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WALL STREET CRAPS STOCK MARKET STRATEGY AUGUST 13, 2017

August 13th, 2017

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:

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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.

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