STOCK MARKET STRATEGY FOR FEBRUARY 26, 2017: The stock market continued its relentless advance last week with its 1th straight closing high. Normally, this would qualify as an upside blow-off with only one remaining piece to the puzzle: a large one-day reversal to the downside usually triggered by an obvious piece of good news. That reversal would mark the internal high of the market and would likely be followed in 5 to 7 days by a final weaker retest.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Index is currently reading “Greed” after being in the “Extreme Greed” area for most of last week. The internal indicators are surprisingly close to “oversold” readings which would appear to make no sense at all. Because of the mixed signals and the 11 consecutive new closing highs, it might be smarter to step aside and watch the fireworks. This strategy would be wiser rather than trying to play the genius by betting large sums of your after-tax capital on risky bets.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has moved back into the “Extreme Greed” range this past week. This is one of the pre-conditions for an intermediate stock market top. The prudent thing to do would be to lightened up on any over-extended long positions on further strength in the market. There will be another time later on when stocks will be of greater value than is present right now. Remember that tops take longer time to form than bottoms, so you don’t have to sell right this minute. The main thing is to know that this is a golden opportunity to get a very good price for any stocks that you’ve purchased at lower prices. You can always buy back in at lower prices later on – “The Wall Street Casino will always be open.”
Note: I consider an “Extreme Greed” reading as over 80. This reading may occur several times in a “sell” area. In the present epic rally, I’d even expect readings closer to 95-100 before an actual downturn ensues.
Categories: Fear & Greed Index Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR FEBRUARY 12, 2017: The stock market continues to push higher without the slightest correction. The news background continues to be of relentless optimism in terms of the outlook for business and the economy. This public sentiment should equate to a market intermediate top in the not-to-distant future. The internal indicators are trending up towards the “overbought” region with a decent possibility of a top coming in the next week or two. If your strategy is to buy low and sell high, then we are probably already in that “sell high” area now.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Index is currently reading “Greed” which allows for more room to the upside. Once is reaches the “Extreme Greed” area, it would be prudent to start taking some more chips off of the table. The stock market casino is always open so missing some profits is a smart strategy overall when the risks of losing money are far greater. The odds of the stock market game strongly favor lightening up as we enter the area of “Extreme Greed.”
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR JANUARY 29, 2017: Last week, the stock market advanced with another leg up in the Trump Rally. The internal breadth indicators are still in very “neutral” territory suggesting that there is more room to run on the upside. However, the “Volatility Indicator” is in the “overbought” area and puts a cap on how long the rally can continue. So I’d be looking for another rally in the short-term, but with a bigger chance of a correction in February to cool the jets of euphoric traders.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Index is currently reading “Greed” which means that it still has lots more room to the upside before it reaches “Extreme Greed” territory. The market looks like it will continue to climb the proverbial “wall of worry” as it refuses to correct and offer an “oversold” reading in the 4 breadth oscillators that are shown above. If the market were to correct or stall, then any “oversold” readings would be a time to “buy the dip” in a broad-based ETF for a continuing ride up.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR JANUARY 22, 2017: The stock market sold off modestly in the days before Inauguration Day. The majority of internal indicators are in “neutral” positions allowing the market to go in either direction from here. The sentiment of caution may equate to a stock market that climbs the proverbial “wall of worry.” In this case, the rally will continue to push upwards without an oversold condition to allow traders and investors to enter the market at lower risk.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: Just like last week, the Fear/Greed Sentiment Index is in the “neutral” area meaning that the emotional barometer of the market is neither too bullish or too bearish. When this happens be prepared for the market to go in either direction. My hunch is that volatility will return to the market shortly and present more trading opportunities as the uncertainty around the Trump Administration causes both fear and euphoria in the psychology of market participants. But my overall market strategy until proven otherwise is simply to “buy the dips” and stay diversified.
