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

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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

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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

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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

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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

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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

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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.

Climbing the Upper Channel February 10, 2017

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Feb. 10, 2017 – As the 60’s Rock-n-Roll saying goes: “And the hits just keep on coming !”, and so does this market rally.  Prices continue to hug that upper trend channel line (purple).  The latest rally was (supposedly) sparked by Trump commenting that he’d have a tax reform plan out in the next 2-3 weeks.  This market has high expectations for the new administration.  How it delivers remains to be seen, though past execution of plans leaves room for concern.

nasdaq

In any case “it is what it is” and the markets continue higher.  I’ve spotted in new support price levels to watch for.  The 5575 level is the last price pivot level and the 5522 is the low for the last weekly “significant bar”.  The significant bar idea is based off of Wyckoff’s idea that the low of a major weekly up bar is significant since it showed where significant buying had come into the market.  I may start plotting that level here in the future.

One area I’ve been working on is evaluating industry sectors based on the performance of the stocks in those sectors.  Sure price is important, but so are the number of stocks advancing and the volume of those, compared to the declines.  Strong & broad participation are very positive for continued strength.  The idea of market analysis, then sector / industry analysis, before stock analysis, is very Wyckoff based as well.  Today we call it “top down analysis”, but it goes way back to the 1920’s.

So here’s my latest ranking (it could evolve, nothing is 100% set) of major industries, using the behavior of all stocks in those sectors.

sectors

The colored bar is a percentile ranking and the raw score is next to it.  My goal is to (quickly) provide good information on where to look for opportunities.  That said, I continue to like Metals & Mining, China, Technology and Emerging Markets (especially Latin America).

Always looking for comments & feedback from readers.  Take Care and have a good week.   ………  Tom  ……..

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

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