Wall Street Craps – 2012 Global Ebook Finance Award-Winner

STOCK MARKET OBSERVATIONS FOR March 29, 2015: The stock market declined for 7 trading sessions in early March. Then it declined for 7-8 days in mid-March. After declining for most of last week, the rhythm of the market implies that we should hit a short-term bottom on either Tuesday or Wednesday of this coming week. Expect the hedge funds & computers to jump the gun and cause a gap up opening when they decide it’s time to rally. So the best time to take positions for a ride back up to challenge the old highs will probably be during the last hour of trading in a quiet market.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 44 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 43 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 38 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 38 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 39 (neutral)
• Volatility Indicator – Ultimate Indicator – 43 (neutral)

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ADVICE TO TRADERS AND INVESTORS: The internal indicators are not quite at oversold readings so expect further weakness early in the coming week. I expect the last hour of trading to be the best time to establish positions on either Tuesday or Wednesday in the following Exchange-Traded Funds:  QQQ, DIA, IWM, SPY, SSO, DDM

STOCKS NEAR OR AT THE BOTTOM: BAC, CSCO

EXCHANGE-TRADED FUNDS NEAR OR AT THE BOTTOM: XLB

STOCK MARKET OBSERVATIONS FOR March 15, 2015: The stock market reached an oversold condition in the majority of indicators on Wednesday March 11th. In the following days, the market traced out a zig-zag pattern that often precedes an advance. Barring any extreme bad news, the market favors a return to its previous highs. Most of the indicators listed below are coming off of their lows and are expected to return to the top of their oscillators – implying a retest of the old highs.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 39 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 41 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 45 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 48 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 28 (Oversold)
• Volatility Indicator – Ultimate Indicator – 39 (neutral)

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ADVICE TO TRADERS AND INVESTORS: The stock market could spend a few more days retesting last Wednesday’s bottom before embarking on a retest of the old highs. Traders may consider taking new positions on any weakness in the beginning of the week with the intention of holding until it meets resistance near the old highs. A target date for the next high is around March 23rd. After that date, we could have another moderate decline on a failed retest of the old highs. Therefore, this next rally may serve more as a time to lighten up on long positions for longer term investors.

STOCKS NEAR OR AT THE BOTTOM: CVX, INTC, IBM, MSFT, MRK, PEP

EXCHANGE-TRADED FUNDS NEAR OR AT THE BOTTOM: SLV, CVY, GLD, XLB, XLE, XLU, TDIV

STOCK MARKET OBSERVATIONS FOR March 8, 2015: The stock market declined last week after having corrected sideways the previous one. Many of the oscillators are reading “oversold” which allows for a bounce in the next day or so. But most of the individual stock oscillators are in the middle of their price corrections. This would lead me to conclude that the most likely path for the market is a quick bounce on Monday or Tuesday followed by a lower low later in the week or the beginning of the next week.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 17 (Oversold)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 20 (Oversold)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 27 (Oversold)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 30 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 22 (Oversold)
• Volatility Indicator – Ultimate Indicator – 39 (neutral)

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ADVICE TO TRADERS AND INVESTORS: Nimble traders may want to buy into early weakness on Monday for a good bounce early in the week. Otherwise, you can probably wait for a lower low either late in the week or early next week. By next week, there should be lots of quality stocks with oversold readings worth buying.

STOCKS AT THE BOTTOM: None

EXCHANGE-TRADED FUNDS AT THE BOTTOM:  SLV

STOCK MARKET OBSERVATIONS FOR March 1, 2015: The stock market climbed to new highs last week on perceived good news from the Fed. A retest of this most recent high is likely this coming week. Whether that retest is with strength or not will determine if the area we are now in is actually a “top.” With the majority of indicators trending lower in “neutral” positions, the stock market could be performing a “sideways correction” where prices don’t come down much, but breadth does.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 43 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 46 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 44 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 29 (Oversold)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 32 (neutral)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 56 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 62 (neutral)
• Volatility Indicator – Ultimate Indicator – 75 (Overbought)

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ADVICE TO TRADERS AND INVESTORS: The market could reach a trading opportunity soon provided that the majority of indicators become “oversold.” That could happen in the next week or so in the event that we don’t get an immediate retest of the most recent top. If instead we get an immediate retest of the last high, then traders should be ready to sell into strength unless the move up has renewed power (volume) to it. But overall, the best strategy of the last few years has been to “buy the dips and sell the rips.”

STOCKS AT THE BOTTOM: No stocks or ETFs have any Money Flow Indicator or Relative Strength Indicator buy signals at this time.

