Wall Street Craps – 2012 Global Ebook Finance Award-Winner

STOCK MARKET OBSERVATIONS FOR July 28, 2014: The stock market made another attempt at the old highs during this past week. In doing so, it pushes most of the internal breadth indicators to “neutral” readings. With a lot of negative news from geopolitical sources, the market could easily decline into a short-term oversold condition in the coming week. The kind of action that we are seeing now is typical of the topping process. My guess is that we will either get a short-term buy signal on more bad news or else make another push to new highs. But be careful here because the next closing high in the Dow Jones Industrial Average may, in fact, be the last one of this rally.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 48 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 50 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 36 (neutral)
• NYSE % Above 150 Day Moving Average – Ultimate Indicator – 34 (neutral)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 37 (neutral)
• Risk On/Risk Off Indicator – Ultimate Indicator – 32 (neutral)

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My advice for traders and investors is do nothing and let the market set itself up for its next big move. More downside here would permit the oscillators to become more oversold and present a short-term buying opportunity. When the bad news lets up from the geopolitical problems, there could be a sharp but short rally to new highs. If you’re looking to sell, do so on a less-than-strong closing high in the DJIA in the last hour.

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STOCK MARKET OBSERVATIONS FOR July 20, 2014: The stock market reached short-term oversold conditions on “obvious bad news” Thursday. A bounce on Friday has put most internal indicators in “neutral” positions. With the old highs less than 100 points away, it is certainly possible for the market to continue its march upwards to new highs. So with prices near their highs and breadth oscillators near their lows, it allows for room to travel in either direction.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 45 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 44 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 35 (neutral)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 34 (neutral)
• Risk On/Risk Off Indicator – Ultimate Indicator – 31 (neutral)

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My advice for traders and investors is do nothing and let the market set itself up for its next big move. More downside here would permit the oscillators to become more oversold and present a short-term buying opportunity. Despite the length of this rally, it still could have even more to go on the upside.

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STOCK MARKET OBSERVATIONS FOR July 12, 2014: The stock market sold off after the most recent high that was posted just prior to the July 4th holiday. This selloff has moved all four of the key breadth oscillators to “oversold” readings. This indicates that the correction is over and that a short-term retest of the recent highs is in order. We’ll be looking for confirmation or non-confirmation of the retest in order to determine if this next rally will be the last one for this phase of the market. The Equity-Only Put/Call Ratio is also very close to issuing a “sell signal” after a long gradual decline into that reading. All of this adds up to a tricky retest of the old highs with a possible top in mid-July of major importance.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 25 (oversold)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 26 (oversold)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 16 (oversold)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 28 (oversold)
• Risk On/Risk Off Indicator – Ultimate Indicator – 29 (oversold)

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My advice for traders and investors is expect a short-term rally up to the old highs that were registered on July 3rd. Some may want to play the upside here for a quick move up. But long-term funds should be held back just in case the retest of the old highs fails and a top of major importance is made in mid-July. This is next rally may be the time to exit most, if not all, of your equity positions.

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