STOCK MARKET STRATEGY FOR MARCH 25, 2020: The stock market made a bottom intraday on Monday after a prolonged decline steep decline. However, it only took two days for the short-term McClellan oscillators to become overbought. That would suggest that selling could return shortly and a test of the previous lows are in store for the end of the quarter next week.
Key underlying short-term timing indicators show the following:
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THE BOTTOM LINE: The stock market had a strong bounce from Monday’s lows, but could easily sell off again towards the end of the month/quarter. Since the general market is overbought, this may be a time to hold off on new buying with a decline possibly in store over the short-term.
The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “4” which indicates that we are in the area of an “Extreme Fear” buy signal. This is only one criteria for a trading bottom but an important one. The December 24, 2018 bottom had a reading of “2” so we are in that rare general area. Any reading below this is probably worth a trade to the long side. This indicator does not stay in this area for very long.
Categories: Fear & Greed Index, Stock Market Strategy, Stock Market Timing Tags: invest, investing, investing tips, investments, retirement, SPY, stock action, stock market, stock market timing, stock trading
STOCK MARKET STRATEGY FOR MARCH 7, 2020: The stock market made a key low on Friday February 28th and has had a choppy bounce since them. A retest of that low is taking place right now and there is a good chance that any weakness from here would represent a buying opportunity for a short-term trade. But buying into weakness with the current news background will take nerves of steel because the retest could fail as well.
Key underlying short-term timing indicators show the following:
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THE BOTTOM LINE: The stock market may be in a position to rally strongly after some short term weaknesses. But this is not a certainty and the low may not hold with prices continuing downwards on another leg. For many swing traders and investors, this may be an opportunity to pass on or play very lightly.
Categories: Stock Market Strategy, Stock Market Timing Tags: invest, investing, investing tips, investments, retirement, SPY, stock action, stock market, stock market timing, stock trading, stock trading tips