Wall Street Craps – 2012 Global Ebook Finance Award-Winner

MARKET OBSERVATIONS FOR December 29, 2013: The stock market rallied to 6 consecutive new highs before its slight drop on Friday. This certainly qualifies as confirmed strength but also a possible sign of an internal top. I would expect the strength to continue for a few more days with a good chance of a correction starting at the beginning of the New Year. This market is now overbought, over-loved, and overextended as the indicators below are signaling. This isn’t a time for buying, it’s a time for selling.

Key underlying market indicators show the following:

• Investor Sentiment – Short-term = 60/neutral | Long-term = 70/SELL
• NYSE Breadth Oscillator – Ultimate Indicator – 72 (SELL)
• Nasdaq Breadth Oscillator – Ultimate Indicator – 63 (neutral)
• NYSE % Above 50 Day Moving Average – Ultimate Indicator – 77 (SELL)
• Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 76 (SELL)
• S&P 100% Above 200 Day Moving Average – Ultimate Indicator – 81 (SELL)
• Stock vs. Bond Indicator – Ultimate Indicator – 75 (SELL)

My advice for traders and investors is to remain of the sidelines and let the market set itself up for the next major move. The current list of oversold Blue Chips stocks and Exchange-Trade Funds that are near the lower range of their Money Flow Indicator and could be bought on further weakness include: Ford, TLT & FXI. This short list is another indication that very few issues are in good buying ranges. I noticed that bellwether stock, Apple, may have made a final double top on “obvious good news” marking the end of its rally.

MARKET OBSERVATIONS FOR September 29, 2013: The stock market has declined steadily since its recent new closing Dow high. The most recent advance and decline have been between 14 and 17 days long. That timing pattern would suggest that the market still needs one more week of declining action in order to reach a bottom around October 8-10. In the meantime, the current list of relevant indicators suggests that an oversold condition will likely be met in the coming week. That being said, it looks like a buying opportunity is starting to shape up over the near term.

Key market indicators show the following:

• Investor Sentiment – Short-term = 50 neutral/Long-term = 50 neutral
• NYSE Breadth Oscillator – Ultimate Indicator reading of 26 – buy signal
• Nasdaq Breadth Oscillator – Ultimate Indicator reading of 27 – buy signal
• Risk On/Risk Off Indicator – Ultimate Indicator reading of 33 – close to a buy
• NYSE Summation Index – Consolidating – Could be topping out here

For now, my advice for traders and investors to keep your powder dry in anticipation of a good buying opportunity in the next week or two. At this point, the sentiment has not changed significantly enough to warrant a bottom. But with a steady flow of negative news, the market can quickly change to one where savvy traders and investors can take intelligent risks to the upside.

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.

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.

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

On March 5th, the Money Flow, Relative Strength, and Ultimate Indicators triggered buy signals for the stock of Apple. Thus, this triple buy signal made it possible to take initial positions in this undervalued, oversold, and unpopular high-quality stock near the absolute bottom around 420.

(Click here for the chart for Apple)

Since that time, the price of Apple has rallied to a current price of 452. The so-called “Apple Bear Market Optimized Moving Average” stands at 464, just 12 points away. This moving average has served as the cap on three previous rallies in Apple over the past several months. As long as the price of Apple stays under the Optimized Moving Average, it is still considered to be in a bear market phase.

If the stock does not rally through the Optimized Moving Average at this time, I would expect a retest of the early March lows around the 425-407 price range. A successful retest could be in store for the stock so I’d start accumulating the stock on any move close to that price area.

THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE FEBRUARY 19, 2013: I have devised a new indicator for Apple which I call the “Apple Bear Market Optimized Moving Average“. It is a 50-day exponential moving average of the price of Apple. It currently has 3 points that served as the top of small rallies since early October 2012. This will help those who want to buy the stock low but want to get out before it turns down again. As of today, the moving average is at 498 and dropping rapidly.

With today’s AAPL price of 460, the spread between the Optimal Moving Average and current price is 38 points. Until the price of AAPL breaks convincingly above the Optimal Moving Average with increased volume, expect the bear market in AAPL to continue….much to the chagrin of those who purchased the stock during the height of its popularity last year.

Until the weaker hands give up on the stock, the bear market in AAPL should continue. The first clue would be a clear oversold buy signal in the “Money Flow Indicator” which has called each of the last three rally in AAPL.

Key Apple indicators show the following:

• Relative Strength Indicator: “42” reading & is more than a week from a buy signal
• Ultimate Indicator: “42” reading and is also more than a week away from a buy signal
• Money Flow Indicator: “55” reading which is far from being a buy signal under 20

Until the “Apple Bear Market Optimized Moving Average” is broken to the upside, the trend is down for this popular stock. And until the Money Flow Indicator gets near 20, it still hasn’t gone enough to an extreme in this most accurate forecasting timer for buying Apple.

Special Note: It looks like a retest of the lows is about to happen. I would look to accumulate AAPL on this retest as it has a good chance of being successful. I would expect a negative “cover story” to cause the weak hands to capitulate on this retest. It may pay to be a day early on your buying of these pilot positions. AAPL has a habit of making huge jumps to the upside when bottoms are reached. Being a day or two late may cost you 30-50 points!

THE APPLE BEAR MARKET OPTIMIZED MOVING AVERAGE UPDATE FEBRUARY 4, 2013:I have devised a new indicator for Apple which I call the “Apple Bear Market Optimized Moving Average“. It is a 50-day exponential moving average of the price of Apple. It currently has 3 points that served as the top of small rallies since early October 2012. This will help those who want to buy the stock low but want to get out before it turns down again. As of today, the moving average is at 517 and dropping rapidly.

With so many traders, investors, and institutions having paper losses in this popular stock, it appears that the one thing that people don’t expect is a bear market in this issue. Almost all of the fundamental projections for the stock are in the 700-800 price range. Until these weak hands get scared out of the stock, my technical and behavioral indicators point to lower prices.

Some key Apple indicators show the following:

• Relative Strength Indicator:  “34” reading and not far from a buy signal under 30
• Ultimate Indicator:  “31” reading and close to a buy signal under 30
• Money Flow Indicator:  “43” reading which is far from being a buy signal under 20 (Note: This indicator has been the most timely and reliable of the three mentioned above!)

Until the “Apple Bear Market Optimized Moving Average” is broken to the upside, the trend is down for this popular stock. And until the Money Flow Indicator gets near 20, it still hasn’t gone enough to an extreme in this most accurate forecasting timer for buying Apple. For now, my crystal ball says that a turn to the upside in Apple will have to wait until mid-to-late February (approximately Feb. 18-23).