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 haD been on a relentless advance since its bottom in October of last year. However, these past two weeks have shown signs of a possible topping pattern and a time to move to the sidelines or lighten up on long positions. From a Dow Theory perspective, the Dow Transportation Index may provide a non-confirmation of a new Dow Industrial Average high. And if other major indexes and technical indicator also fail to confirm a new closing high in the Dow Jones Industrial Average, then we will have a classic “Sell Everything” Joe Granville Sell Signal worth respecting. This all makes for an interesting time.
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 47. But the daily readings just closed below its 15 Day Moving Average two days ago. This suggests that a bigger decline may be in the cards over the shorter term and not a time at all to buy or hold.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 61. It is too early to buy based on this indicator which has been very accurate in picking bottoms to the exact day. Maybe a lot of people are watching and acting on this index.
The stock market has been trading in a very tight trading range for many weeks now. While many technology stocks have performed well, others like bank. transportation and Russell 500 stocks have performed poorly. With such a split market, the breadth readings will give distorted readings. Based on my experience, a sharp but quick drop should create a good buying opportunity for nimble traders. But otherwise, long-term investors might want to wait in high-yielding money market funds for a better, more oversold bottom.
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 31. This indicator has been trending lower for over 10 trading days now. It is approaching an oversold reading which says that a tradable bottom is approaching. This is one of the most reliable intermediate-term trading indicators and gives you plenty of time to prepare.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 58. The next upside trading opportunity doesn’t appear unless this trusty indicator hits a reading of 25 or less.
The stock market has broken to the downside after hovering for several weeks in a tight trading zone. The short-term indicators are very oversold so a bounce can be expected in the next day or two to release that upside pressure. But after this bounce, you can expect the market to return to the downside since the intermediate-term NYSE McClellan Summation Index has made its turn to the downside with very negative historical indications.
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 58 but is now clearly turning down after rallying for about a month. Timewise, this downturn can be expected to start accelerating in about 5-7 days. Use this anticipated bounce to unload on your long positions with the intent of buying back after this indicator bottoms several weeks from now.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 52. This indicator has a long way to go before it registers a buy signal below a reading of 25 or “Extreme Fear.”
Categories: Stock Market Strategy, Stock Market Timing Tags: investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, Tags: investing tips, The Stock Market
The stock market is hovering just below its recent short-term high. With nearly all of the oscillators having been overbought at the beginning of this past week, there is a good chance of a retest of the recent highs. But this retest is likely to fail and start a sharp decline to challenge the October lows. This is not a good time to be taking long positions, but possibly one to take light short positions.
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 50. It has been coming out of a good low position from two weeks ago and is likely to continue its upwards move to an overbought positions in 2-3 weeks. This is one of the more bullish indicators.
Fear/Greed Index: This popular indicator is in the “Greed” territory with a reading of 57. This is a neutral position with plenty of room to go up or down.
Categories: Stock Market Strategy, Stock Market Timing, The Stock Market Tags: investing tips, investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing
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.
Categories: Stock Market Strategy, Stock Market Timing Tags: Categories: Stock Market Strategy, investing tips, investments, QQQ, retirement, SPY, stock action, stock market, Stock Market Strategy, stock market timing, Tags: investing
