STOCK MARKET STRATEGY FOR SEPTEMBER 13, 2015: The stock market is moving closer to an overbought condition after the most recent panic to the downside. Strength on Monday or Tuesday could mark the top of this most recent move and start the decline to retest the August or last October lows. This is a time to lighten up into any strength and to keep your powder dry for an important buying opportunity soon.
Key underlying short-term market indicators show the following:
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THE BOTTOM LINE: The internal indicators are close to flashing sell signals marking the end of this current rally. The next oversold condition near the retest of the previous lows may be an important buying opportunity.
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STOCK MARKET STRATEGY FOR July 12, 2015: The stock market’s gap openings on Thursday and Friday made it very difficult to trade last week’s spike bottom. With all oscillators returning to neutral levels, the rhythm of the market is once again set up to retest last week’s lows. If we should get a hard move down on Monday and/or Tuesday, be ready to take new positions as we approach Wednesday (time-wise) or Wednesday’s low readings (price-wise).
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines hard on Monday and/or Tuesday, be ready to “catch the falling knife” by taking long positions in the market. The bad news “cover story” will most likely come from something related to Greece, China, or an interest rate hike. Whatever the news is it will only serve as an excuse to the market to come down for its retest of the lows.
The safest buy bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up to challenge the old highs once again.
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STOCK MARKET STRATEGY FOR July 5, 2015: The stock market declined sharply last week on the bad news from Greece. This sets up a possible retest of the lows on either Tuesday or Wednesday. If the market should come down hard for the next two sessions, it would be a distinct possibility that a new trade-able low is in place. So be ready to cheer on any bad news and sharp declines early this coming week as an opportunity to go long for a quick ride up to the top of the trading range.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines early next week (Tuesday or Wednesday), we should be prepared to “catch the falling knife” with gradual buying on the way down. This would qualify as a “5-Day Retest” of a previous market low. The market doesn’t even have to be near the previous lows in terms of price levels. It only has to drop hard for two days in a row. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up to challenge the old highs once again.
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STOCK MARKET STRATEGY FOR June 14, 2015: The stock market declined into last Tuesday’s bottom and then rallied sharply for the next two sessions. The “5-Day Retest Rule” from my book implies that an important intermediate bottom could occur on a hard drive down towards last week’s low especially if it is accompanied by obvious bad news. So if Monday closes with a news-influenced sharp decline, be ready to pull the trigger and go long on early weakness Tuesday. Just remember to limit your risk by only buying broad-based, actively-traded ETFs incrementally.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines early next week (Tuesday or Wednesday), we should be prepared to “catch the falling knife” with gradual buying on the way down. That’s because the pattern of last few years has been for markets to make only “V-Shaped” bottoms. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ) as there is no telling which sectors will perform best. You can also take small positions in the leveraged ETFs (DDM, QLD, SSO) for a quick ride up.
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STOCK MARKET OBSERVATIONS FOR June 7, 2015: The stock market has declined to a point where its next move may be a reversal to the upside. During this past week, some key breadth indicators reached deeply “oversold” levels. All that remains is for the market to make another move to the downside on obvious bad news. That would set up the reversal and rally we have been anticipating. But be careful here as well. There is an alternative strong case for the market going on another leg down.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market declines next week (Tuesday, Wednesday or Thursday), we should be prepared to “catch the falling knife” with gradual buying on the way down. That’s because the pattern of last few years has been for markets to make only “V-Shaped” bottoms. The safest bets will be in the major broad-based Exchange-Traded Funds (DIA, SPY, QQQ, IWM) as there is no telling which sectors will perform best. However, the transportation sector does appear to have bottomed and its IYT Exchange-Traded Fund should offer some downside protection.
IMPORTANT NOTE: Although the current correction has been long enough in terms of time or duration, it has not done enough in terms of extent or price erosion. This shallow downtrend would appear to need a spike down to support levels around 17600 in the Dow Jones Industrial Average.
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STOCK MARKET OBSERVATIONS FOR May 25, 2015: The stock market remains within striking distance of its all-time highs. The recent period of consolidation and decline has moved breadth indicators closer to “oversold” readings. In fact, the daily TRIN readings have been on the “sell” side for 12 out of the last 13 trading sessions. This sets up a possible buying opportunity in the near term if the market can continue its decline for the next 5-7 trading sessions. Look for “obvious bad news” to provide the necessary cover for entering the market to go long.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: If the market continues its decline in the next week to 10 days, we could be presented with a short-term buying opportunity. Since this could result in another “V-Shaped Bottom,” you’ll need to have some positions in place before the tide turns. This means that you’ll need to divide up your capital and wade into the market waters in gradual increments while trying to catch the proverbial “falling knife.”
Your best vehicles will probably be broad-based Exchange-Trade Funds such as the SPY, DIA, and QQQ. For more speculative accounts, the SSO and QLD may provide extra leverage for the initial thrust out of the oversold condition. But be careful here, stay nimble, and don’t get too greedy. The next rally from here may only turn out to be a consolidation period before a 2nd nasty leg down starts.
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STOCK MARKET OBSERVATIONS FOR May 25, 2015: The stock market remains at the top of its trading range as it is working off its “overbought” condition. Internal breadth indicators now have “neutral” readings which suggests that the market can go in either direction. But an ideal buying opportunity is not present until the majority of indicators show “oversold” readings. So while the market can go in either direction, I would expect a slight move downwards before the market breaks out to the upside.
Key underlying market indicators show the following:
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ADVICE TO TRADERS AND INVESTORS: Don’t be surprised if the market decides to breakthrough resistance and go on to new highs. The stall at the top of the trading range is allowing the internal market to balance out. Unfortunately, there isn’t a pivot point in which to buy the market unless we get a little more scare to the downside. If and when the market does break to the upside, it will climb the proverbial “wall of worry.”
Categories: Stock Market Strategy Tags: AAPL, ETF, invest, investing, investing tips, investments, money, money mastery, QQQ, SPY, stock action, stock market, stock trading, stock trading tips, stocks, tony robbins, trading, trading tips, wall street
