Wall Street Craps – 2012 Global Ebook Finance Award-Winner

STOCK MARKET OBSERVATIONS FOR May 10, 2015: The stock market rallied on Friday into its projected Bradley Turn Date for May 10th. Whether this pans out or not will be quite interesting as the market’s pattern unfolds in the coming weeks. On the technical side, internal breadth indicators are now in “neutral” positions with last week’s volatility. This means that the market is in the position of going in either direction with equal probabilities. So until there is a clear breakout, the market remains in the tight trading range that’s been in place for the entire year.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 49 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 50 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 51 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 52 (neutral)
• S&P 500 Bullish Percent Indicator – Ultimate Indicator – 23 (Oversold)
• Volatility Indicator – Ultimate Indicator – 53 (neutral)

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ADVICE TO TRADERS AND INVESTORS: The only clearly oversold Exchange-Traded Funds as far as the Money Flow Indicator is concerned is the TLT (Barclay’s 20+ year U.S. Treasury Bond Fund) and the PGF (PowerShares Financial Preferred Stock Fund). This seems counter-intuitive based on the popular perception that interest rates will be rising shortly. Otherwise, this again appears to be a time to stay on the sidelines and away from the risk of this indecisive general market.

STOCK MARKET OBSERVATIONS FOR May 3, 2015: The stock market dropped slightly this past week creating some semi-oversold breadth readings. But Friday’s “gap up” rally, has put the market back in the mid-range of the internal oscillators. A smart trader/investor should be ready for another retest of the highs in the coming week. And while the Dow Jones Industrial Average may achieve a new closing high, the chances are good that the market will not move much past that number. With the yield on the 10-year Treasury Note going higher, it is creating a slow shift from bullish to bearish in the underlying stock market.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 38 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 40 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 36 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 38 (neutral)
• S&P 500 Bullish Percent Indicator – Ultimate Indicator – 28 (Oversold)
• Volatility Indicator – Ultimate Indicator – 51 (neutral)

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ADVICE TO TRADERS AND INVESTORS: This would be another time to stay out of the market or lighten up on positions as the old highs in the indices are challenged. On the other hand, if the market was to decline in the next several sessions, we could be presented with a short-term buying opportunity. The strategy that has been most effective over the 12 months is to “buy the dips, and sell the rips.”

STOCK MARKET OBSERVATIONS FOR April 26, 2015: The stock market is at the top of its trading range right now. While the Nasdaq and S&P 500 are reaching new highs, the Dow Jones Industrial Average and Dow Jones Transportation Average have yet to confirm. With all six of the internal breadth indicators listed below in neutral positions, the general market has room to go in either direction. This is a time to step back and let the market determine its own course. With the release of Apple’s earning on Monday, we could get our answer real soon.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 44 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 45 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 45 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 45 (neutral)
• S&P 500 Bullish Percent Indicator – Ultimate Indicator – 58 (neutral)
• Volatility Indicator – Ultimate Indicator – 58 (neutral)

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ADVICE TO TRADERS AND INVESTORS: There are no trades in sight except for possible accumulations of precious metals on further weakness in the coming weeks. While it may not be the final bottom for these issues, a policy of dollar-cost averaging may be a smart way to play the GDX, GLD, and/or SLV Exchange-Traded Funds. These ETFs are gradually approaching the lower end of their trading ranges where they should all find support. Of these issues, I prefer the GDX because it has the highest average daily volume and greatest volatility.

STOCK MARKET OBSERVATIONS FOR April 19, 2015: The stock market challenged the previous highs on Thursday before dropping into the end of Friday’s session. What looked like a breakout to the upside is now threatening to be just the opposite – a breakout to the downside. But most of the internal indicators are approaching oversold levels. These indicators tend to be a couple of days early so that a trading bottom appears to be more than a week away at best. This is a time in which a smart market player waits for a deeply oversold bottom before committing any funds.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 36 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 36 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 37 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 37 (neutral)
• S&P 500 Bullish Percent Indicator – Ultimate Indicator – 65 (neutral)
• Volatility Indicator – Ultimate Indicator – 52 (neutral)

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ADVICE TO TRADERS AND INVESTORS: Be ready for a short-term bounce on further weakness during Monday’s or Tuesday’s session. You can take small bets on the following leveraged broad-based ETFs for fast money: SSO, DDM, QLD.

Otherwise, it is best to wait for oversold readings in the Full Stochastics Indicators for the DIA, SPY, QQQ, and IWM Exchange-Traded Funds which are just now beginning their decent downwards.

STOCK MARKET OBSERVATIONS FOR April 5, 2015: The stock market climbed and dropped last week putting all of the internal breadth indicators in neutral positions. With the negative jobs reports on Friday, expect the stock market to begin the week with an initial sharp downward move. But don’t be surprised if this spike down is completed by late Wednesday and the start of another “V-Shaped” bottom takes shape. This has been the pattern over the last several months as the hedge funds, computer trading, and institutions compete for performance.

Key underlying market indicators show the following:

• NYSE Breadth Oscillator – Ultimate Indicator – 52 (neutral)
• NYSE Overbought/Oversold Indicator – Ultimate Indicator – 52 (neutral)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 48 (neutral)
• Nasdaq Overbought/Oversold Indicator – Ultimate Indicator – 48 (neutral)
• S&P 100 Above 200-Day Average – Ultimate Indicator – 41 (neutral)
• Volatility Indicator – Ultimate Indicator – 44 (neutral)

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ADVICE TO TRADERS AND INVESTORS: Be ready to act on weakness during either Wednesday or Thursday as the oscillators approach oversold readings. This could be the beginning of another V-Shaped bottom with a short, but violent rally over the near term. You can take small bets on the following leveraged broad-based ETFs for fast money:  SSO, DDM, QLD

STOCKS NEAR OR AT THE BOTTOM: MSFT

EXCHANGE-TRADED FUNDS NEAR OR AT THE BOTTOM: IYT

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.