“Staring at the screen all day is counterproductive. He believes that watching every tick will lead to both selling good positions prematurely and overtrading. He advises traders to find something else (preferably productive) to occupy part of their time to avoid the pitfalls of watching the market too closely.”
Source: Schwager, Jack D. (2012-04-25). Hedge Fund Market Wizards. John Wiley and Sons. Kindle Edition.
Categories: Trading & Investing Quotations Tags: AAPL, investing, QQQ, stock action, stock market, stock tips, stock trading, stock trading tips, trading, trading tips, wall street
MARKET OBSERVATIONS FOR August 6, 2013: The stock market has continued its march upwards despite any rest for over a month. Expect this winning streak to continue until we see some obvious non-confirmations to the downside. For now, it looks like any near-term correction could create a quick oversold condition for another ride to new highs. The last phase of this advance should see strength in the DOW and QQQ Indexes while breadth weakens. This has not happened yet.
Key market indicators show the following:
For now, my advice for traders is to buy into any dip that corresponds to an oversold reading. This current rally has its doubters and will continue to “climb a wall of worry” until the bears capitulate. The most recent highs appear to have been strongly confirmed which gives the market more weeks to the upside.
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The indicators for Apple (AAPL) read as follows:
- Current price: 469.45
- Relative Strength Indicator = 74 overbought
- Ultimate Indicator = 69 almost overbought
- Money Flow Indicator = 65 neutral
- 200-Day Moving Average = 465
The stock of Apple is finally broke decisively above its 50-Day Bear Market Moving Average. That means that this moving average no longer applies to the nature of the stock. A new “Bull Market Moving Average” will eventually form as the stock of Apple shifts to its new phase. But at this time, it cannot be determined what time frame the new moving average will get in sync with. But for now, a smart trader will be looking for a correction in the stock in order to ride this new phase upwards. That signal will probably come from an oversold condition in the Money Flow Indicator or Relative Strength Indicator.
MARKET OBSERVATIONS FOR July 17, 2013: The stock market has been pushing upwards with an absence of fear. It is now at the top of its trading range in an environment of investor euphoria. While this may not signal the end of the bull move, it should mark the general end of this current cycle. I’m sure that the first correction down from here will be met by dip buyers. But it’s the nature of the next rally that will determine whether the market has the strength to push to new highs or retreat to the lower-to-middle part of the trading range. But don’t be surprised if you look back at this time period and wish that you had sold out.
Key market indicators show the following:
For now, my advice for traders is to buy into any dip that is triggered by obvious bad news for a quick ride to test the recent highs. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO. The NYSE Summation Index shows that the market should be strong for several more weeks. But for most investors, this time period represents a period in which to lightened up on existing long positions.
Projected Final High: Tuesday July 23
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The indicators for Apple (AAPL) read as follows:
- Current price: 430.20
- Relative Strength Indicator = 56 neutral
- Ultimate Indicator = 60 and heading higher
- Money Flow Indicator = 61
- 50-Day Bear Market Moving Average = 427
The stock of Apple is finally above its 50-Day Bear Market Moving Average. It is also right in the middle of its price pivot points. But given its Money Flow Indicator pattern of cyclical lows, I’d bet that new lows for the stock are some 3 months away. That also means that it probably has at least one more good month of advance in it. This stock may continue to move independently of the general market.
MARKET OBSERVATIONS FOR July 10, 2013: The stock market continues to climb the proverbial “wall of worry” on the hope of reassuring news from the Fed. This current rally is in the position to challenge the market’s previous highs and may even surpass those May readings. But overall, this appears to be a time to wait for a pullback before it embarks on its challenge of the old highs.
Key market indicators show the following:
For now, my advice is to buy into any dip that is triggered by obvious bad news. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO. The NYSE Summation Index shows that the market should be strong for several more weeks.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 50 neutral
- Ultimate Indicator = 58 and heading higher
- Money Flow Indicator = 29 with lots of room to move to the upside
- 50-Day Bear Market Moving Average = 427
The stock of Apple is in a position to go in either direction but seems to have an upwards bias. I was hoping for a retest of the old lows but got surprised by a Wall Street analyst’s “strong buy” recommendation that moved the stock up sharply for several days. It has since retraced some of those gains, but may be ready to rally again shortly.
MARKET OBSERVATIONS FOR July 10, 2013: The stock market reached a short-term bottom last Monday morning. Normally, one would expect a retest of that bottom in about 5 to 7 days. Therefore, we would expect some weakness on Monday and/or Tuesday as that retest. We had 3 days up from the bottom and can anticipate an equal 3 days down in this simple time symmetry. But the Summation Index clearly shows that we have already arrived at an intermediate term bottom and that smart traders/investors should get on-board for another bull run that will climb the proverbial “wall of worry.”
