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Posts Tagged ‘SPY’

WALL STREET CRAPS STOCK MARKET STRATEGY JUNE 16, 2022

June 17th, 2022 Comments off
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The stock market has turned sharply lower after the FED announcement of its latest interest rate hike. The one day rally before this announcement was preceded by a couple of gap down market days. But in the process, the internal indicators are now all in “oversold” territory which signifies that a market bottom is likely to occur. This is particularly true in “Bull Markets,” but in “Bear Markets” these kind of oversold conditions are often a signal that a “Stock Market Crash” is about to happen. Because of this, it would be smart to wait until next week for a possible bottom following a “stock market crash” on Monday or Tuesday.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current reading of 46 but still needs a few more days before reaching the buying zone. Thus, it is saying that the market needs more time in order to find a bottom and in the meantime it could continue on its sharp downward path.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 14. Recent intermediate-term market bottoms have had readings under 5.

WALL STREET CRAPS STOCK MARKET STRATEGY APRIL 26, 2022

April 27th, 2022 Comments off
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The stock market has turned sharply lower since its midweek highs of last week. There have been 3 strong moves down with only a temporary reprise on Monday. Momentum seems to be suggesting that buying this drop will be akin to “catching a falling knife.” However, the internal indicators are either approaching or are within the oversold range suggesting a bounce in the near term. The timing of that bounce could be either be this coming Friday or Monday for those interested in a quick high risk trade with tight stops to the upside.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current reading of 39 but still needs a few more days before reaching the buying zone. But mostly, this indicator is showing that there has not been base building for any kind of sustained rally. Thus, it suggests that even a sharp bounce will be short-lived.

Fear/Greed Index: This popular indicator is in the “Fear” territory with a reading of 26 which is one point away from “Extreme Fear.” The strength of this decline suggests to me that we may finally get a sub-10 reading in this indicator when the market finally bottoms. And if it does so, then there could be a low-risk rally worth participating in. But right now, I’d expect only short-term bounces with high risk upside trades.

WALL STREET CRAPS STOCK MARKET STRATEGY APRIL 3, 2022

April 3rd, 2022 Comments off
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The stock market has turned in a spectacular rally in the face of bad news climbing the proverbial “Wall of Worry.” With a few internal indicators getting in the “overbought” range, you could expect some downward or sideways action over the near term. But the intermediate term (next few months) is still anyone’s guess. The Elliott Wave followers are looking for continued higher prices, while other’s see a limit to the upside and plenty of economic reasons for it to go down. Personally, I am waiting for another good set up like we had two weeks ago in order to make a good bet with strong odds.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator had an “oversold” reading of 29 on March 12, just two days before the bottom. It had been in the oversold area for several weeks and the dots were “clumping” in a basing area. So when the market turned decisively to the upside these past two weeks, you could expect that move to be sustained. So buy the dips!

Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 49. This means that the general market can go up or down with an even probability. So it is not an optimal time to go long or go short. Note: This indicator got an “Extreme Fear” reading of 17 in mid-March which at the time did not seem low enough to a climatic bottom. So instead we got an exhaustion to the downside with too much pessimism and negative news that created a decent trading bottom. Has this been a “Bear Market Rally” or the start of a new “Bull Market?” That’s the question for many.

WALL STREET CRAPS STOCK MARKET STRATEGY MARCH 12, 2022

March 12th, 2022 Comments off
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The stock market had a mild down week against a challenging news backdrop and thus sets itself up for either a strong move up or down in the near term. My hunch is that the market will do both in the coming week or two. And that is a strong move down followed by a strong move up. But catching the final bottom in this scenario is bound to be tricky. Unless you are an experienced trader, it might be smarted to control your risk with smart “betting strategies” – buy even chip size over an even time frame in active ETF positions. Anticipate a possible scary plunge and reversal based on “obvious bad news.”

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has a current “oversold” reading of 29. It has been in the oversold area for several weeks and the dots are clumping in a basing area. When the market turns decisively to the upside, expect that move to be sustained.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 14. It has been in this territory for several days now and only needs to continue going down towards a sub-5 reading ideally. That could happen in the next week or so with the negative news background and the gradually declining sentiment.

WALL STREET CRAPS STOCK MARKET STRATEGY MARCH 5, 2022

March 5th, 2022 Comments off
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The stock market has made a strong rebound from the deeply oversold bottom from late February’s invasion day. But that momentum appears to be waning with the prospect of more weakness over the near-term. The internal indicators are in middle ground suggesting that the general market is not deeply oversold or overbought. Therefore, the short-term market direction is up for grabs. With the general climate of the market, I would favor a retest of the late February lows with enough bad news to scare the weak Bulls to capitulate. That climatic bottom could come in the next 5-8 trading sessions.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator is still bottoming after a long decline for many weeks now, but it is starting to turn up. This points to a possible intermediate term bottom or powerful bounce in the making.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 17. It has taken a lot of time to get this index into the “Extreme Fear” range, but it now has the possibility of going to the sub-5 reading that has often marked the bottom of major moves in the recent past. This index is telling us to get ready for a possible buy signal on a scary retest of the February lows.

