The stock market made 7 consecutive new closing highs in the Dow Jones Industrial Average creating a point of buying exhaustion. On Friday with the background of a tariff war with China, the market gave up all of the last month’s gains in a matter of hours. With oversold readings in several indicators, a gap down opening in the next trading session may cause a selling climax to create a bounce from the session’s lows. But overall, I’d expect the market to head lower but with increased volatility in both directions over the near 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 9. This indicates that it is in deep “oversold” territory. But the clustering effect has not appeared yet to indicate a tradable bottom. It may be time to exit short positions, but too early to go long except for a short bounce. A better buying opportunity should appear in a few weeks, not days.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 29. I would expect a reading under 25 in the “Extreme Fear” territory to indicate a bottom. That could come at any time now. I suspect that the market is setting itself up for a Santa Claus Rally in December. But it could be rough sledding until then. Be careful getting in too soon.
The stock market has been on a record shattering rally since the April “Trump Tariff” bottom. This rally has exceeded all expectations and brings to mind the concept of a “5th Wave Blow-Off.” But that kind of thinking can be a trading trap and it’s best to just play it carefully and wisely. With that being said, today represented the 7th consecutive closing DJIA all-time high and a pullback can be expected. But how long is anyone’s guess. Just remember that it is October, a month that is notorious for sharp corrections.
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 19. This indicates that it is in “oversold” territory but far from “clustering” as in the case of forming a bottom. Until we see more points in a tight area, a bottom is not here yet.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 54. This does not indicator a buying area but could go in either direction.
The stock market has been on a record upswing since April when I warned about a climatic bottom as indicated by a reading of “4” in the Fear/Greed Index. Now we are at the other end of the spectrum with the anticipation of a final top. But tops are more often trickier than bottoms to predict. The last confirmed high in the Dow Jones Industrial Average was on July 23rd about 3 1/2 weeks ago. I expect a closing high next week to be unconfirmed by many key indicators to signify an important top. The key other indicator that I’m especially looking at is a lack of strength in market leaders such as Nivida and Palantir.
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 30. This indicates that a bottom is very near this area, but it is unclear how long it will stay in this area or how low it can go.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 58. This does not indicator a buying area but could go in either direction.
Categories: Market Analysis, Stock Market Timing Tags: investing, investments, stock action, stock market, stock trading, stock trading tips, stocks, trading, trading tips, wall street
The stock market is in full crash mode with back-to-back -5% moves on Thursday and Friday. This sets up a possible bottom for Tuesday, Wednesday or Thursday of this coming week with an intermediate top most likely coming in May. Walter Deemer, the esteemed stock market veteran, wrote, “When it’s time to buy, you won’t want to.” And that’s how it will feel next week when the market searches for a tradable bottom below the $SPX 5000. The real question is exactly how far below $SPX 5000 does it go? Maybe 4800?
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 26. This indicates that a bottom is in this area, but it is unclear how long it will stay in this area.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 4. It rarely gets this low and when it does it only stays in this area for a day or two. Based on this indicator alone, a tradable bottom will be at hand next week.
Categories: Market Analysis, Stock Market Timing Tags: investing, investments, stock action, stock market, stock trading, stock trading tips, stocks, trading, trading tips, wall street
The stock market has just had a sharp decline that broke through many moving averages and trend lines. But the oversold readings likely signaled a short-term bottom for a final move to All-Time Highs. If there is a new closing high in the DJIA that is not confirmed by the majority of other indicators, then we could have our final high and a classic “Dow Theory Sell Signal” or “Joe Granville Sell Everything Signal.” That final high must also coincide with an obvious “Cover Story” to bring in the “Bagholders” or final sucker buyers who will be left holding the proverbial bag.
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 10. This indicates that a bottom is in this area and the next move it up.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 34. It did reach an oversold reading last week for one day and qualifies as a “buy signal” for this indicator.
The stock market has been continuing its relentless march upwards in terms of the S&P 500 and the Nasdaq Indexes. At the same time, the Advance/Decline Line, the Dow Jones Industrial Average and the Dow Jones Transportation Average have not confirmed that same strength. This presents a time to be extra careful about trading the upside for too long of a time and trading the downside too early or in the wrong sectors.
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 22. This clearly means that a bottom is closer than a top. This is a rare occurrence when many major indexes are making new highs.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 42. This means that the market could head lower and reach a bottom soon. Or the market can head higher for a much longer period of time.
Categories: Stock Market Strategy, Stock Market Timing Tags: investing, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, stock trading, stock trading tips, stocks, Tags: investments, trading, trading tips, wall street
The stock market is currently short-term overbought and is likely to have a correction of some sort in the next week to 10 days. Once this overbought condition is relieved, the market can be expected to retest its current high and possibly breakthrough to higher ground. The most telling characteristic of the most recent bottom is that the final decline was lead by “the Generals” Apple and Tesla. As such, a good trader must be ready for the surprises that may come to the upside instead of the downside for the intermediate 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 77. This indicator is just now starting to cluster. So there is no indication that a significant decline is going to happen right now. It’s most recent bottom surprised me by not getting to the “oversold” area, but instead turned up at the beginning of the year.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 63 and trending up. Timing-wise, this doesn’t meet the criteria for buying right now. However, bullish runs can go on for extended periods of time without much of any time spent heading towards the oversold condition.
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 had a sharp two-way response to the latest FED meeting. This created both a bull and bear trap for traders. But this latest one-day rally may prove to be a curse in that it relieved downside pressure and opens the way to continued downside action. Prices can certainly continue down rapidly in a short period of time. My guess is that there needs to be a clear sign of capitulation in order for a bottom to take place. This entire decline has been too orderly. The “blood” is still not on the street, even though it should be now. Also,the internal indicators below indicate that there is more room on the downside before the general market becomes short-term “oversold.”
Key underlying short-term timing indicators show the following:
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NYSE McClellan Summation Index: This indicator is continuing its long downward move. In terms of time, this indicator should be bottoming and even reversing course soon. But first this indicator needs to “cluster” before changing direction. But this indicator suggests that after the cluster is finished, the market to turn to the upside for an extended period.
Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 21. But major bottoms have occurred around the reading of “2-5” so we are far from that. This indicator also confirms to me that this decline has been too orderly and is lacking the signs of “blood on the street” capitulation that is usually needed to reverse course on a down market of this magnitude.
Categories: Stock Market Strategy, Stock Market Timing Tags: investing, investing tips, investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, Tags: AAPL
The stock market declined this past week with only one day to the upside. The market is due for a relief rally that may get started early next week. But this next rally may be setting up the market for a large drop after this temporary buying subsides. My guess is that the market will be very tricky to trade in the coming week. And for many people especially those who want to go long, this may be a good time to avoid the market until a more pronounced bottom has been tested and formed.
Key underlying short-term timing indicators show the following:
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NYSE McClellan Summation Index: This indicator is trending sharply lower with a current reading of 33. It should reach the oversold territory in one more trading day.
Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 41. A reading below 25 is needed for a tradable low based on this sentiment indicator. This indicator is several days away from signalling a bottom.
Categories: Stock Market Strategy, Stock Market Timing Tags: AAPL, investing, investing tips, investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing
