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WALL STREET CRAPS STOCK MARKET STRATEGY AUGUST 21, 2021

August 21st, 2021 Comments off
craps front cover

The stock market traded lower for most of the week that coincided with the turmoil in Afghanistan. With the rally on Friday, the Dow Jone Industrial Average is about 500 points below its August 16th high. I would expect a rally to new highs to be unconfirmed by the majority of other indicators. That would set up a Dow Theory Sell Signal as well as a Granville Sell Signal worth shorting or selling existing long positions. Such a scenario could take place in the next 3-7 trading sessions so be on your toes for this developing opportunity.

Key underlying short-term timing indicators show the following:

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Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 25 after being in the “Extreme Fear” zone with a reading of 22 on Thursday. The best buy signals on major corrections have occurred when the reading gets below 10, however.

Monday August 23rd Note: The Granville Sell Signal usually occurs when the new unconfirmed high in the Dow Jones Industrial Average coincides with an obvious public good news cover story. Could the Pfizer COVID vaccine FDA approval be that cover story?

WALL STREET CRAPS STOCK MARKET STRATEGY JULY 24, 2021

July 24th, 2021 Comments off
craps front cover

The stock market spiked down on Monday and then rallied strongly the remaining 4 days of the week. I was looking for a trade set-up on Tuesday morning, the market did not present an opportunity to “fade” the trade . This has happened often in the past and it is often wisest to buy during the last half hour of trading instead of letting the futures market change course and ruin your trading plans. I missed a good trading opportunity by trying to be too perfect in a tricky market. In this case, it’s more important to determine a gradual betting strategy than trying to time a “hot and cold” market too closely.

Key underlying short-term timing indicators show the following:

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Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 32 after being in the “Extreme Fear” zone with a reading of 17 on Monday. So this indicator did flash a clear buy signal of Monday which I saw but didn’t act on.

Note: Friday July 23rd’s, new closing high in the Dow Jone Industrial Average was not confirmed by the Dow Jones Transportation Average. This sets up a classic Dow Theory Sell Signal. Mark this date as a possible intermediate term top.

FEAR/GREED HAS A READING OF 4 – “VERY EXTREME FEAR”

March 11th, 2020 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “4” which indicates that we are in the area of an “Extreme Fear” buy signal. This is only one criteria for a trading bottom but an important one. The December 24, 2018 bottom had a reading of “2” so we are in that rare general area. Any reading below this is probably worth a trade to the long side. This indicator does not stay in this area for very long.

FEAR/GREED HAS A READING OF 10 – “EXTREME FEAR”

February 29th, 2020 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “10” which indicates that we are in the area of an “Extreme Fear” buy signal. This is only one criteria for a trading bottom and it could easily go down further. An “Extreme Fear” reading of “2” occurred at the December 2018 bottom. So be careful here. There is still room for more downside and the stretching of this indicator.

FEAR/GREED MAY BE HEADED TOWARDS AN “EXTREME FEAR” BUY SIGNAL

February 18th, 2020 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “51” which indicates that we are quite possibly traversing the range towards an “Extreme Fear” buy signal. With the current strength in the markets, I would only expect this indicator to briefly touch the under “30” reading. It should then explode higher.

FEAR/GREED IS NOW REGISTERING “EXTREME GREED”

December 23rd, 2019 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “91” which indicates that we are in the area of a top. Keep in mind that more often than not, the final top or ideal sell point occurs when this indicator is above a reading of “90.” While this does not mean it is a time to short the market, it does mean that it is not the time to buy.

FEAR/GREED IS NOW REGISTERING “NEUTRAL”

September 28th, 2019 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “52” which is not indicating a nearby top or bottom. Keep in mind that more often than not, the final bottom or ideal buy point occurs when this indicator is below a reading of “10.”

FEAR/GREED IS NOW REGISTERING “EXTREME FEAR”

August 6th, 2019 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “22” which is the first step to getting a tradable bottom. But keep in mind that more often than not, the final bottom or ideal buy point occurs when this indicator is below a reading of “10.”

THE LOWEST READING SINCE THIS INDICATOR’S INCEPTION!

December 22nd, 2018 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “2” which is the lowest number since this indicator’s inception. This suggests that market sentiment is at levels last seen in the 2008-2009 bear market. However, this doesn’t necessarily mean that the market is ready to go up just now. But what this does do is potentially indicate the location of the “internal bottom” of the market. The “external bottom” or lowest Dow Jones Industrial Average closing price will likely follow 2-5 weeks later. On this second “external bottom” there will be many non-confirmations to show it’s a final bottom. This type of set-up won’t happen until January.

FEAR/GREED SENTIMENT INDEX – OCTOBER 14, 2018

October 13th, 2018 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of 11 after reaching an even more extreme reading of 5 on Friday. This suggests that the market is within the buying opportunity area.

This indicator has gone down enough but only may need to spend more time in this area before rallying upwards in the coming weeks.

With the internal indicators in “oversold” readings, this suggests that a tradable bottom could occur in this time period – which is within the next two weeks. However, there is always the possibility of one more crash down of obvious “bad news” in order to shake out the weak hands.