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WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 27, 2019

January 27th, 2019 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JANUARY 27, 2019: The stock market experienced a choppy week ending up about where it started. In the process, it has worked out some of its overbought condition. The internal indicators are largely neutral which suggests that the market can go in either direction with the same probability – either up towards heavy resistance or down for a 50% retracement.

Key underlying short-term timing indicators show the following:

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THE BOTTOM LINE: It’s anyone’s guess whether the market corrects from here or rallies and then corrects. Perhaps there will be a tradable low in mid-February to take new positions on the long side. But momentum still appears strong to the upside and it’s a tough bet trying to play the downside. The December low’s extreme technical readings may have put in a solid bottom for many months.

WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 12, 2019

January 12th, 2019 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JANUARY 12, 2019: The stock market continued its strong bounce from the December 26th lows. All internal indicators show “overbought” readings which suggests both strength and possible exhaustion. There doesn’t appear to be any catalyst for a decline, but it’s probably too late to ride this current trend up without a small correction to neutralize these “overbought” conditions.

Key underlying short-term timing indicators show the following:

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TIME SYMMETRY: The market declined from December 3rd to December 26 which was a period of 23 calendar days or 16 trading days. Projecting out from the December 26th low, the upcoming time symmetry top should occur either on Thursday January 17 or Friday January 18.

THE BOTTOM LINE: The time to buy was in late December and it was a very tricky bottom indeed. It was a reminder of how difficult it is to go long after a 1000 point up day, but that would have been the preferred tactic at the time.

If I had to guess, I would anticipate a decline starting late this coming week to a closing Dow low below the January 3rd (Apple) low of 22,686.22. Then a new rally could take the market back up to the 200-day moving average around Dow 24000 or S&P 500 2700. For now, keep your powder dry for a possible entry to the long side in another few weeks.

WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 6, 2019

January 6th, 2019 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JANUARY 6, 2019: The stock market has made several radical intraday moves in the last month that has been unnerving to many traders and investors like myself. At the present time, the internal indicators have moved into “overbought” territory and can remain there for another one to two days before trending lower. This means that a short-term top can be anticipated after a few more days of advance.

Key underlying short-term timing indicators show the following:

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THE BOTTOM LINE: The Fear/Greed Index is currently reading 16 or “Extreme Fear.”  But this is a far stronger reading than the “2” reading of December 24th, just before the December 26th bottom. This suggests that the market can still move in either direction but has much more room to the upside. Based on the indicators and cycles, I’d anticipate a few more days to the upside before there is an attempt to retest the December 26 or January 3rd bottoms.

WALL STREET CRAPS STOCK MARKET STRATEGY DECEMBER 25, 2018

December 25th, 2018 Comments off

craps front coverSTOCK MARKET STRATEGY FOR DECEMBER 25, 2018: The stock market gave us one chance to get out on Wednesday morning before the Fed’s announcement. But after the Chairman Powell’s briefing, the market tanked hard on the remainder of Wednesday, Thursday, Friday and Monday of Christmas Eve Day. Needless to say, there was no “Santa Claus Rally” and investors are in total shock mode right now. As the internal indicators show, this is a gradual “crash” up to now and when it finally stops is anyone’s guess.

Key underlying short-term timing indicators show the following:

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THE BOTTOM LINE: The Fear/Greed Index is currently reading 2 or “Extreme Fear.” This confirms the action of the internal indicators above and suggests that we are near an internal low for the market. We may get a short and sharp rally soon, but in all likelihood we should see another visit to the established lows. It may take a classic “crash” in order for the market to finally hit bottom and reverse its downward trend. And with the most recent figures, that is going to take an intraday drop exceeding 1000 Dow points which is going to be scary. If I had to guess, I’d say that a rally should start on Friday December 28th after tax-selling season finally ends.

THE LOWEST READING SINCE THIS INDICATOR’S INCEPTION!

December 22nd, 2018 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of “2” which is the lowest number since this indicator’s inception. This suggests that market sentiment is at levels last seen in the 2008-2009 bear market. However, this doesn’t necessarily mean that the market is ready to go up just now. But what this does do is potentially indicate the location of the “internal bottom” of the market. The “external bottom” or lowest Dow Jones Industrial Average closing price will likely follow 2-5 weeks later. On this second “external bottom” there will be many non-confirmations to show it’s a final bottom. This type of set-up won’t happen until January.

WALL STREET CRAPS STOCK MARKET STRATEGY DECEMBER 16, 2018

December 15th, 2018 Comments off

craps front coverSTOCK MARKET STRATEGY FOR DECEMBER 16, 2018: The stock market continued its downward move by closing at its lows for this correction. With the majority of internal indicators showing readings in the 30s, a short-term bottom can be expected on Monday or Tuesday. That should set up the market for its anticipated “Santa Claus Rally.”

Key underlying short-term timing indicators show the following:

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THE BOTTOM LINE: The Fear/Greed Index is currently reading 8 or “Extreme Fear.” This single digit reading after two months of “Extreme Fear” readings overall is sufficient to indicate that the general market is unloved and the sentiment has been severe enough it both duration and direction. This sets up the market for a year-end rally starting sometime between Tuesday and Thursday of this week.

Note: Thursday would match the recent 18-day cycle of lows from October 29 to November 23 in terms of number of trading days. Tuesday would mark the matching number of calendar days. Thus, a cyclical low can be anticipated between Tuesday and Thursday of this week. But remember that it will be tricky catching the exact bottom for it may mean trying to catch a “falling knife.”

POSSIBLE INTERMEDIATE-TERM BOTTOM NEXT WEEK

November 23rd, 2018 Comments off

POSSIBLE POST-THANKSGIVING BUYING OPPORTUNITY

November 14th, 2018 Comments off

FEAR/GREED SENTIMENT INDEX – JUNE 30, 2018

June 30th, 2018 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” has a current reading of 34 which is in the “Fear” zone. This suggests that the market is within range of a buying opportunity on further weakness.

This indicator has been in the “neutral” area for some time as well as “Fear” and “Greed,” but it has avoided both “Extreme Fear” and “Extreme Greed” readings in past month.

With the internal indicators approaching “oversold” readings, this suggests that a tradable bottom could occur in the coming week to 10 days. While it is uncertain to how powerful a rally might be from here, it probably is worth taking some positions on weakness particularly if it is accompanied by “obvious bad news.”

WALL STREET CRAPS STOCK MARKET STRATEGY JUNE 17, 2018

June 17th, 2018 Comments off

craps front coverSTOCK MARKET STRATEGY FOR JUNE 17, 2018Some internal indicators of the stock market are showing “oversold” readings, while others are trending down. This suggests that a short-term bottom could be setting up for later this week. I see this as a quick trading opportunity and may likely come with more bad news on the “trade war” front. The “Volatility Indicator” would have to reach oversold levels before I’d make that move with my trading account.

Key underlying short-term timing indicators show the following:

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THE BOTTOM LINE: The Fear/Greed Index is currently reading 61 or “Greed.” This is largely a neutral reading and doesn’t suggest any direction for the stock market at this time. Any moves are likely to be short-term in nature. An intermediate top or bottom does not seem likely in the coming weeks.