Fear & Greed Index

March 1st, 2022 Comments off

The Fear & Greed Index moved strongly into “Extreme Fear” territory today with a reading of 19. Solid intermediate-term bottoms have occurred when this indicator gets as low as 2 or 3. There is a chance that this indicator is setting up for such an occurrence during next week. That provides enough time for more bad news to hit bullish investors into dumping their holdings at the bottom in a brief period of maximum fear.

WALL STREET CRAPS STOCK MARKET STRATEGY FEBRUARY 26, 2022

February 27th, 2022 Comments off
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The stock market had an extremely memorable shorten week with the invasion of Ukraine news backdrop. After a climatic bottom on Thursday’s opening, the market rallied strongly during the remainder of the day and on the following Friday. It was a classic bad news bottom and many are wondering if that was THE BOTTOM or whether there will be a retest in the coming weeks. These are turbulent times and for those with a weak stock market stomach, this may be a time to sit on the sidelines. Another good time to go long could be on a retest of last week’s low.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has been bottoming after a long decline for many weeks now. It is hard to see any reliable signal here as it may still fall off the cliff and go to a lower bottoming level. But overall, it says that the risk is in trying to short this market as strange as that may seen.

Fear/Greed Index: This popular indicator is only in the “Fear” territory with a reading of 31. At the December 2018 bottom, this indicator reached a reading of 3. This week it reach an “Extreme Fear” reading of 25 which is just barely in this territory. I would expect a much lower reading if this is to be the final bottom and gives me the strong conviction that we still have more downside to go.

WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 29, 2022

January 29th, 2022 Comments off
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The stock market had a highly volatile week ending with a strong rally on Friday. Monday appeared to be a climatic low with several retests during the week. Unless you were an experienced day-trader, it would have been a difficult week to trade. It feels like the sentiment is strongly negative with bad news dominating the headlines. Friday’s rally may just be the fact that too many investors were on the negative side of the equation. I would expect there to be continued volatility and not a market for most investors to participate in unless in small amounts for the fun of it.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has been declining for some time and usually needs a cluster to dots in the bottoming area before advancing. But when it turns after a cluster, it should be a sustained rally upwards.

Fear/Greed Index: This popular indicator is only in the “Fear” territory with a reading of 36. At the December 2018 bottom, this indicator reached a reading of 3. It is amazing to me that it is this high and did not come close to an “Extreme Fear” reading this week. That makes me very cautious about the current rally that started on Friday and maybe the market needs another leg down to make this indicator have lower readings.

WALL STREET CRAPS STOCK MARKET STRATEGY JANUARY 8, 2022

January 8th, 2022 Comments off
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The stock market had a rocky start to 2022. With several non-confirmations during the last week of December, it is not surprising that there would be problems this week. With that being said, the general market could stay in this range without a major move in either direction. But with the large percentage losses in many of last year’s dynamic growth stocks, the background is set for a final plunge for these shares. However, there aren’t any signs of capitulation that would mark that final bottom. So for now, I would recommend keeping your powder dry and resist the temptation of going long until we see more signs of extreme behavior/sentiment.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has rallied from its December 20th low and is in the process of clustering at a peak before heading lower again. A tradable bottom usually isn’t signaled unless the clustering starts after a sustained move down. That point is still weeks away in time.

Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 52. At the December 2018 bottom, this indicator reached a reading of 3. So we are a long way away from a swing trade to the upside. A minimum reading of 25 is required to reach the “Extreme Fear” range.

WALL STREET CRAPS STOCK MARKET STRATEGY DECEMBER 5, 2021

December 5th, 2021 Comments off
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The stock market had a volatile week with large movements in both directions. But under the surface, many stocks experienced large retracements from their all-time highs. With the negative news backdrop of the new COVID strain and larger than expected inflation projections, the market is ripe for a crash and reversal this coming week. If you’ve been waiting for an opportunity to make some fast money, this week may be your week. But this next rally may be a narrow advance so I’d stick with large-cap stocks like those in the Dow Jones Industrial Average.

Key underlying short-term timing indicators show the following:

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NYSE McClellan Summation Index: This indicator has broken down and has a current oversold reading of 15. It satisfies the requirement of a bottom condition, but usually needs a cluster of readings in the lower area before rallying for a new up leg.

Fear/Greed Index: This popular indicator is in the “Extreme Fear” territory with a reading of 20. At the December 2018 bottom, this indicator reached a reading of 3. But overall, this indicator is sufficiently oversold to support a bounce upwards.