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WALL STREET CRAPS MARKET STRATEGY – JUNE 14, 2015

June 13th, 2015 Comments off

craps front coverSTOCK MARKET STRATEGY FOR June 14, 2015: The stock market declined into last Tuesday’s bottom and then rallied sharply for the next two sessions. The “5-Day Retest Rule” from my book implies that an important intermediate bottom could occur on a hard drive down towards last week’s low especially if it is accompanied by obvious bad news. So if Monday closes with a news-influenced sharp decline, be ready to pull the trigger and go long on early weakness Tuesday. Just remember to limit your risk by only buying broad-based, actively-traded ETFs incrementally.

Key underlying market indicators show the following:

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ADVICE TO TRADERS AND INVESTORS: If the market declines early next week (Tuesday or Wednesday), we should be prepared to “catch the falling knife” with gradual buying on the way down. That’s because the pattern of last few years has been for markets to make only “V-Shaped” bottoms. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up.

WALL STREET CRAPS STOCK MARKET OBSERVATIONS – JUNE 7, 2015

June 6th, 2015 Comments off

craps front coverSTOCK MARKET OBSERVATIONS FOR June 7, 2015: The stock market has declined to a point where its next move may be a reversal to the upside. During this past week, some key breadth indicators reached deeply “oversold” levels. All that remains is for the market to make another move to the downside on obvious bad news. That would set up the reversal and rally we have been anticipating. But be careful here as well. There is an alternative strong case for the market going on another leg down.

Key underlying market indicators show the following:

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ADVICE TO TRADERS AND INVESTORS: If the market declines next week (Tuesday, Wednesday or Thursday), we should be prepared to “catch the falling knife” with gradual buying on the way down. That’s because the pattern of last few years has been for markets to make only “V-Shaped” bottoms. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ, IWM) as there is no telling which sectors will perform best. However, the transportation sector does appear to have bottomed and its IYT Exchange-Traded Fund should offer some downside protection.

IMPORTANT NOTE: Although the current correction has been long enough in terms of time or duration, it has not done enough in terms of extent or price erosion. This shallow downtrend would appear to need a spike down to support levels around 17600 in the Dow Jones Industrial Average.