WALL STREET CRAPS MARKET OBSERVATIONS FOR APRIL 21, 2012
MARKET OBSERVATIONS FOR APRIL 21, 2012: The stock market’s breadth (advancing issues verses declining issues) continues to correct while prices try their best to rally. This sets up a market that is neither overbought or oversold enough in terms of breadth, sentiment, or price to make new buying decisions in the near term.
The Wall Street Craps approach calls to resisting the urge to short the market and to keep one’s powder dry in cash while waiting for the next buying opportunity. That first opportunity to take pilot positions may occur in the next week or so.
Since the last closing high in the Dow Jones 30 Industrial Average occurred on April 2nd, the more likely buying opportunity would be in the month of May at the earliest. This is based on the concept that selling opportunities and buying opportunities do not occur during the same month. That’s because it takes time to generate a significant shift in investor sentiment – a necessary ingredient for valid market signals.
Side-Bet Notes: Google (GOOG) is now approaching a possible buying opportunity as the Money Flow Indicator hit the 23 level on Friday. A move to the 15-20 range would mark a likely place for a short-term trading bottom. Apple (AAPL) still has much further to go before reaching a Money Flow Indicator buy signal.