The stock market has been correcting for the last week with many of the short-term indicator within striking distance of oversold readings. Investors and traders should be very careful in this time period as deep oversold readings often occur during the September-October time period. This week should be interesting with Apple’s earnings, new iPhone and China news affecting this bellwether stock.
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. It has been in the oversold range for some time now and just recently started to decline once again.
Fear/Greed Index: This popular indicator is in the “Neutral” territory with a reading of 51. The next solid upside trading opportunity doesn’t appear unless this trusty indicator hits a reading of 25 or less (Extreme Fear).
The stock market has been correcting for the past few weeks since the end of July/early August. The technology sector has taken a harder hit than the rest of the market. The internal indicators show that the market can go in either direction, but the NYSE McClellan Summation Index suggests that the decline has more time to go. But price-wise, the SPX 55-Day Moving Average is getting close and provides support to the market for bounce. But it is unusual for a market to reach an intermediate hit and an intermediate bottom in the same month.
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 45. This indicator has been trending lower for 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 67. The next solid upside trading opportunity doesn’t appear unless this trusty indicator hits a reading of 25 or less (Extreme Fear).
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
