“Do you know what happens in a bull market? Prices open up lower and then go up for the rest of the day. In a bear market, they open up higher and go down for the rest of the day. When you get to the end of a bull market, prices start opening up higher. Prices behave that way because in the first half hour it is only the fools that are trading [pause] or people who are very smart.”
Source: Schwager, Jack D. (2012-04-25). Hedge Fund Market Wizards. John Wiley and Sons. Kindle Edition.
Categories: Trading & Investing Quotations Tags: AAPL, investing, QQQ, stock action, stock market, stock tips, stock trading, stock trading tips, trading, trading tips, wall street
“Staring at the screen all day is counterproductive. He believes that watching every tick will lead to both selling good positions prematurely and overtrading. He advises traders to find something else (preferably productive) to occupy part of their time to avoid the pitfalls of watching the market too closely.”
Source: Schwager, Jack D. (2012-04-25). Hedge Fund Market Wizards. John Wiley and Sons. Kindle Edition.
Categories: Trading & Investing Quotations Tags: AAPL, investing, QQQ, stock action, stock market, stock tips, stock trading, stock trading tips, trading, trading tips, wall street
MARKET OBSERVATIONS FOR July 17, 2013: The stock market has been pushing upwards with an absence of fear. It is now at the top of its trading range in an environment of investor euphoria. While this may not signal the end of the bull move, it should mark the general end of this current cycle. I’m sure that the first correction down from here will be met by dip buyers. But it’s the nature of the next rally that will determine whether the market has the strength to push to new highs or retreat to the lower-to-middle part of the trading range. But don’t be surprised if you look back at this time period and wish that you had sold out.
Key market indicators show the following:
For now, my advice for traders is to buy into any dip that is triggered by obvious bad news for a quick ride to test the recent highs. Active broad-based exchange-traded funds to consider buying would include DIA, SPY, QQQ, SSO. The NYSE Summation Index shows that the market should be strong for several more weeks. But for most investors, this time period represents a period in which to lightened up on existing long positions.
Projected Final High: Tuesday July 23
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The indicators for Apple (AAPL) read as follows:
- Current price: 430.20
- Relative Strength Indicator = 56 neutral
- Ultimate Indicator = 60 and heading higher
- Money Flow Indicator = 61
- 50-Day Bear Market Moving Average = 427
The stock of Apple is finally above its 50-Day Bear Market Moving Average. It is also right in the middle of its price pivot points. But given its Money Flow Indicator pattern of cyclical lows, I’d bet that new lows for the stock are some 3 months away. That also means that it probably has at least one more good month of advance in it. This stock may continue to move independently of the general market.
MARKET OBSERVATIONS FOR May 29, 2013: The stock market reached new highs on Monday in a possible “key reversal day.” This could end up being the “internal high” for the market. With that in mind, a smart trader or investor can expect a new closing Dow high in the next one to three weeks. If that new Dow high comes without corresponding strength in other major indexes or if the market becomes overbought on its march up to a new high, then the odds are good that the final top is in. Then you could expect the long-awaited correction to begin at that time with a minimum of one month in duration & a possible 50% retracement of the previous advance.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. The short-term indicators are near “buy” readings so any further declines should be contained.
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The indicators for Apple (AAPL) read as follows:
- Relative Strength Indicator = 54
- Ultimate Indicator = 52
- Money Flow Indicator = 46
This means that the stock of Apple is mid-ranged and can go in either direction. There isn’t any pressure on the stock to go in one direction verses the other. I’d personally stay away from this issue since it could just as easily go down 80 points as up.
MARKET OBSERVATIONS FOR May 13, 2013: The stock market reached new highs during this past week which were largely confirmed by other major indicators. But it wasn’t necessarily overwhelming strength across the board. This could be setting up the “head” of a potential “head and shoulders” top. That said, it implies that the topping process has much more time to chew up before getting anywhere near a full-blown declining phase. I’d look instead for the market to correct into another buying opportunity for a ride up into an overbought condition as it forms its right shoulder.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. It could be an oversold condition on the next decline which would set up a short but profitable ride up into its next overbought condition. If we get a few more closing highs that is not confirmed by strength, we could reach a point of exhaustion to the upside.
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As for Apple (AAPL), it’s the same advice as last week. The stock has finally broken above its Bear Market Optimized 50-Day Moving Average. After hitting its price pivot points in the 417-392 range, the stock of Apple rallied enough to end its Bear Market. But it doesn’t automatically mean that the stock will go into an instant bull market. Instead, the stock of Apple could remain in a neutral position while it “backs and fills” in order to form a stronger base for a more sustainable rally. I’d be looking to gradually accumulate the stock on a retracement into the 423-400 price range.
MARKET OBSERVATIONS FOR May 6, 2013: The stock market reached a new closing high on Friday. This blog anticipated this new high to be full of non-confirmations across the board. But this did not materialize. Instead, this new high was indeed confirmed by strength in the NASDAQ and neutral sentiment readings. Expect the rally to extend another 2-5 weeks at a minimum until a new high is reached in the Dow that is not confirmed by corresponding strength in other key areas.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A short term top could materialize in the next or so. The resulting decline could present us with a buying opportunity in the tech sector. But in the meantime, the stock market continues to “climb a wall of worry.”
