The stock market has made a dramatic recovery from its sharp decline last month. However, this could be the ideal setup for a classic Dow Theory Sell Signal. A new closing high the DJIA over 41,198.08 will not be confirmed by the NDX, DJTA, and the popular Magnificent 7, three prominent indicators. The ideal cover story is also present with the new Kennedy/Trump alliance and the Fed’s announcement of a cut in interest rates. This could all occur as early as Monday so watch the last hour of trading with the idea of taking pilot positions on the sell side if a rally comes without significant volume. Note: Be careful since Wednesday’s NVDA announcements may trigger another leg up as well.
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. This suggests that there may be some more time left to this rally (1-2 weeks) since this indicator is still in a rising trend.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 53. This does not mean that it is an ideal time to short the market. In fact, this indicator is best used for finding bottoms, not tops. It did another good job of spotting this current rally.
Categories: Stock Market Strategy, Stock Market Timing Tags: Categories: Stock Market Strategy, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, stock trading, stock trading tips, stocks, Tags: investing, Tags: investments, Tags: QQQ, trading, trading tips, wall street, WALL STREET CRAPS STOCK MARKET STRATEGY JUNE 19
The stock market continues to correct for the last 15 trading sessions. This is a time match from the previous correction with the possibility that Friday marked the end of the decline. The Fear/Greed Index seems to agree that one more lower close on Monday might mark the bottom of this decline and the start of the Elliot Wave #5 to ATHs. However, the NYSE McClellan Summation Index is clustering in the overbought region and suggests the opposite – that a decline of a few weeks is due to reverse the upward trend in breadth numbers.
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 81. This suggests that a decline is due to occur over the next few weeks to correct the upward trend in breadth statistics.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 27. A close below 25 would take this widely-followed indicator into the “Extreme Fear” area that has marked the bottom of all corrections. Note: Major corrections end when this Index is below a reading of 5.
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The stock market has been continuing its relentless march upwards in terms of the S&P 500 and the Nasdaq Indexes. At the same time, the Advance/Decline Line, the Dow Jones Industrial Average and the Dow Jones Transportation Average have not confirmed that same strength. This presents a time to be extra careful about trading the upside for too long of a time and trading the downside too early or in the wrong sectors.
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 22. This clearly means that a bottom is closer than a top. This is a rare occurrence when many major indexes are making new highs.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 42. This means that the market could head lower and reach a bottom soon. Or the market can head higher for a much longer period of time.
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The stock market appears to have reached a short-term “external top” with the reversal on Thursday after the Nvidia earnings report. In order to receive a “sell signal,” I would anticipate a new closing high or two with non-confirmations across the board. That is setting up for within the next 5-10 trading days. However, if the market continues to climb with strengthen, then Wednesday’s external top analysis would be invalidated.
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 64. This indicator has topped out and is trending down at the moment. This often times indicates that the market is heading down or staying flat.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 53. New long positions should be considered if this indicator can get below a reading of 25. That will take a little bit of time to create.
The stock market haD been on a relentless advance since its bottom in October of last year. However, these past two weeks have shown signs of a possible topping pattern and a time to move to the sidelines or lighten up on long positions. From a Dow Theory perspective, the Dow Transportation Index may provide a non-confirmation of a new Dow Industrial Average high. And if other major indexes and technical indicator also fail to confirm a new closing high in the Dow Jones Industrial Average, then we will have a classic “Sell Everything” Joe Granville Sell Signal worth respecting. This all makes for an interesting time.
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 47. But the daily readings just closed below its 15 Day Moving Average two days ago. This suggests that a bigger decline may be in the cards over the shorter term and not a time at all to buy or hold.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 61. It is too early to buy based on this indicator which has been very accurate in picking bottoms to the exact day. Maybe a lot of people are watching and acting on this index.
The stock market has been on a relentless advance that has destroyed the Bears and is pushing to new all-time highs. This euphoria could continue longer than most expect, but lead to a sharp correction in the next week or two. It’s probably too late to buy and too early to sell. I’d expect a new closing high in the Dow Jones Industrial Average that is unconfirmed by the majority of other indicators and indexes to be the time for the market to turn down. Expect the first 10 days of January to be very tricky to trade in either direction.
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 97. It has been in a strong uptrend since it bottomed in late October. The first clue of a decline is now showing up with a “cluster” of postings near its peak. Time wise, the market has gone up long enough without a correction by historical standards.
Fear/Greed Index: This popular indicator is in the “Extreme Greed” territory with a reading of 76. This indicator suggests that it is not the time to go long and time to lighten up on long positions.
The stock market has been correcting for the last week with many of the short-term indicator within striking distance of oversold readings. Investors and traders should be very careful in this time period as deep oversold readings often occur during the September-October time period. This week should be interesting with Apple’s earnings, new iPhone and China news affecting this bellwether stock.
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 26. It has been in the oversold range for some time now and just recently started to decline once again.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 51. The next solid upside trading opportunity doesn’t appear unless this trusty indicator hits a reading of 25 or less (Extreme Fear).
The stock market has been correcting for the past few weeks since the end of July/early August. The technology sector has taken a harder hit than the rest of the market. The internal indicators show that the market can go in either direction, but the NYSE McClellan Summation Index suggests that the decline has more time to go. But price-wise, the SPX 55-Day Moving Average is getting close and provides support to the market for bounce. But it is unusual for a market to reach an intermediate hit and an intermediate bottom in the same month.
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 45. This indicator has been trending lower for 10 trading days now. It is approaching an oversold reading which says that a tradable bottom is approaching. This is one of the most reliable intermediate-term trading indicators and gives you plenty of time to prepare.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 67. The next solid upside trading opportunity doesn’t appear unless this trusty indicator hits a reading of 25 or less (Extreme Fear).
The stock market has been trading in a very tight trading range for many weeks now. While many technology stocks have performed well, others like bank. transportation and Russell 500 stocks have performed poorly. With such a split market, the breadth readings will give distorted readings. Based on my experience, a sharp but quick drop should create a good buying opportunity for nimble traders. But otherwise, long-term investors might want to wait in high-yielding money market funds for a better, more oversold bottom.
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 31. This indicator has been trending lower for over 10 trading days now. It is approaching an oversold reading which says that a tradable bottom is approaching. This is one of the most reliable intermediate-term trading indicators and gives you plenty of time to prepare.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 58. The next upside trading opportunity doesn’t appear unless this trusty indicator hits a reading of 25 or less.
The stock market has broken to the downside after hovering for several weeks in a tight trading zone. The short-term indicators are very oversold so a bounce can be expected in the next day or two to release that upside pressure. But after this bounce, you can expect the market to return to the downside since the intermediate-term NYSE McClellan Summation Index has made its turn to the downside with very negative historical indications.
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 58 but is now clearly turning down after rallying for about a month. Timewise, this downturn can be expected to start accelerating in about 5-7 days. Use this anticipated bounce to unload on your long positions with the intent of buying back after this indicator bottoms several weeks from now.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 52. This indicator has a long way to go before it registers a buy signal below a reading of 25 or “Extreme Fear.”
Categories: Stock Market Strategy, Stock Market Timing Tags: investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, Tags: investing tips, The Stock Market
