jump to navigation

No “Santa Clause Rally” December 30, 2017

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

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

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

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.

A Cautious Bounce December 8, 2017

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

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.

Trend Up Continues November 5, 2017

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

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  ….

Market at Top of Trading Range – Struggling September 23, 2017

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

Sept. 22, 2017 –  Really not much is happening in the world markets.  The NASDAQ Composite Index (below) shows us that we remain in broad trading trade that started in mid-July.  Those blue channel lines are nearly horizontal.

I note that conditions are generally positive, so I remain invested, but I also see that Volume Flow and the volume bars at the lower part of the chart are dropping.  There just doesn’t seem to be as much interest in adding to positions right now.  Technology has slowed, Developing Markets (Latin America & China) have also slowed their advances.  I’m still on the watch for an Up Thrust higher on weak volume to flush out the last of the buyers, but this is more likely a Consolidation pattern.

Some of the previously weak sectors like Energy and Healthcare have shown some rotation back into them.  The question is whether this is a market sector rotation (coming out of one sector and going into another) or just a general slowing down of activity / consolidation.  If this low volume continues without Index prices dropping it would indicate Consolidation.  And the market waits.

Not much exciting to review.  Have a good week.     ………  Tom  ………

Rolling Higher but at Resistance September 16, 2017

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

Sept. 15, 2107 – Once again, I’ll going to keep this brief due to being very busy after the hurricane Irma with clean up; part of the “deal” with living close to the coast.  (Don’t worry, not major damage, just cleaning sand and water off of a “floodable” area . . . but it’s still work.)

Looking at the chart above we see that the market has returned to previous highs and the “long term” trend channel remains up.  All of the indicators shown are positive but one must also note that we’re at (classical) “resistance” in the price structure.  The volume on Friday does not give us much of a clue due to it being options expiration (the 3rd Friday of every month).  In the grand scheme, we should be invested . . . but let’s also be watchful as well since we’re “at the top”.

We see the previous leaders in Biotech and Technology coming back into their roles, but it appears that the overall leadership is narrowing.  Looking at the stocks in the very broad S&P 1500 index we see a fairly positive outlook.

S&P 1500, % of stocks in Accumulation / Distribution:

S&P 1500, % of stocks in a strong / weak structure:

So these charts sure look positive, thus we should be invested.  Where?  I like Biotech, Latin America, China, Healthcare, some select Oil Service companies as well as select Basic Material stocks.  Pharmaceuticals and Semiconductors are coming on strong as well.

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

P.S.  If there is an area that you’d like me to cover, drop me a comment in the area at the top of this post.

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

Unsteady Markets September 10, 2017

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

Sept. 8, 2017 – Due to the hurricane, I’ve had to evacuate, so this will be short.

We’re still in an up trend, both short term and long term channels are either up or prices are above the upper line.  6480 remains resistance and 6216 is support..  What concerns me is the potential for a “double top” / Up Thrust in the price structure.  Money Flow is positive but lacks conviction.  So, I remain invested but still cautious about this extended market.

Here’s what sections are doing:

I prefer Developing Markets, Healthcare and select Technology sectors too.

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

At Pivot Low, Next Week Important August 19, 2017

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

Aug. 18, 2017 – A quick look at the price chart below shows how the NASDAQ Composite Index closed on Friday, right near the previous swing low.  We have two lower swing highs and now two lower swing lows.

That 6216 close on Friday is just a little ominous in that IF we’re expecting a turn around, it should happen on Monday.  Otherwise the next target lower is the 6141 level.  That 6141 level is where buyers have previously come into the market (we’ve already ‘blown through” the 6303 support level).  I’ve spotted in a few important Wyckoff turning points; these would indicate further market weakness.

Also in the chart above: Sentiment is bearish, as is Money Flow and Volume Flow.  We’re entering into a period of the year where the stock market is typically weak; late August through early October.  I’m not a big fan of seasonality, preferring to observe and follow the trends as they develop.

Selling also dominates the S&P 1500 index stocks.  The pie chart below shows the number (i.e. %) of them in Distribution (red / selling) and Accumulation (green / buying).  There is far more red than green right now.

A look at the sector strength table below shows a move toward more “defensive” stock sectors.  The previous market leaders of the Technology sectors have moved down in the table.  In the short term, this is a time for either hedging (via “bear funds”) or staying close to an exit plan if necessary.

I’m seeing more strength in Emerging Market countries for the time being, as well as Utilities, Telecom and other defensive sectors.  I’d wait until Monday afternoon (after the weekend investors place their sell orders) before I’d jump to any conclusions, but it sure looks like a market that’s headed lower.  At least another 3 to 5 % next week.

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

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

Market Looking for Guideance May 6, 2017

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

May 5, 2017 – Looking at the chart below a few things stick out to me.  The last correction was minor because volume during the small blip down was very light.  Volume did increase (back to about average) on the price recovery.  But . . the last two days has volume falling off, plus the bars this week have had a narrow spread.

It just appears that buying is rather light, but there is also little selling.  Earnings have been OK, a few surprises, but generally good.  This market has priced in good earnings plus a number of things promised too.  I’m still looking for an Up Thrust bar, closing near the Low, on high volume.  So far that’s NOT the case and this market just grinds higher.

I did see a comment by a trader that breath is narrow, that is, few stocks are leading market average / indexes higher.  I would agree.  That bears watching and the longer it continues, the more concerned we should get.  Small and Mid cap stocks have been lagging behind Large cap stocks.  I’ll watch the price bars and volume along with the lower trend line and support levels for clues on further action.  For the time being, I have to stay invested.

Here’s what areas are doing best right now:

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.

Market Waiting April 8, 2017

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

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.

 

%d bloggers like this: