STOCK MARKET STRATEGY FOR JANUARY 29, 2017: Last week, the stock market advanced with another leg up in the Trump Rally. The internal breadth indicators are still in very “neutral” territory suggesting that there is more room to run on the upside. However, the “Volatility Indicator” is in the “overbought” area and puts a cap on how long the rally can continue. So I’d be looking for another rally in the short-term, but with a bigger chance of a correction in February to cool the jets of euphoric traders.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Index is currently reading “Greed” which means that it still has lots more room to the upside before it reaches “Extreme Greed” territory. The market looks like it will continue to climb the proverbial “wall of worry” as it refuses to correct and offer an “oversold” reading in the 4 breadth oscillators that are shown above. If the market were to correct or stall, then any “oversold” readings would be a time to “buy the dip” in a broad-based ETF for a continuing ride up.
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STOCK MARKET STRATEGY FOR JANUARY 22, 2017: The stock market sold off modestly in the days before Inauguration Day. The majority of internal indicators are in “neutral” positions allowing the market to go in either direction from here. The sentiment of caution may equate to a stock market that climbs the proverbial “wall of worry.” In this case, the rally will continue to push upwards without an oversold condition to allow traders and investors to enter the market at lower risk.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: Just like last week, the Fear/Greed Sentiment Index is in the “neutral” area meaning that the emotional barometer of the market is neither too bullish or too bearish. When this happens be prepared for the market to go in either direction. My hunch is that volatility will return to the market shortly and present more trading opportunities as the uncertainty around the Trump Administration causes both fear and euphoria in the psychology of market participants. But my overall market strategy until proven otherwise is simply to “buy the dips” and stay diversified.
Note: Timing the dip would be either oversold readings in the majority of internal indicators, a bounce off of the 200-day moving average of the DIA Exchange-Traded Fund between 184-186 or the SPY Exchange-Traded Fund between 213-215.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR JANUARY 15, 2017: The stock market continues to hold near the top of its trading range. There is a lot of anticipation as to whether we will get a new high in the Dow Jones Industrial Average or if we sell off after the Inauguration. Right now, the majority of indicators are trending down towards a short-term oversold condition. This suggests that another rally may be close at hand. It’s anybody’s guess where the market will go longer-term, but my bet is that it will continue to “climb the wall of worry.”
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Sentiment Index is in the “neutral” area meaning that the emotional barometer of the market is neither too bullish or too bearish. When this happens be prepared for the market to go in either direction. If you take a step back and look at this market, you would think that the “Trump Rally” has been largely discounted into the price of equities. On the other hand, you have to ask “Where else is money going to go?” It looks to me that there is still more time left for the market to continue to rally and all oversold readings should be opportunities to “buy the dips.”
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR JANUARY 8, 2017: The stock market continues to zig-zag higher with a good chance of closing above 20,000 in the Dow Jones Industrial Average this coming week. This could be a classic trap with the euphoria surrounding the Inauguration providing the “cover story” that will convince the nervous, unsophisticated investor to buy out of the fear of missing out. While a top may be at hand, it’s still dangerous to bet on the downside as well.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Sentiment Index is currently on the border of “Greed” and “Extreme Greed.” With a couple days of rally, this indicator should be in the “Extreme Greed” area which may signal an intermediate term top. On the other hand, the internal breadth indicators are moving towards an “oversold” condition. This may mean that a short-term buying opportunity is close by and a quick, but profitable rally may set up for next week as well. If that should happen either buy the broad-based ETFs or market leaders such as Facebook, Google, Amazon, etc.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street