STOCK MARKET OBSERVATIONS FOR February 23, 2015: The stock market reached new closing highs on Friday and still is not “overbought” across the board. This would imply that the rally still has a few more days of upside before correcting or hesitating. In any case, I would expect a retest of any new  closing high in 5 trading sessions. It is good to remember that this last rally was not started from an “oversold” condition. Thus, the buying power to fuel any more upside action would seem to be limited – a time to sell rather than buy.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 59 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 60 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 67 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 65 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 79 (Overbought)
• Volatility Indicator – Ultimate Indicator – 73 (Overbought)

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ADVICE TO TRADERS AND INVESTORS: The advice remains the same as last week’s: Wait for the next set-up in the market. The motto that has worked for the last 6 months is to “buy the dips and sell the rips.” And now we are near the crest of the most recent “rip.” So be careful if you’re betting on the upside. And be patient, if you’re betting on the downside. As for me, I’m looking at oversold set-ups in sectors that are operating independent of the general market.

STOCK MARKET OBSERVATIONS FOR February 16, 2015: The stock market has zig-zagged its way to the top of its trading range, yet has not created an “overbought” condition. This bodes well for a possible breakout to the upside. The only flies in the ointment are the Dow Jones Transportation and Utility Averages. At this point, it is not a good time to “Buy” but instead it’s one in which a wise stock player steps aside and lets the market create the next “oversold” condition. Remember that this rally was not started from an “oversold” condition and thus should not have enough power to break through to the upside. We shall see.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 55 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 56 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 63 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 62 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 72 (Overbought)
• Volatility Indicator – Ultimate Indicator – 68 (neutral)
• Dow Jones Transportation Index – Full Stochastics Indicator – 70 (neutral)

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MY ADVICE TO TRADERS AND INVESTORS: Wait for the next set-up in the market. The motto that has worked for the last 6 months is to “buy the dips and sell the rips.” And now we are near the crest of the most recent “rip.” So be careful if you’re betting on the upside. And be patient, if you’re betting on the downside. As for me, I’m looking at oversold set-ups in the GLD and IYR Exchange-Traded Funds which are sectors that are operating apart from the general market.

STOCK MARKET OBSERVATIONS FOR February 9, 2015: The stock market started its rally with an early bottom last Monday. At the time, the general market was not in an oversold condition. The upwards explosion during the rest of the week puts the market in another position to challenge the old closing highs. But with “neutral” readings in all 7 indicators listed below, the market can move strongly in either direction with the same certainty. For now, the trading range in the Dow 17000 to 18000 remains intact.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 55 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 55 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 62 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 61 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 65 (neutral)
• Volatility Indicator – Ultimate Indicator – 60 (neutral)
• Dow Jones Transportation Index – Full Stochastics Indicator – 58 (neutral)

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STOCK MARKET OBSERVATIONS FOR January 31, 2015: The stock market displayed extreme volatility during this past week with radical moves in each direction. This serves the purpose of creating fear in the hearts and minds of both traders and investors. By the end of the week, all of the internal indicators listed below had moved collectively towards “neutral” readings below 50. Expect a short-term buying opportunity as soon as a majority of these indicators strike below the “30” reading. This could easily happen within the next 10 trading sessions.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 46 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 45 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 45 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 48 (neutral)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 45 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 46 (neutral)
• Volatility Indicator – Ultimate Indicator – 43 (neutral)
• Risk On/Risk Off Indicator – Ultimate Indicator – 38 (neutral)
• Stocks vs. Bonds Indicator – Ultimate Indicator – 42 (neutral)

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STOCK MARKET OBSERVATIONS FOR January 25, 2015: The stock market presented two short-term buying opportunities during the past week for a ride back up to challenge the old highs. Now that we are in “middle ground” with all seven of the indicators below at “neutral” readings, the market can go in either direction with the same level of certainty. This appears to be one of those times where the market is churning while looking for new strength or further weakness to come in.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 59 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 57 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 58 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 53 (neutral)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 48 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 53 (neutral)
• Volatility Indicator – Ultimate Indicator – 65 (neutral)
• Risk On/Risk Off Indicator – Ultimate Indicator – 58 (neutral)
• Stocks vs. Bonds Indicator – Ultimate Indicator – 54 (neutral)

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STOCK MARKET OBSERVATIONS FOR November 30, 2014: The stock market has now reached the point of exhaustion to the upside. The last two new closing Dow highs have been contained within the intraday highs that were achieved in the week before. This means that the general market should correct either sideways or to the downside in the coming week to ten days. That process has already begun in many individual stocks. But this could easily lead up to a short-term buying opportunity in mid-December for a quick ride back to the top by year’s end.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 45 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 46 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 58 (neutral)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 58 (neutral)
• S&P 100 % Above 200 Day Moving Average – Ultimate Indicator – 50 (neutral)
• Risk On/Risk Off Indicator – Ultimate Indicator – 31 (neutral)
• Volatility Indicator – Ultimate Indicator – 56 (neutral)

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Personal Note: I’m watching Equity-Only Put-Call Ratios with great interest now. With this past Friday’s 13th successive new closing high in the Dow Jones Industrial Average, we have now arrived at the optimal point of “buying” exhaustion. The top of this move may become a mirror-image of the most recent bottom – turning on a dime and never looking back. So be careful out there. In the wise words of Art Cashin, UBS Director of Floor Operations at the NYSE, “Stick with the drill: stay wary, alert and very, very nimble

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