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WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 16, 2023

January 16th, 2023 Comments off
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The stock market is currently short-term overbought and is likely to have a correction of some sort in the next week to 10 days. Once this overbought condition is relieved, the market can be expected to retest its current high and possibly breakthrough to higher ground. The most telling characteristic of the most recent bottom is that the final decline was lead by “the Generals” Apple and Tesla. As such, a good trader must be ready for the surprises that may come to the upside instead of the downside for the intermediate term.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This index’s oscillator has a current reading of 77. This indicator is just now starting to cluster. So there is no indication that a significant decline is going to happen right now. It’s most recent bottom surprised me by not getting to the “oversold” area, but instead turned up at the beginning of the year.

Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 63 and trending up. Timing-wise, this doesn’t meet the criteria for buying right now. However, bullish runs can go on for extended periods of time without much of any time spent heading towards the oversold condition.

WALL STREET CRAPS STOCK MARKET STRATEGY DECEMBER 10, 2022

December 10th, 2022 Comments off
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The stock market appears to have completed its Bear Market rally from the October lows. Don’t be surprised if those October lows are tested in the coming weeks with either a low-volumn Dow Theory non-confirmation or a climatic high-volume crash to occur. In most cases, this would be a good time to step aside and let the market set itself up for a better opportunity in late December or in the January/February time period. This is a tricky time in the market where a Bear or Bull can easily lose money and/or sleep!

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This index’s oscillator has a current reading of 76 and trending down. This indicator is starting to cluster now after a big run-up since October. The cycle of this indicator would suggest that it is now time for the market to head down for a number to weeks before clustering again to form a stable bottom.

Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 54 and trending down. Having been in the “Greed” range for many weeks, it looks like this indicator is heading back towards the “Extreme Fear” area that is required for a good bottom. The trick here is to be patient enough to see a reading in the “Extreme Fear” range, but on the lookout for the deep bottom move to the under 5 reading of major bottoms. This is always a distinct possibility.

WALL STREET CRAPS STOCK MARKET STRATEGY OCTOBER 15, 2022

October 15th, 2022 Comments off
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The stock market had a sharp two-way response to the latest FED meeting. This created both a bull and bear trap for traders. But this latest one-day rally may prove to be a curse in that it relieved downside pressure and opens the way to continued downside action. Prices can certainly continue down rapidly in a short period of time. My guess is that there needs to be a clear sign of capitulation in order for a bottom to take place. This entire decline has been too orderly. The “blood” is still not on the street, even though it should be now. Also,the internal indicators below indicate that there is more room on the downside before the general market becomes short-term “oversold.”

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator is continuing its long downward move. In terms of time, this indicator should be bottoming and even reversing course soon. But first this indicator needs to “cluster” before changing direction. But this indicator suggests that after the cluster is finished, the market to turn to the upside for an extended period.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 21. But major bottoms have occurred around the reading of “2-5” so we are far from that. This indicator also confirms to me that this decline has been too orderly and is lacking the signs of “blood on the street” capitulation that is usually needed to reverse course on a down market of this magnitude.

WALL STREET CRAPS STOCK MARKET STRATEGY SEPTEMBER 3, 2022

September 2nd, 2022 Comments off
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The stock market declined this past week with only one day to the upside. The market is due for a relief rally that may get started early next week. But this next rally may be setting up the market for a large drop after this temporary buying subsides. My guess is that the market will be very tricky to trade in the coming week. And for many people especially those who want to go long, this may be a good time to avoid the market until a more pronounced bottom has been tested and formed.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator is trending sharply lower with a current reading of 33. It should reach the oversold territory in one more trading day.

Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 41. A reading below 25 is needed for a tradable low based on this sentiment indicator. This indicator is several days away from signalling a bottom.

WALL STREET CRAPS STOCK MARKET STRATEGY AUGUST 23, 2022

August 24th, 2022 Comments off
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The stock market has declined sharply from its rally highs only one week ago. The short term oscillators are all in oversold territory suggesting that a bounce is due at any time now. Perhaps, Wednesday will be a day that opens lower, scares bulls into dumping, and turning around for a positive close. But where the market goes on an intermediate term basis is anyone’s guess at this time.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current reading of 74 which is just coming out of overbought territory. This suggests that an intermediate term bottom has not had enough time to set up and any trades on the long side are for short-term speculation only.

Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 45. A reading below 25 is needed for a tradable low based on this sentiment indicator.

