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WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR JANUARY 25, 2015

January 25th, 2015 Comments off

craps front coverSTOCK MARKET OBSERVATIONS FOR January 25, 2015: The stock market presented two short-term buying opportunities during the past week for a ride back up to challenge the old highs. Now that we are in “middle ground” with all seven of the indicators below at “neutral” readings, the market can go in either direction with the same level of certainty. This appears to be one of those times where the market is churning while looking for new strength or further weakness to come in.

Key underlying market indicators show the following:

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My advice for traders and investors is to either maintain only light positions in broad-based Exchange-Traded Funds such as DIA, QQQ, and SPY or be out of the market entirely waiting for a bottom. If the market should decline from here, look to add to positions as the general conditions becomes more oversold.

WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR JANUARY 19, 2015

January 19th, 2015 Comments off

craps front coverSTOCK MARKET OBSERVATIONS FOR January 19, 2015: The stock market reached a slightly oversold level on Thursday’s close on the 15-day TRIN Index. This index showed that 12 out of the previous 15 sessions registered a disproportionate amount of selling volume compared to issues traded. But this indicator was only confirmed by a few other oversold/overbought oscillators. Thus, the general market could experience another short-term rally to challenge the old closing highs. Whether, this rally has enough staying power or not is the big question on the minds of investors.

Key underlying market indicators show the following:

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Special Notes: The market did present a buying opportunity during the early fade on Friday morning. So don’t be surprised if Tuesday opens strongly in either direction as big money moves quickly from asset class to asset class. At such times, there is both risk of losing money and risk of losing out on an opportunity. This might be a time to simply sit things out until the markets stabilize or at least retest more clearly-defined levels such as the 200-Day Moving Average or recent cyclical bottoms.

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My advice for traders and investors is let the market set-up for the next trading opportunity or take a small long position on a quiet opening early in Tuesday’s session. Either way, I believe that it will not be prudent to make a large bet on the direction of the general market at this time.

WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR JANUARY 10, 2015

January 10th, 2015 Comments off

craps front coverSTOCK MARKET OBSERVATIONS FOR January 10, 2015: The stock market dropped for 7 straight sessions from early to mid December. It then turned around and rallied for a matching 7 sessions. On this most recent decline, the market plunged 6 days before making a “V-Bottom” and surging ahead on Wednesday and Thursday. This violent price action suggests that we could have more of these types of moves in the coming days. The ideal strategy now would be to “buy the dips and sell the rips.” The only trick is to be one step ahead of the “quants.”

Key underlying market indicators show the following:

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Special Notes: The 7 key indicators listed above all have neutral readings after nearly reaching deeply oversold levels. This is a reminder to traders like me that the market rarely gives perfect readings where every single indicator flashes an “all-clear” signal at the same time. Legendary technician, Joseph Granville, used to say that the market always leaves a “hook” that causes someone to postpone action. And that’s why I separate my indicators between NYSE and Nasdaq just in case one major market sector gives a signal before the other and, thus, an early opportunity to act without full confirmation. Without complete certainty from the readings of technical indicators, the fast action of the market forces smart traders to do three things:  1. Take smaller position sizes, 2. Buy only broad-based highly-active ETFs, and 3. Hold for shorter periods of time.

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My advice for traders and investors is let the market set-up for the next dip or trading opportunity in the coming week. I’d be on the lookout for an quick return to the downside in order to retest last Tuesday’s bottom. That retest could be successful and result in another big move to the upside. But you’re going to have to be able to pull the trigger quickly on this one as the time to buy may be intraday on Tuesday. I would reduce my risk through diversification by selecting any of the following Exchange-Traded Funds as your primary trading vehicles: DDM, SSO, DIA, SPY, QQQ

WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR JANUARY 4, 2015

January 4th, 2015 Comments off

craps front coverSTOCK MARKET OBSERVATIONS FOR January 4, 2015: The stock market dropped for 7 straight sessions from early to mid December. It then turned around and rallied for a matching 7 sessions. If the current pattern holds, a near-term bottom could materialize around Wednesday January 7th. If the general market declines sharply into an “oversold” condition as we approach mid-week, it might be a good time to take new trading positions for a quick ride back up to test the old closing highs.

Key underlying market indicators show the following:

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Special Notes: The 7 key indicators listed above are all below the reading of 50 after being in “overbought” areas only a week ago. Having traversed across the oscillators in each separate indicator, we could easily reach “oversold” readings if we should have just 2 or 3 days of weakness at the beginning of this coming week.

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My advice for traders and investors is let the market set-up for the next dip or trading opportunity in the coming week. It could result in a sharp rally to retest the old highs set last Monday. I’d stay diversified for this projected rally in any of the following Exchange-Traded Funds: DDM, SSO, DIA, SPY, QQQ (Note: select only the ones that have oversold readings)