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WALL STREET CRAPS STOCK MARKET STRATEGY – JULY 31, 2016

July 31st, 2016 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JULY 31, 2016: The stock market has been chewing up time and consolidating its gains from the Brexit lows. The internal indicators show that the general market is within reach of oversold readings. This presents an interesting situation where the price levels would appear to be too high, but the internal market shows that it’s getting set up for more upside. At the very least, I’d expect a retest of the previous highs and show us clues of either strength or weakness. Until then, the market can go in either direction with equal probabilities.

Key underlying short-term market indicators show the following:

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THE BOTTOM LINE: The stock market is in a position to go in either direction. A good case can be made for each. I’d expect another quick test of the previous highs with the anticipation of weakness on that retest. This would set up a correction in mid-to-late August that most traders would want to avoid holding long positions. But at this time, there doesn’t appear to be good high-probability trading opportunities for either long or short major market indexed positions.

WALL STREET CRAPS STOCK MARKET STRATEGY – JULY 23, 2016

July 24th, 2016 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JULY 23, 2016: The stock market continues to push higher making new consecutive closing highs. The Dow ended up with 7 new highs in a row before backing off the last two days. A new closing high may signal the point of exhaustion if it is not confirmed by strength in other major indices. From there, we could start the decline to correct the advance from the February lows. This means that further strength should be sold into while buying needs to wait for the next oversold condition.

Key underlying short-term market indicators show the following:

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THE BOTTOM LINE: The stock market appears to be near the point of exhaustion, but not in a way that a prudent trader would want to short. The most likely scenario is for the markets to chew up time by backing and filling in terms of price action. That type of market behavior would frustrate most traders and investors. So while we may not go up much from here, it doesn’t mean that we’re headed straight down either. I would advise stepping aside and waiting for the market to set itself up for the next big move in whichever direction it chooses.

WALL STREET CRAPS STOCK MARKET STRATEGY – JULY 17, 2016

July 17th, 2016 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JULY 17, 2016: The stock market has made 4 consecutive new closing highs in the Dow Jones Industrial Average. This leg of the rally is near the point of exhaustion meaning that a dip or correction is likely to occur soon. With the majority of indicators in neutral positions, the general market can still go in either direction. But it would be smarter to wait in order to take on new positions. The momentum is clearly on the bullish side so buying the dips is the optimal trading strategy.

Key underlying short-term market indicators show the following:

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THE BOTTOM LINE: The stock market washed out all the pessimism on the Brexit panic which left the market with only one way to go and that was up. If that Brexit bottom was in fact a cyclical low, the market from a time perspective has a lot more time to advance. The next similar bottom is most likely several weeks away. While it may be tough to buy here, it would be smart to wait for a dip and add new positions then. Otherwise, you can wait for a better bottom in the fall even if that should occur at higher prices.

WALL STREET CRAPS STOCK MARKET STRATEGY – JULY 4, 2016

July 3rd, 2016 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JULY 4, 2016: The stock market was an amazing roller coaster ride is past week. In the end, the internal indicators that I follow most closely are all a few days away from becoming overbought. This means that there is a little more room to the upside (100-300 DJIA points), but most likely it’s too late to buy. Instead, use near-term market strength to lighten up positions with a likelihood of a better low-risk entry point later in the summer or early fall.

Key underlying short-term market indicators show the following:

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THE BOTTOM LINE: The stock market proved to be a tricky place to be last week after two straight down days were followed by 4 straight up days. With this kind of volatility, you certainly don’t want to be on the wrong side of a trade. Right now, we are not anywhere close to an entry point so one should hold their positions and look to sell overbought/overvalued positions. It will take some time in order to set up for another buying opportunity. For most swing traders, this is a time to sit out.

Note: Previous closing highs for the Dow Jones Industrial Average were 18312 in May 2015 and 18096 in April of this year. A final closing DJIA between those marks should probably mark the end of this rally from the February 2016 lows.