Note: Timing the dip would be either oversold readings in the majority of internal indicators, a bounce off of the 200-day moving average of the DIA Exchange-Traded Fund between 184-186 or the SPY Exchange-Traded Fund between 213-215.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR JANUARY 15, 2017: The stock market continues to hold near the top of its trading range. There is a lot of anticipation as to whether we will get a new high in the Dow Jones Industrial Average or if we sell off after the Inauguration. Right now, the majority of indicators are trending down towards a short-term oversold condition. This suggests that another rally may be close at hand. It’s anybody’s guess where the market will go longer-term, but my bet is that it will continue to “climb the wall of worry.”
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Sentiment Index is in the “neutral” area meaning that the emotional barometer of the market is neither too bullish or too bearish. When this happens be prepared for the market to go in either direction. If you take a step back and look at this market, you would think that the “Trump Rally” has been largely discounted into the price of equities. On the other hand, you have to ask “Where else is money going to go?” It looks to me that there is still more time left for the market to continue to rally and all oversold readings should be opportunities to “buy the dips.”
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR JANUARY 8, 2017: The stock market continues to zig-zag higher with a good chance of closing above 20,000 in the Dow Jones Industrial Average this coming week. This could be a classic trap with the euphoria surrounding the Inauguration providing the “cover story” that will convince the nervous, unsophisticated investor to buy out of the fear of missing out. While a top may be at hand, it’s still dangerous to bet on the downside as well.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Sentiment Index is currently on the border of “Greed” and “Extreme Greed.” With a couple days of rally, this indicator should be in the “Extreme Greed” area which may signal an intermediate term top. On the other hand, the internal breadth indicators are moving towards an “oversold” condition. This may mean that a short-term buying opportunity is close by and a quick, but profitable rally may set up for next week as well. If that should happen either buy the broad-based ETFs or market leaders such as Facebook, Google, Amazon, etc.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR DECEMBER 26, 2016: The stock market is still hovering near its all-time highs with one more closing high in the Dow Jones Industrial Average likely in the coming week to 10 days. But keep in mind that this time of the year can be very tricky and volatile. I see this week as the set up for the first week of the year which may be the final high for the intermediate term. Or we could decline into next week setting up a bottom during the first week of January with a rally into March. Be prepared for either kind of scenario.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Index is currently reading “Greed” which still makes me think that we have one more rally and revisit into the “Extreme Greed” area. With the internal breadth indicator reading “neutral,” I believe that this will be a week of non-action. On the other hand, anticipate the first week of the year to be eventful and possibly a short-term scare or longer term non-confirmation intermediate top. Either could happen in about 7-10 days.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street
Today’s “Fear/Greed Sentiment Index” reading has moved from “Extreme Greed” to “Greed” as of this week. Any return to new highs by the Major Indices will most likely move the needle back into the “Extreme Greed” territory. However, this second return to “Extreme Greed” territory will most likely signal the final rally of this move. Expect the first weeks of January to be tricky and counter-intuitive.
Categories: Fear & Greed Index Tags: insurance, investing, investments, money, QQQ, retirement, SPY, stock action, stock market, stocks, tony robbins, trading, wall street
STOCK MARKET STRATEGY FOR DECEMBER 18, 2016: The stock market continues to hover near its all-time highs in the majority of indexes. With the internal breadth indicators nearing “oversold” readings, it looks like a brief decline of maybe one or two trading sessions will lead to another run to new highs and beyond. While most of the buying power has been spent on this present rally, a quick trade to the upside may be worth a bet until the end of the year.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The Fear/Greed Index is currently reading “Extreme Greed” and means that this is more a time to sell than to buy. But with the internal breadth indicators nearing “oversold,” it looks we will get our “Santa Claus Rally” right on cue for a ride up until New Years Eve. But after that, the reality of an overbought, over-valued, and over-loved market will bring the correction or even an end to the intermediate-term rally since the Election.
Categories: Stock Market Strategy Tags: insurance, investing, investments, money, retirement, stock market, stock market timing, stock trading, stocks, tony robbins, trading, wall street