Wall Street Craps – 2012 Global Ebook Finance Award-Winner

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:

• Investor Sentiment – Short-term = 50 neutral/Long-term = 50 neutral
• NYSE Breadth Oscillator – Ultimate Indicator reading of 26 – buy signal
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 27 – buy signal
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 33 – close to a buy
• NYSE Summation Index – Consolidating – Could be topping out here

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:

• Investor Sentiment – Short-term = 50 neutral/Long-term = 60 neutral
• NYSE Breadth Oscillator – Ultimate Indicator reading of 62 – after topping over 70
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 59 – after topping over 70
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 49 – neutral
• 21-Day Equity-Only Put-Call Ratios – Mixed signals – one is a buy, the other a sell
• NYSE Summation Index – Recently bottomed and is rallying with more room to the upside

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.