STOCK MARKET STRATEGY FOR AUGUST 2, 2015: The stock market may have reached an important intermediate closing low on Monday July 28th. Since that date, it has advanced to an area of resistance that we find ourselves at this time. With the internal indicators in neutral position, the general market has the probability of going in either direction. But the likelihood is that the lows have already been seen and that dips should be bought now for a ride back up to the old closing highs.
Key underlying short-term market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: Be looking to buy on weakness in the coming 5 to 7 trading sessions. The safest buy bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up to challenge the old highs once again.
STOCK MARKET STRATEGY FOR July 19, 2015: The internal market indicators are approaching overbought levels just as the major averages are reaching resistance. While there is still room for more upside action especially with Apple reporting this week, the normal course of action would be a mild or sideways correction. After the recent “Perfect Storm” of negativity (Greece, China, rising interest rates, Wall Street power outage), the market may have created a clearly-defined floor at Dow 17500. This means that all dips should now be bought.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: Postpone new purchases until the market works off its overbought readings. The next bottom may be short-lived and not amount to much in terms of a price correction. The general market may only need time to stall rather than correct in terms of price. After this most recent “Perfect Storm of Negativity,” the marekt could be in the position of “climbing the wall of worry” in the July-August-September time frame after a brief pause. It terms of sentiment, the market has seen the worst for the time being.
STOCK MARKET STRATEGY FOR July 12, 2015: The stock market’s gap openings on Thursday and Friday made it very difficult to trade last week’s spike bottom. With all oscillators returning to neutral levels, the rhythm of the market is once again set up to retest last week’s lows. If we should get a hard move down on Monday and/or Tuesday, be ready to take new positions as we approach Wednesday (time-wise) or Wednesday’s low readings (price-wise).
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines hard on Monday and/or Tuesday, be ready to “catch the falling knife” by taking long positions in the market. The bad news “cover story” will most likely come from something related to Greece, China, or an interest rate hike. Whatever the news is it will only serve as an excuse to the market to come down for its retest of the lows.
The safest buy bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up to challenge the old highs once again.
STOCK MARKET STRATEGY FOR July 5, 2015: The stock market declined sharply last week on the bad news from Greece. This sets up a possible retest of the lows on either Tuesday or Wednesday. If the market should come down hard for the next two sessions, it would be a distinct possibility that a new trade-able low is in place. So be ready to cheer on any bad news and sharp declines early this coming week as an opportunity to go long for a quick ride up to the top of the trading range.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines early next week (Tuesday or Wednesday), we should be prepared to “catch the falling knife” with gradual buying on the way down. This would qualify as a “5-Day Retest” of a previous market low. The market doesn’t even have to be near the previous lows in terms of price levels. It only has to drop hard for two days in a row. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up to challenge the old highs once again.
STOCK MARKET STRATEGY FOR June 14, 2015: The stock market declined into last Tuesday’s bottom and then rallied sharply for the next two sessions. The “5-Day Retest Rule” from my book implies that an important intermediate bottom could occur on a hard drive down towards last week’s low especially if it is accompanied by obvious bad news. So if Monday closes with a news-influenced sharp decline, be ready to pull the trigger and go long on early weakness Tuesday. Just remember to limit your risk by only buying broad-based, actively-traded ETFs incrementally.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines early next week (Tuesday or Wednesday), we should be prepared to “catch the falling knife” with gradual buying on the way down. That’s because the pattern of last few years has been for markets to make only “V-Shaped” bottoms. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up.
STOCK MARKET OBSERVATIONS FOR June 7, 2015: The stock market has declined to a point where its next move may be a reversal to the upside. During this past week, some key breadth indicators reached deeply “oversold” levels. All that remains is for the market to make another move to the downside on obvious bad news. That would set up the reversal and rally we have been anticipating. But be careful here as well. There is an alternative strong case for the market going on another leg down.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines next week (Tuesday, Wednesday or Thursday), we should be prepared to “catch the falling knife” with gradual buying on the way down. That’s because the pattern of last few years has been for markets to make only “V-Shaped” bottoms. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ, IWM) as there is no telling which sectors will perform best. However, the transportation sector does appear to have bottomed and its IYT Exchange-Traded Fund should offer some downside protection.
IMPORTANT NOTE: Although the current correction has been long enough in terms of time or duration, it has not done enough in terms of extent or price erosion. This shallow downtrend would appear to need a spike down to support levels around 17600 in the Dow Jones Industrial Average.