WALL STREET CRAPS STOCK MARKET STRATEGY JULY 15, 2022

July 15th, 2022 Comments off
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The stock market has been staying above its June lows in the face of horrible news on the inflation/interest rate front. The rally so far from the June lows has not been very impressive, but the internal indicators are setting up for a possible tradable low on either Monday or Tuesday of next week. So keep your powder dry and buy into weakness early next week for a possible rally into August. Overall, the odds look good for decent bet to the upside.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current reading of 55. It is just now starting to trend down which is not in tune with a tradable low early next week.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 24. This may be low enough to confirm a “retest low” for early next week.

WALL STREET CRAPS STOCK MARKET STRATEGY JUNE 16, 2022

June 17th, 2022 Comments off
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The stock market has turned sharply lower after the FED announcement of its latest interest rate hike. The one day rally before this announcement was preceded by a couple of gap down market days. But in the process, the internal indicators are now all in “oversold” territory which signifies that a market bottom is likely to occur. This is particularly true in “Bull Markets,” but in “Bear Markets” these kind of oversold conditions are often a signal that a “Stock Market Crash” is about to happen. Because of this, it would be smart to wait until next week for a possible bottom following a “stock market crash” on Monday or Tuesday.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current reading of 46 but still needs a few more days before reaching the buying zone. Thus, it is saying that the market needs more time in order to find a bottom and in the meantime it could continue on its sharp downward path.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 14. Recent intermediate-term market bottoms have had readings under 5.

WALL STREET CRAPS STOCK MARKET STRATEGY APRIL 26, 2022

April 27th, 2022 Comments off
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The stock market has turned sharply lower since its midweek highs of last week. There have been 3 strong moves down with only a temporary reprise on Monday. Momentum seems to be suggesting that buying this drop will be akin to “catching a falling knife.” However, the internal indicators are either approaching or are within the oversold range suggesting a bounce in the near term. The timing of that bounce could be either be this coming Friday or Monday for those interested in a quick high risk trade with tight stops to the upside.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current reading of 39 but still needs a few more days before reaching the buying zone. But mostly, this indicator is showing that there has not been base building for any kind of sustained rally. Thus, it suggests that even a sharp bounce will be short-lived.

Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 26 which is one point away from “Extreme Fear.” The strength of this decline suggests to me that we may finally get a sub-10 reading in this indicator when the market finally bottoms. And if it does so, then there could be a low-risk rally worth participating in. But right now, I’d expect only short-term bounces with high risk upside trades.

WALL STREET CRAPS STOCK MARKET STRATEGY APRIL 3, 2022

April 3rd, 2022 Comments off
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The stock market has turned in a spectacular rally in the face of bad news climbing the proverbial “Wall of Worry.” With a few internal indicators getting in the “overbought” range, you could expect some downward or sideways action over the near term. But the intermediate term (next few months) is still anyone’s guess. The Elliott Wave followers are looking for continued higher prices, while other’s see a limit to the upside and plenty of economic reasons for it to go down. Personally, I am waiting for another good set up like we had two weeks ago in order to make a good bet with strong odds.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator had an “oversold” reading of 29 on March 12, just two days before the bottom. It had been in the oversold area for several weeks and the dots were “clumping” in a basing area. So when the market turned decisively to the upside these past two weeks, you could expect that move to be sustained. So buy the dips!

Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 49. This means that the general market can go up or down with an even probability. So it is not an optimal time to go long or go short. Note: This indicator got an “Extreme Fear” reading of 17 in mid-March which at the time did not seem low enough to a climatic bottom. So instead we got an exhaustion to the downside with too much pessimism and negative news that created a decent trading bottom. Has this been a “Bear Market Rally” or the start of a new “Bull Market?” That’s the question for many.

WALL STREET CRAPS STOCK MARKET STRATEGY MARCH 12, 2022

March 12th, 2022 Comments off
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The stock market had a mild down week against a challenging news backdrop and thus sets itself up for either a strong move up or down in the near term. My hunch is that the market will do both in the coming week or two. And that is a strong move down followed by a strong move up. But catching the final bottom in this scenario is bound to be tricky. Unless you are an experienced trader, it might be smarted to control your risk with smart “betting strategies” – buy even chip size over an even time frame in active ETF positions. Anticipate a possible scary plunge and reversal based on “obvious bad news.”

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current “oversold” reading of 29. It has been in the oversold area for several weeks and the dots are clumping in a basing area. When the market turns decisively to the upside, expect that move to be sustained.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 14. It has been in this territory for several days now and only needs to continue going down towards a sub-5 reading ideally. That could happen in the next week or so with the negative news background and the gradually declining sentiment.