STOCK MARKET STRATEGY FOR NOVEMBER 30, 2015: The internal breadth indicators are now turning down after reaching the overbought area this past weekend. A likely set-up would be for the market to continue to correct as the breadth indicators move their way down into an oversold condition. It may take another week or so for that to transpire. If it does correct in that fashion, then we will have an oversold buying opportunity as a set-up before a “Santa Claus Rally.” Expect that bottom somewhere between December 10th-18th.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The market appears to be turning down after its last rally. Expect an oversold condition during the second week in December as a good spot to go long in anticipation of a strong “Santa Claus Rally” to end out the year.
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STOCK MARKET STRATEGY FOR NOVEMBER 22, 2015: The stock market rallied sharply from the oversold condition that was described in last week’s post. At the present time, the market is neither oversold or overbought. The neutral readings of breadth indicators imply that the market can go in either direction from here. The odds favor a “Santa Claus Rally” in December which means that we should anticipate one more return to an oversold condition sometime in early-to-mid December.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The market presented a buying opportunity at the last oversold condition on Monday’s opening. After such a robust rally, it’s probably too late to go long equities especially with resistance levels nearby, a possible negative reaction to a Fed hike, and a typical short-term December bottom preceding the traditional “Santa Claus Rally.” For these reasons, I would prefer to sell into additional strength, hedge any long positions, and keep the powder dry for a possible trading opportunity in the first half of December.
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STOCK MARKET STRATEGY FOR NOVEMBER 14, 2015: The stock market has been setting up for a trading low this past week. With the events in Paris, the market could experience a large gap opening to the downside on Monday’s opening. But with nearly all breadth indicators at historical trading lows, this “cover story” may serve to be the catalyst for a climatic bottom. Don’t be surprised if Monday proves to be an important intermediate bottom from which the “year-end rally” takes us back up to the all-time highs.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The market looks to be in the vicinity of an important trading low. While we may have one or two more down days, it may be wise to start taking pilot positions in stocks with high correlations to the upside. That would include all of the broad-based ETFs. But be careful about taking too large a position because the news could be scary while this bottom takes it form. It will be important to remain emotionally-detached during this trading period and control your risk.
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STOCK MARKET STRATEGY FOR NOVEMBER 1, 2015: The stock market remains near the top of its trading range while internal breadth indicators show neutral readings. While a retest of the old highs is a strong possibility, the upside appears limited and a correction of either price or time is the more probable course for the market. Until we see a clearer picture, it’s not a time to buy and more likely a time to keep your powder dry for a near-term oversold condition to develop.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The neutral breadth readings allow for a short-term buy signal with a move downwards into the end of the month. That would set up a strong “Santa Claus Rally” in December. But until we get a more clearly-defined pattern, the market is not in a buying area and more of a “hold/sell” range on further strength. So stay largely in cash and wait for a better spot to go long.
Categories: Stock Market Strategy Tags: investing, investing tips, investments, money, QQQ, SPY, stock action, stock market, stock trading, stock trading tips, stocks, tony robbins, trading, trading tips, wall street