is a big factor.

That’s it for this week.  Have a good week.   …….. Tom  ……

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

Market Improving, but . . . . October 19, 2019

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

Oct. 18, 2019 – This week we saw a market improvement by breaking the 8062 level, but then stall out at 8172, which is close to a previous swing high (note on the chart below “failure”).  This stall can be considered very normal and merely a pause at a significant level before regaining momentum.  Or, it could be a “double top” which is bearish.  Volume did pick up a little on Friday but we didn’t see a wholesale exodus out of stocks.

What we’ll do is carefully watch for either signs of strength or weakness in the coming week and take our ques from that.  These signs will be where the closing price is in relation to the bar range (either top or bottom) and whether volume increases on those bars (buying or selling pressure).  A close below a previous swing low would confirm bearishness, and a close above a high would be bullish. (click on chart to enlarge)

What I do find curious is the sudden change in sector strength late in this past week. (see table below)  Recall that the Tech sectors (Technology, Semiconductors, “the Q’s”, etc.) were right near the top of the list; refer to the table in last weeks posting.  And now look at how far they have dropped in just a few days.  They’ve been replaced by more defensive sectors (Banks, Telecom, Wireless, etc.).  Are traders getting cautious?  Possibly, but this table is geared to short term strength, thus it can turn around quickly (i.e. made for trading).

I haven’t shown the “percent of stocks in the S&P 1500 Index” pie charts for awhile, so let’s see what they show –

Price Strength-Nothing very remarkable as nearly half the stocks in the index are above their 20 day moving average.

 

 

Accumulation/Distribution-

This pie chart shows a little more tentative strength.  “Normal” would be roughly 1/3 of the stocks in each of the three categories.  Too much green or red would indicate “over bought” or “oversold” conditions within the broad overall trend.  A big chunk of yellow / neutral shows indecision.

That about it for now.  I’m going to be especially observant next week for signs of strength or weakness.  Right now I am “cautiously long” with still some Cash to invest IF conditions continue to improve; but I always want to know where the exit door is located.  🙂  Have a good week.   …….. Tom  ………

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

%d bloggers like this: