MARKET OBSERVATIONS FOR October 13, 2013: The stock market’s rallies and declines over the past few months have ranged between 14 and 17 trading days. The October 8th bottom comes exactly 14 days after the most recent closing high in the Dow Industrial Average. The current rhythm of the market suggests that the next top should come between 14 and 17 days after the October 8th bottom. Since we are only 3-4 days into the rally phase, there is still lots of time for the stock market to continue its current uptrend.
Key market indicators show the following:
For now, my advice for traders is to look for weakness early next week in which to take short-term “rental” positions in the QQQ, IWM, SPY, and DIA Exchange-Traded Funds. Expect to hold these positions into the end of the month. Otherwise, be ready to lighten up as the market’s rally runs out of time.
MARKET OBSERVATIONS FOR September 29, 2013: The stock market has declined steadily since its recent new closing Dow high. The most recent advance and decline have been between 14 and 17 days long. That timing pattern would suggest that the market still needs one more week of declining action in order to reach a bottom around October 8-10. In the meantime, the current list of relevant indicators suggests that an oversold condition will likely be met in the coming week. That being said, it looks like a buying opportunity is starting to shape up over the near term.
Key market indicators show the following:
For now, my advice for traders and investors to keep your powder dry in anticipation of a good buying opportunity in the next week or two. At this point, the sentiment has not changed significantly enough to warrant a bottom. But with a steady flow of negative news, the market can quickly change to one where savvy traders and investors can take intelligent risks to the upside.
MARKET OBSERVATIONS FOR September 13, 2013: The stock market has rallied to a point where it is overbought and about to form the right shoulder of a “head and shoulders top.” While it is still entirely possible for the market to continue its upward march towards new highs, it also could be near its end in terms of time. After a 17 session decline, the current rally will match that time by the end of next week. Since I never recommend going short or buying inverse ETFs, this is a time to be out of the market and waiting for a deeply oversold condition to establish new long positions in the weeks ahead.
Key market indicators show the following:
For now, my advice for traders and investors to get out of the market and wait for a better risk/reward environment. The September/October period is usually a time of increased volatility which could produce a deeply oversold condition in which to take new positions.
MARKET OBSERVATIONS FOR August 17, 2013: The stock market had a big drop last week as it heads into its August bottom. From this bottom, we should see a new rally which will either form the right shoulder of a “head and shoulders top” or challenge the early August highs. But so far, this decline has been a confusing one to analyze and trade effectively. Time and cycle studies indicate that Monday or Tuesday should see the low for August, but it remains to be seen what kind of strength, if any, awaits investors and traders. And despite last week’s weakness, it is still entirely possible that the decline could resume in earnest. So watch your step out there, play it tight to the vest, and keep your bets (position sizes) small.
Key market indicators show the following:
For now, my advice for traders is to wait for the next oversold condition and then take positions for an upside move into the Fall. But last week’s unusual TRIN readings on this current decline, shows an absence of selling. This makes it anyone’s guess as to how much further the market will drop in the coming week. Perhaps this is one of those times when it’s best to just stand aside and let the market set itself up for a better percentage move.
MARKET OBSERVATIONS FOR August 10, 2013: The stock market made a new closing high 5 trading sessions ago. Since that time, it has been in a slow, choppy decline where there has been an absence of buyers rather than an abundance of sellers. The previous high was largely confirmed by other major indicators and suggests that another “retest” rally will be made in the coming week. But the NYSE Summation Index is making the case for a significant low coming up in a couple of weeks.
Key market indicators show the following:
For now, my advice for traders is to wait for the next oversold condition and then take positions for an upside move into the Fall. But if the market were to rally here into an unconfirmed new high, I’d be wary that the highs for the year have been achieved and to stand aside in a defensive position of cash. Thus far, playing the short side of the market has been difficult to trade and is better off avoided by most people.
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The indicators for Apple (AAPL) read as follows:
- Current price: 454
- Relative Strength Indicator = 61 heading down
- Ultimate Indicator = 59 heading down
- Money Flow Indicator = 50 heading down
- 50-Day Moving Average = 435
The stock of Apple appears to have achieved its upside objective for this cycle in terms of price. I would wait to take new positions in the stock whenever any of the indicators (RSI, Ultimate, Money Flow) reach oversold readings. Of these, the Money Flow Indicator has been the most reliable one for swing trading. I’ve surmised that trying to chart this stock purely from a price standpoint has been an exercise in futility. The best trading results for the past year have been by simply relying on the Money Flow Indicator to identify low-risk buying areas to go long.
MARKET OBSERVATIONS FOR August 6, 2013: The stock market has continued its march upwards despite any rest for over a month. Expect this winning streak to continue until we see some obvious non-confirmations to the downside. For now, it looks like any near-term correction could create a quick oversold condition for another ride to new highs. The last phase of this advance should see strength in the DOW and QQQ Indexes while breadth weakens. This has not happened yet.
Key market indicators show the following:
For now, my advice for traders is to buy into any dip that corresponds to an oversold reading. This current rally has its doubters and will continue to “climb a wall of worry” until the bears capitulate. The most recent highs appear to have been strongly confirmed which gives the market more weeks to the upside.
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The indicators for Apple (AAPL) read as follows:
- Current price: 469.45
- Relative Strength Indicator = 74 overbought
- Ultimate Indicator = 69 almost overbought
- Money Flow Indicator = 65 neutral
- 200-Day Moving Average = 465
The stock of Apple is finally broke decisively above its 50-Day Bear Market Moving Average. That means that this moving average no longer applies to the nature of the stock. A new “Bull Market Moving Average” will eventually form as the stock of Apple shifts to its new phase. But at this time, it cannot be determined what time frame the new moving average will get in sync with. But for now, a smart trader will be looking for a correction in the stock in order to ride this new phase upwards. That signal will probably come from an oversold condition in the Money Flow Indicator or Relative Strength Indicator.
MARKET OBSERVATIONS FOR July 17, 2013: The stock market has been pushing upwards with an absence of fear. It is now at the top of its trading range in an environment of investor euphoria. While this may not signal the end of the bull move, it should mark the general end of this current cycle. I’m sure that the first correction down from here will be met by dip buyers. But it’s the nature of the next rally that will determine whether the market has the strength to push to new highs or retreat to the lower-to-middle part of the trading range. But don’t be surprised if you look back at this time period and wish that you had sold out.
Key market indicators show the following:
For now, my advice for traders is to buy into any dip that is triggered by obvious bad news for a quick ride to test the recent highs. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO. The NYSE Summation Index shows that the market should be strong for several more weeks. But for most investors, this time period represents a period in which to lightened up on existing long positions.
Projected Final High: Tuesday July 23
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The indicators for Apple (AAPL) read as follows:
- Current price: 430.20
- Relative Strength Indicator = 56 neutral
- Ultimate Indicator = 60 and heading higher
- Money Flow Indicator = 61
- 50-Day Bear Market Moving Average = 427
The stock of Apple is finally above its 50-Day Bear Market Moving Average. It is also right in the middle of its price pivot points. But given its Money Flow Indicator pattern of cyclical lows, I’d bet that new lows for the stock are some 3 months away. That also means that it probably has at least one more good month of advance in it. This stock may continue to move independently of the general market.
MARKET OBSERVATIONS FOR July 10, 2013: The stock market continues to climb the proverbial “wall of worry” on the hope of reassuring news from the Fed. This current rally is in the position to challenge the market’s previous highs and may even surpass those May readings. But overall, this appears to be a time to wait for a pullback before it embarks on its challenge of the old highs.
Key market indicators show the following:
For now, my advice is to buy into any dip that is triggered by obvious bad news. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO. The NYSE Summation Index shows that the market should be strong for several more weeks.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 50 neutral
- Ultimate Indicator = 58 and heading higher
- Money Flow Indicator = 29 with lots of room to move to the upside
- 50-Day Bear Market Moving Average = 427
The stock of Apple is in a position to go in either direction but seems to have an upwards bias. I was hoping for a retest of the old lows but got surprised by a Wall Street analyst’s “strong buy” recommendation that moved the stock up sharply for several days. It has since retraced some of those gains, but may be ready to rally again shortly.
MARKET OBSERVATIONS FOR July 10, 2013: The stock market reached a short-term bottom last Monday morning. Normally, one would expect a retest of that bottom in about 5 to 7 days. Therefore, we would expect some weakness on Monday and/or Tuesday as that retest. We had 3 days up from the bottom and can anticipate an equal 3 days down in this simple time symmetry. But the Summation Index clearly shows that we have already arrived at an intermediate term bottom and that smart traders/investors should get on-board for another bull run that will climb the proverbial “wall of worry.”
Key market indicators show the following:
For now, my advice is to buy into any weakness at the beginning of the week. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 26 (buy signal under 30)
- Ultimate Indicator = 33 (buy signal under 30 which it was on Thursday’s close)
- Money Flow Indicator = 6 (buy signal under 20)
This means that the stock of Apple is now in a buy zone and time to start accumulating. While it would appear that a test of the previous lows around 383 can be expected, we’ve learned to expect the unexpected when it comes to this stock. With a 3% dividend, an investor will get paid to wait on this unpredictable stock.
MARKET OBSERVATIONS FOR June 12, 2013: The stock market reached a short-term bottom last Thursday morning. That bottom is about to be tested one week later which coincides with tomorrow. With extreme readings in the NYSE Breadth Oscillator over the past week, it is entirely likely that tomorrow will present a buying opportunity before the next leg up to new highs.
Key market indicators show the following:
For now, my advice is to buy into weakness in oversold stocks or indexes with high positive correlations. Exchange-traded funds to buy would include DIA, SPY, QQQ, SSO. Oversold stocks to consider would include QCOM, BRCM, IYR.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 42
- Ultimate Indicator = 38
- Money Flow Indicator = 44
This means that the stock of Apple is mid-ranged and can go in either direction. There isn’t any pressure on the stock to go in one direction verses the other. I’d personally stay away from this issue until one or more of its indicators show that it is oversold again.