Archive for April, 2012


April 21st, 2012 Comments off

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.


April 7th, 2012 Comments off

MARKET OBSERVATIONS FOR APRIL 8, 2012: The stock market continues its correction into a late April to May bottom. The short side of the market continues to be tricky (as always). So it’s best to stay out of the market and on the sidelines – keep your powder – wait for a good buying opportunity that’s likely to come soon.

The McClellan Summation Index continues to show the market in a clear downtrend heading towards lower prices. When the time is ripe, we will be looking to take some large bets in a diversified portfolio of dividend-paying, Blue Chips equities in the form of actively-traded Exchange-Traded Funds. In addition, we will also look to take a solid position in the QQQs which are likely to be the speculative leader in the next rally.

My simple idea is to place 80% of trading funds designated for equities in SPY and DIA and 20% in the QQQ.

As far as total funds are concerned, I would place 80% in equities and 20% in high-yielding corporate bonds.

But first, the market needs to feel more pain! Maximum pain needs intensity, frequency, and duration. We haven’t reached that point yet.