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As for Apple (AAPL), the stock has finally broken above its Bear Market Optimized 50-Day Moving Average. After hitting its price pivot points in the 417-392 range, the stock of Apple rallied enough to end its Bear Market. But it doesn’t automatically mean that the stock will go into an instant bull market. Instead, the stock of Apple could remain in a neutral position while it “backs and fills” a stronger base for a more sustained rally. I’d be looking to accumulate the stock on a 50% retracement into the 424-403 price range.
MARKET OBSERVATIONS FOR APRIL 15, 2013: The stock market continues to climb the proverbial “wall of worry” and in the process causing short-sellers to throw in the towel. But with a few key oscillators near sell levels, I would expect a short correction in the near term. That would be followed by an upside test of the recent highs. That next rally should probably tells us whether it is the last move in this rally or if there is more to go. I wouldn’t rule out the idea that the current rally could last into June.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A short-term top is only a few trading sessions away. That could lead to a short & sharp dip that may be worth buying into. But it appears that the upside is generally limited from this point on.
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As for Apple (AAPL), the stock has drifted back down towards it base around 420. Meanwhile, the Bear Market Optimized Moving Average for Apple stands at 451. The price pivot points looks for a possible move to the 417-392 range. It may take such a move in order to get the last weak hands to give up their stocks to stronger long-term hands. After such a time, the good news will follow about the next dividend boost resulting in a new Apple advance. Be patient and wait for a possible move into this lower price range.
MARKET OBSERVATIONS FOR MARCH 30, 2013: The stock market hit two new rally highs this past week, despite the negative-news coming from Europe. This relentless rally still does not show any real signs of correcting downwards in price. What it has done is chew up time by moving sideways and allowing the technical features of the general market to reach equilibrium. This means that the stock market can still go in either direction over the near term.
Key market indicators show the following:
The choppy action in the market last week allowed the market to neutralize its overbought condition. The general market is up against resistance at the present level. This is one of those times in which it’s too late to buy, too risky to sell short, and probably one in which a savvy market player would be willing to “take some chips off of the table.”
My advice is to keep your powder dry in case the market has a sharp near term correction during the months of April and May. Such a scenario would set up a good buying opportunity in mid-May.
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MARKET OBSERVATIONS FOR FEBRUARY 17, 2013: The stock market tested its February 1st during this part week. I would expect one or two more tests of these highs (Dow 14018) in the coming 10 trading days. If we should get a short and sharp decline, it could be an opportune time to go long for a quick trip back up to the old highs. The internal breadth indicators are largely neutral and show that the market has been under a mild correction from within.
Just because the market isn’t going up, don’t assume that it has to go down. It is entirely possible that the market is simply chewing up time before continuing its march higher. And speaking of March, that is the most likely month to expect a more sustained drop in the market. Right now, there are just too many bears predicting the end to this rally. When the bears get quiet, it will probably mean that the final top of this rally is in. We may be close to that time, but I don’t think we are there quite yet.
Key market indicators show the following:
Last week, I mentioned the Long-Term Treasury Bond Fund (TLT), Gold Miners (GDX), Silver Trust (SLV), and the China ETF (FXI) as possible speculations. But based on last Friday’s action, I will resist the temptation to “catch the falling knife” and avoid these stocks until things settle down. As I stated in my book, Wall Street Craps: How to Play Today’s Hot & Cold Stock Market For Fast Money With Less Risk, “buying in a panic is just plain risky.” Most high-percentage bottom are not at points of maximum fear, but instead at points of maximum apathy.
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MARKET OBSERVATIONS FOR JANUARY 13, 2013: The stock market is continuing its rally from the “fiscal cliff” resolution. The internal indicators show that this last week has risen despite weakness in breadth. With a mixed bag of conflicting signals in price, sentiment, and breadth, a wise trader should be ready to “buy the dips” and “sell the rips.” Last Friday’s close was the second consecutive “new high” in this current rally. I would not be surprised if this current phase tops out either Tuesday or Wednesday in the coming week. That would be followed by an initial correction and a short, sharp retest of the highs. That kind of action will reveal much about the staying power of this rally. There is a decent chance that this market could surprise many by having much further to go on the upside.
Key market indicators show the following:
For now, my advice is to remain on the sidelines and let the market set itself up for its next big move. A short-term top could easily occur by the middle of next week. The following dip might be one in which to take positions if the breadth indicators become oversold (very possible). Right now, the overall market is a bit too extended. This almost always leads to a correction in order for the market to get healthy again. That correction may only be a short one so be ready to get in on the action.
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As for Apple (AAPL), the stock has drifted back down towards it base around 515-500. The RSI, Ultimate Indicator, and Money Flow Indicators do not show that it is a time to buy yet. For those who only follow the external price action of the stock, it is tempting to buy at the current levels. But to me, it seems like too many investors are “wishing” for the stock to move up because they are trapped at much higher purchase prices. This makes me think that the stock needs another down-leg or news scare in order to shake out the weak hands. Most current holders of the stock are now disappointed that it has not participated much in this year’s rally and the expiration of tax-selling. That disappointment translates into “nervous hands” and “scared money” which will cause those people to get emotional at precisely the wrong time. Keep this in mind and approach Apple cautiously from a contrary trading perspective.