Key market indicators show the following:
For now, my advice is to buy into any weakness at the beginning of the week. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 26 (buy signal under 30)
- Ultimate Indicator = 33 (buy signal under 30 which it was on Thursday’s close)
- Money Flow Indicator = 6 (buy signal under 20)
This means that the stock of Apple is now in a buy zone and time to start accumulating. While it would appear that a test of the previous lows around 383 can be expected, we’ve learned to expect the unexpected when it comes to this stock. With a 3% dividend, an investor will get paid to wait on this unpredictable stock.
MARKET OBSERVATIONS FOR June 12, 2013: The stock market reached a short-term bottom last Thursday morning. That bottom is about to be tested one week later which coincides with tomorrow. With extreme readings in the NYSE Breadth Oscillator over the past week, it is entirely likely that tomorrow will present a buying opportunity before the next leg up to new highs.
Key market indicators show the following:
For now, my advice is to buy into weakness in oversold stocks or indexes with high positive correlations. Exchange-traded funds to buy would include DIA, SPY, QQQ, SSO. Oversold stocks to consider would include QCOM, BRCM, IYR.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 42
- Ultimate Indicator = 38
- Money Flow Indicator = 44
This means that the stock of Apple is mid-ranged and can go in either direction. There isn’t any pressure on the stock to go in one direction verses the other. I’d personally stay away from this issue until one or more of its indicators show that it is oversold again.
MARKET OBSERVATIONS FOR May 13, 2013: The stock market reached new highs during this past week which were largely confirmed by other major indicators. But it wasn’t necessarily overwhelming strength across the board. This could be setting up the “head” of a potential “head and shoulders” top. That said, it implies that the topping process has much more time to chew up before getting anywhere near a full-blown declining phase. I’d look instead for the market to correct into another buying opportunity for a ride up into an overbought condition as it forms its right shoulder.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. It could be an oversold condition on the next decline which would set up a short but profitable ride up into its next overbought condition. If we get a few more closing highs that is not confirmed by strength, we could reach a point of exhaustion to the upside.
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As for Apple (AAPL), it’s the same advice as last week. The stock has finally broken above its Bear Market Optimized 50-Day Moving Average. After hitting its price pivot points in the 417-392 range, the stock of Apple rallied enough to end its Bear Market. But it doesn’t automatically mean that the stock will go into an instant bull market. Instead, the stock of Apple could remain in a neutral position while it “backs and fills” in order to form a stronger base for a more sustainable rally. I’d be looking to gradually accumulate the stock on a retracement into the 423-400 price range.
MARKET OBSERVATIONS FOR May 6, 2013: The stock market reached a new closing high on Friday. This blog anticipated this new high to be full of non-confirmations across the board. But this did not materialize. Instead, this new high was indeed confirmed by strength in the NASDAQ and neutral sentiment readings. Expect the rally to extend another 2-5 weeks at a minimum until a new high is reached in the Dow that is not confirmed by corresponding strength in other key areas.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A short term top could materialize in the next or so. The resulting decline could present us with a buying opportunity in the tech sector. But in the meantime, the stock market continues to “climb a wall of worry.”
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As for Apple (AAPL), the stock has finally broken above its Bear Market Optimized 50-Day Moving Average. After hitting its price pivot points in the 417-392 range, the stock of Apple rallied enough to end its Bear Market. But it doesn’t automatically mean that the stock will go into an instant bull market. Instead, the stock of Apple could remain in a neutral position while it “backs and fills” a stronger base for a more sustained rally. I’d be looking to accumulate the stock on a 50% retracement into the 424-403 price range.
MARKET OBSERVATIONS FOR APRIL 29, 2013: The stock market may be headed to its final closing high in the Dow Jones Industrial Average. It is approaching overbought levels while remaining 150 points below its previous high. From a technical standpoint, the final closing high in the Dow Jone Industrial Average while not be confirmed by the majority of other key indicators or averages. Be on the lookout for this final solo march up by the Dow. On the other hand, if the Dow does have support from the majority of other averages, then this rally can continue higher into June.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A major top could be ahead of us shortly. But the neutral sentiment readings cause me to think that the market still needs more time on the upside. Stay flexible and read the market as it moves in either direction for clues.
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MARKET OBSERVATIONS FOR APRIL 15, 2013: The stock market continues to climb the proverbial “wall of worry” and in the process causing short-sellers to throw in the towel. But with a few key oscillators near sell levels, I would expect a short correction in the near term. That would be followed by an upside test of the recent highs. That next rally should probably tells us whether it is the last move in this rally or if there is more to go. I wouldn’t rule out the idea that the current rally could last into June.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A short-term top is only a few trading sessions away. That could lead to a short & sharp dip that may be worth buying into. But it appears that the upside is generally limited from this point on.
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As for Apple (AAPL), the stock has drifted back down towards it base around 420. Meanwhile, the Bear Market Optimized Moving Average for Apple stands at 451. The price pivot points looks for a possible move to the 417-392 range. It may take such a move in order to get the last weak hands to give up their stocks to stronger long-term hands. After such a time, the good news will follow about the next dividend boost resulting in a new Apple advance. Be patient and wait for a possible move into this lower price range.