WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR JANUARY 5, 2014
STOCK MARKET OBSERVATIONS FOR January 6, 2014: The stock market may have reached its internal high on New Years Eve. A new closing high 5 to 10 trading days after that date could very easily be the final external high for this major rally. But with most professional traders sitting out last week, the stock market can still do almost anything in either direction this coming week. Expect at least one more new high in January to occur before any kind of significant decline begins.
Key underlying market indicators show the following:
- Investor Sentiment – Short-term = 50/neutral | Long-term = 70/SELL
- NYSE Breadth Oscillator – Ultimate Indicator – 50 (neutral)
- Nasdaq Breadth Oscillator – Ultimate Indicator – 43 (neutral)
- NYSE % Above 50 Day Moving Average – Ultimate Indicator – 62 (neutral)
- Nasdaq % Above 50 Day Moving Average – Ultimate Indicator – 76 (SELL)
- S&P 100% Above 200 Day Moving Average – Ultimate Indicator – 49 (neutral)
- Stock vs. Bond Indicator – Ultimate Indicator – 57 (neutral)
My advice for traders and investors is to remain of the sidelines and let the market set itself up for the next major move. The internal indicators have mostly moved back into neutral readings after the declines on Thursday and Friday. The current list of oversold Blue Chips stocks and Exchange-Trade Funds that are near the lower range of their Money Flow Indicator and should be monitored on further weakness include: Apple , IEF, and MSFT. With such a short list of buying candidates, it implies that the market needs to correct further before moving to the upside.