Archive for August, 2017


August 19th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is finally in the “Extreme Fear” range for the second day in a row at 17. This indicator is now suggesting that the general stock market is in a “buying opportunity” zone.

This is a minimum requirement for taking new positions in the general stock market. In the past, it is not unusual for market bottoms to occur when this index is under 10. But overall, the market is close to a bottom and it wouldn’t be such a bad idea to start taking positions on any further weakness even though your “palms are sweaty.”

But in times and opportunities like this, money management strategies are the key to success. In my book, Wall Street Craps: How to Play Today’s Hot & Cold Markets for Fast Money With Less Risk, I write about dividing your investing capital into “chips” or even blocks of money.

For example, if you have $100, divide this amount into 20 $5 chips. Your first bet might be $5 or $10 or 5% or 10% of your investing capital. So the present situation would be one where you make a first bet. This means that the present buying opportunity should only be 5%-10% of your investing or trading capital. This is because you may be a little early at this time and in steep market drops being early can be costly and dangerous.




August 13th, 2017 Comments off

craps front coverSTOCK MARKET STRATEGY FOR AUGUST 13, 2017: The stock market has now reached short-term oversold levels according to many internal indicators. This sets up the market for a “bounce” to higher levels. If the general market advances quickly at the beginning of the week, we may get left behind as the market would have bottomed on last Thursday. But if it should decline early in the coming week, we may be presented with a short-term buying opportunity for a quick ride up to challenge the old market highs.

Key underlying short-term timing indicators show the following:


THE BOTTOM LINE: The Fear/Greed Index is currently reading “Fear” which serves as a buying alert. My market discipline is that a buying opportunity is only acted upon once the Fear/Greed Index reaches “Extreme Fear” levels. That could occur early next week if the market should continue to decline. But since prices have not decline very much from the market highs, any buying will be in stocks or ETFs with only short-term (not intermediate-term) oversold readings.

This opportunity will not be the case of buying low and selling high, but more like buying high and selling higher. This is not the time for bottom-fishing, but instead is a time to buy only those issues with a high correlation to the general market. Or simply restrict your buying in S&P 500 and/or Nasdaq 100 equivalents.

Note: None of the broad-based ETFs in the major indices are currently oversold. This could mean that a better low may be coming later when these ETFs do become oversold.


August 11th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Greed” range at 31. This indicator is now suggesting that the general stock market is approaching a buying opportunity. That signal will be triggered by a reading below 25 in the “Extreme Fear” zone.

Thus as far as sentiment goes, an important signal may come as early as Friday or Monday. This would be a “buy the dip” strategy which one day will prove to be wrong. But this market has been really resilient to declines and until proven otherwise, I’d expect another rally to new highs to occur when this current decline ends.