Wall Street Craps – 2012 Global Ebook Finance Award-Winner

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:

• Investor Sentiment – Short-term = 60 neutral/Long-term = 60 neutral
• NYSE Breadth Oscillator – Ultimate Indicator reading of 31 – nearly oversold
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 40 – neutral
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 51 – neutral
• NYSE Summation Index – Clustering at present level showing neutral

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 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:

• Investor Sentiment – Short-term = 60 slightly overbought/ Long-term= 60 slightly overbought
• NYSE Breadth Oscillator – Ultimate Indicator reading of 60 – neutral/overbought
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 74 – overbought
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 59 – slightly overbought
• NYSE Summation Index – Clearly on a bullish path upwards after making a significant intermediate term low.

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:

• Investor Sentiment – Short-term = 50 neutral/ long-term= 50 neutral
• NYSE Breadth Oscillator – Ultimate Indicator reading of 61 – neutral/overbought
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 56 – neutral
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 51 – neutral
• NYSE Summation Index – Triple bottom and a turn at the bottom of the cycle. This indicates a change to bullish!!!

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:

• Investor Sentiment – Short-term = 30 oversold/ long-term=60 neutral
• NYSE Breadth Oscillator – Ultimate Indicator reading of 40 – neutral
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 40 – neutral
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 47 – neutral
• NYSE Summation Index – Reading of -97 – a retest of last week

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 29, 2013: The stock market reached new highs on Monday in a possible “key reversal day.” This could end up being the “internal high” for the market. With that in mind, a smart trader or investor can expect a new closing Dow high in the next one to three weeks. If that new Dow high comes without corresponding strength in other major indexes or if the market becomes overbought on its march up to a new high, then the odds are good that the final top is in. Then you could expect the long-awaited correction to begin at that time with a minimum of one month in duration & a possible 50% retracement of the previous advance.

Key market indicators show the following:

• Investor Sentiment – Short-term = 50 neutral/ long-term=70 – slightly overbought
• NYSE Breadth Oscillator – Ultimate Indicator reading of 17 – oversold buy
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 29 – oversold buy
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 52 – neutral
• NYSE Summation Index – Still only mid-range towards a major buy signal

For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. The short-term indicators are near “buy” readings so any further declines should be contained.

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The indicators for Apple (AAPL) read as follows:

• Relative Strength Indicator = 54
• Ultimate Indicator = 52
• Money Flow Indicator = 46

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 since it could just as easily go down 80 points as up.

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:

• Investor Sentiment – still neutral both short and long term but with a small move towards overbought in the long term model – a key point of note!
• NYSE Breadth Oscillator – Ultimate Indicator reading of 62 – neutral
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 70 – overbought sell!
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 74 – overbought sell!

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:

• Investor Sentiment – still neutral both short and long term
• NYSE Breadth Oscillator – Ultimate Indicator reading of 59 – neutral
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 62 – neutral
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 63 – neutral

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:

• Investor Sentiment – is still in a neutral position
• NYSE Breadth Oscillator – Ultimate Indicator reading of 68 – close to a sell signal
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 68 – close to a sell signal
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 54 – neutral
• Dow Jones Transportation Average – shows a key divergence with a second lower hig

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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THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE APRIL 20, 2013

The so-called “Apple Bear Market Optimized 50-Day Moving Average” currently stands at 443. The current price as of Friday’s close is 390. The 417-392 price range for accumulating the stock that was mentioned on the March 30th Update is now at its lower end. So based on price alone, this would seem to be a place to start buying. But in terms of the internal indicators, it may still be a little too early to do so.

(Click here for the chart for Apple)

Internal Indicators for Apple currently read as follows:

* Relative Strength Reading:  28.00 which is a buy signal under 30.00

* Ultimate Indicator Reading: 30.66 which is just barely missing the buy signal under 30.00

* Money Flow Indicator Reading: 33.77 which is a few points away from flashing a buy signal

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Based on these indicators, I would say that the stock of Apple is very close to a buy signal.  But it would take a triple buy signal for me to start accumulating the stock. I am especially cautious about buying Apple until we see a clear Money Flow Indicator buy signal well under a reading of 30. At that time, I would gradually wade into the position with the idea of trading it as it moves back up to test its dominate 50-day moving average around 440.

What I’m trying to gauge, is whether those who bought the stock last year on the much-publicized march up have finally given up on Apple. It may still take an obvious piece of bad news in order to get the fundamentally-trained holders of the stock to capitulate. It could be now, but it could also be at a later time. But for now, it would appear that a trading rally is close at hand.

Trading Note: That rally could start with a quick bounce, a scary but successful retest on obvious bad news, and then a move up to challenge the moving average. This could start happening next week so be ready.

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:

• Investor Sentiment – is still in a neutral position
• NYSE Breadth Oscillator – Ultimate Indicator reading of 68 – close to a sell signal
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 64 – approaching a sell signal
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 43 – neutral
• Dow Jones Transportation Average – shows a key divergence with other major averages

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.