The stock market is broke through major resistance to new rally highs this past week. The Bulls were encouraged by positive remarks from the Fed despite some weaker-than-expected earning from several major tech companies. Thursday’s late action along with Friday’s retreat has reset the internal indicators to neutral positions. I will be looking for a short-term oversold condition to add some long positions for the short-term.
Key underlying short-term timing indicators show the following:
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NYSE McClellan Summation Index: This index’s oscillator has a current reading of 92. This is both a sign of strength and one of being overbought. But does appear to indicate that this indicator is most likely at its peak and that the major part of the current rally is over.
Fear/Greed Index: This popular indicator is in the “Extreme Greed” territory with a reading of 76. This is the first time that it has been in this range for a long time. I can easily spend more time here, but an investor should be careful about joining the Bull crowd at this late time.
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The stock market appears to have completed its Bear Market rally from the October lows. Don’t be surprised if those October lows are tested in the coming weeks with either a low-volumn Dow Theory non-confirmation or a climatic high-volume crash to occur. In most cases, this would be a good time to step aside and let the market set itself up for a better opportunity in late December or in the January/February time period. This is a tricky time in the market where a Bear or Bull can easily lose money and/or sleep!
Key underlying short-term timing indicators show the following:
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NYSE McClellan Summation Index: This index’s oscillator has a current reading of 76 and trending down. This indicator is starting to cluster now after a big run-up since October. The cycle of this indicator would suggest that it is now time for the market to head down for a number to weeks before clustering again to form a stable bottom.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 54 and trending down. Having been in the “Greed” range for many weeks, it looks like this indicator is heading back towards the “Extreme Fear” area that is required for a good bottom. The trick here is to be patient enough to see a reading in the “Extreme Fear” range, but on the lookout for the deep bottom move to the under 5 reading of major bottoms. This is always a distinct possibility.
Categories: Fear & Greed Index, Stock Market Strategy, Stock Market Timing Tags: Categories: Stock Market Strategy, investing, investing tips, investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, Tags: AAPL
The stock market has turned sharply lower since its midweek highs of last week. There have been 3 strong moves down with only a temporary reprise on Monday. Momentum seems to be suggesting that buying this drop will be akin to “catching a falling knife.” However, the internal indicators are either approaching or are within the oversold range suggesting a bounce in the near term. The timing of that bounce could be either be this coming Friday or Monday for those interested in a quick high risk trade with tight stops to the upside.
Key underlying short-term timing indicators show the following:
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NYSE McClellan Summation Index: This indicator has a current reading of 39 but still needs a few more days before reaching the buying zone. But mostly, this indicator is showing that there has not been base building for any kind of sustained rally. Thus, it suggests that even a sharp bounce will be short-lived.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 26 which is one point away from “Extreme Fear.” The strength of this decline suggests to me that we may finally get a sub-10 reading in this indicator when the market finally bottoms. And if it does so, then there could be a low-risk rally worth participating in. But right now, I’d expect only short-term bounces with high risk upside trades.
Categories: Stock Market Strategy, Stock Market Timing Tags: Categories: Stock Market Strategy, investing, investing tips, investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, Tags: APPL
The stock market spiked down on Monday and then rallied strongly the remaining 4 days of the week. I was looking for a trade set-up on Tuesday morning, the market did not present an opportunity to “fade” the trade . This has happened often in the past and it is often wisest to buy during the last half hour of trading instead of letting the futures market change course and ruin your trading plans. I missed a good trading opportunity by trying to be too perfect in a tricky market. In this case, it’s more important to determine a gradual betting strategy than trying to time a “hot and cold” market too closely.
Key underlying short-term timing indicators show the following:
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Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 32 after being in the “Extreme Fear” zone with a reading of 17 on Monday. So this indicator did flash a clear buy signal of Monday which I saw but didn’t act on.
Note: Friday July 23rd’s, new closing high in the Dow Jone Industrial Average was not confirmed by the Dow Jones Transportation Average. This sets up a classic Dow Theory Sell Signal. Mark this date as a possible intermediate term top.
Categories: Fear & Greed Index, Stock Market Strategy, Stock Market Timing Tags: Categories: Stock Market Strategy, investing, investing tips, investments, QQQ, retirement, SPY, stock action, stock market, stock market timing, stock trading, Tags: AAPL
STOCK MARKET STRATEGY FOR SEPTEMBER 7, 2020: The stock market had a fresh break to the downside this past week. Could this be the long-awaited correction that will take us into October? Or will this simply be a “dip” to buy for another rally to new all-time highs. The NYSE McClellan Summation Index reading tells us to be very careful here – things can change quickly in this environment.
Key underlying short-term timing indicators show the following:
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NYSE McClellan Summation Index: This key trend indicator remains below its 15-day moving average with a chance of expanding to the downside. Because of this indicator, a trader/swing trader should be very careful about waging too much capital on a long-side bet.
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STOCK MARKET STRATEGY FOR JUNE 2, 2019: The stock market is oversold in two out of the five internal indicators. Any weakness on Monday or Tuesday should be considered a short-term buying opportunity. Expect this bottom to be a tricky one to catch (like they all are) and be prepared to buy early rather than be left back at the station. (Note: This was supposed to have been posted on Sunday night but was delayed due to a personal emergency.)
Key underlying short-term timing indicators show the following:
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THE BOTTOM LINE: The stock market is oversold enough to begin looking to accumulated broad-based stock positions. The trickiest scenario would be for the market to open higher on Monday and force traders to buy into strength rather than weakness.
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STOCK MARKET STRATEGY FOR FEBRUARY 4, 2019: The stock market has continued its strong, broad-based rally from the Christmas lows by going practically straight up. But now is the time for a correction of this rally (most likely starting after the State of the Union address Tuesday) and based on the momentum, I’d expect it to be more of a sideways, stalling decline than a steep drop which serves the purpose of chewing up time. But a good buying opportunity will likely arise from the next oversold reading.
Key underlying short-term timing indicators show the following:
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THE BOTTOM LINE: The market may be setting itself up for a decline starting after Trump gives his State of the Union speech. This correction may not amount to a lot of points to the downside, but I’d be a buyer on the next oversold bottom. I think that the December lows were an important pivot point for this market and a continuation of the Bull Market.
Categories: Stock Market Strategy, Stock Market Timing Tags: Categories: Stock Market Strategy, investing tips, investments, retirement, stock action, stock market, stock market timing, stock trading, stock trading tips, stocks, Tags: investing, trading advice, trading tips, wall street