#MarketTiming – Day 3 of the upswing…

The rally continued into its third day Tuesday. It is day 3 of the upswing but only day 2 of the trade (the buy was on the open Monday).

All buy signals are still in place and the market is likely to continue higher but it would not hurt to tighten stops to insure against any losses (as in never let a profit turn into a loss).

Longer-term breadth has remained negative for the fourth day. If it does not turn positive soon, there likely is going to be a sell down.

TRADING SIGNALS:

PRICE: Positive. Long on Monday open (Trade Day 2).
SHORT-TERM BREADTH: Positive. Long on Monday open (Trade Day 2).
VOLATILITY: Positive. Long on Monday Open (Trade Day 2).

CONTEXT:

LONG-TERM BREADTH: Negative (Day 4).
FEAR AND GREED INDEX: (41, falling into fear).
NIFTY-50 STOCK LIST: 40 Buys, rising; 26 Overbought, 2 Oversold.

The rally results so far (two full days):

TQQQ up 2.2 percent.
XIV up 2.70 percent.
UPRO up .20 percent.
TNA up .60 percent.
Net: 1.42 percent.

Needs to be noted: This is the second day the Buys-versus-Sells ratio on my Nifty-50 stock list has exceed 25, a level that often brings an immediate flat to down day (see chart of the Nasdaq Composite below with the ratio above the red line).

(click on chart for a larger view)

BuySells

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