#MarketTiming — well…that was a big bounce…

My Nifty-50 stock list went from 39 stocks on sells with 30 oversold at the beginning of the day to 43 on buys and 11 overbought at the close. There were 34 new buy signals on the stocks today.

Thirty-four buys in one day. Can’t remember when last a one-day blast like today happened in the stocks.

I think the telling number going into today’s trading was that 30 oversold in addition to upthrust from the lower green line and arrow on the chart posted yesterday and updated today (below).

This feels like a buying panic that could I suppose carry to new highs especially on the Nasdaq.

On the S&P it seems more likely it goes up to the levels it was at when it sold off last week and stall (that would be about 247-248 on the SPY, which closed at 246.54 today). If so then we will likely see a retest of last week’s low levels, particularly because long-term breadth is still negative and there is no divergence in the short-term breadth numbers.

But for now this is an obvious bull market that is still going up until one day it is obviously going down.

SWING TRADING SIGNALS:

PRICE: Buy. Price (Day 2).
SHORT-TERM BREADTH: Sell. (Day 2).
VOLATILITY: Buy, (Day 2).

CONTEXT:

LONG-TERM BREADTH: Sell (Day 9).
CNN MONEY’S FEAR AND GREED INDEX: (39, but still at a greed level).
NIFTY-50 STOCK LIST: 43 Buys; 11 Overbought, 1 Oversold, 34 new buys today, 0 new sells.

Stocks in the Nifty-50 list on buy signals: too numerous to list but highlights from on the day include KEM up 7.5%, NVMI up 6.2%, PNK up 6.0% and MOMO up 5.5%.

(click on the chart for a larger view)

Niftyfifty2017-08-13_1806

$SPY $QQQ – bouncy bounce time…

Looks like it is time for the bounce from Friday to continue.

All three of my swing-trading signals – Price, Breadth, Volatility – gave buys for Monday’s open after last Thursday’s hard slam to the downside and Friday’s bounce.

Everything is still oversold.

My Nifty-50 stock list had 39 nine stocks on sells Friday for the second day in a row. Forty sells is a marker for a bottom of a swing but sometimes the market just goes to far to fast and doesn’t quite get down that far. Also 30 of those stocks are oversold. Thirty is a lot.

The plunge in price Thursday took the Nasdaq Comp to a level that often marks a bottom, and made Friday’s bounce almost a sure thing (see the chart below of the Nasdaq Comp with the previous signals). Given this bull market it is more likely than not we move up again now.

Caution is needed, however, since long-term breadth remains negative and there is no divergence in short-term breadth so it should be noted that a test or retest of Friday’s lows some time this coming week is also likely.

SWING TRADING SIGNALS:

PRICE: Buy. Price (Day 1).
SHORT-TERM BREADTH: Sell. (Day 1).
VOLATILITY: Buy, (Day 1).

CONTEXT:

LONG-TERM BREADTH: Sell (Day 8).
CNN MONEY’S FEAR AND GREED INDEX: (28, greed level).
NIFTY-50 STOCK LIST: 11 Buys; 1 Overbought, 30 Oversold, 4 new buys today, 4 new sells.

Stocks in the Nifty-50 list on buy signals: EXAS, CC, CZR and MELI.

(click on the chart for a larger view)

Niftyfifty2017-08-13_1806

$UVXY – big swing but watch out this week…

Got the UVXY swing for 50-plus percent off the 11 consecutive days down.

See the July 23rd post below: “UVXY – what a week this could be…”

Note the red dots on the UVXY chart below and the reversal on the VIX Friday.

Likely some upside to continue from Friday’s bounce into this week before any retest of this last week’s decline.

(click on chart for a larger view)

uvxy-vix2017-08-13_1647

#MarketTiming – chopping at highs…

Kind of a weird choppy day.

Dow up a lot, SPY and Russell touch new highs, Nasdaq not hardly up at all.

And yet two of my three end-of-the-day signals – price and short-term breadth – are on buys signals, the third – volatility – missed registering a buy today by a whisper so I guess we’ll see what tomorrow brings.

Long-term breadth remains positive so there is a good chance the market does move higher tomorrow.

This is a ragged and scary market now which is what bull markets do to traders while investors just blithely hold on until all hell breaks loose (as it always does eventually). The VIX particularly at the moment is making a low not since 2007 just before the last time hell came to visit.

SWING TRADING SIGNALS:

PRICE: Positive. Long (Trade Day 2).
SHORT-TERM BREADTH: Negative. Flat (Day 1).
VOLATILITY: a sell on tomorrow’s open, Flat (Day 2).

CONTEXT:

LONG-TERM BREADTH: Positive (Day 10).
CNN MONEY’S FEAR AND GREED INDEX: (81, rocketed to the extreme greed level).
NIFTY-50 STOCK LIST: 30 Buys, flying; 22 Overbought, 3 Oversold, 8 new buys today, 3 new sells.

(click on chart for a larger view)
MASTER2017-04-17_1628

$BABA from day one…

With BABA at new all time highs, I marked up the chart below mostly for fun, (although over the years it has been useful), and to suggest one could make a living trading just one stock.

(click on chart for a larger view)

BABA_2017-07-12_1124

$SPY – today the bounce, tomorrow the rally?

Had 44 sells on my nifty-fifty stock list Thursday. Forty plus sells usually marks, if not the bottom of a swing, the beginning of the bottom (see my simple chart below). Now couple that with the NYMO turning the NYSI up again, and the VIX plunging below the magic 15 level (again, after a fifth climactic day up in a row), and the indexes turning up from oversold, and today’s bounce was (short of nuclear war over weekend) almost inevitable.

Now the question is can the bounce continue? Probably, and if the next dip (tomorrow, or whenever) can’t take out what is staring us in the face, I SPY a rally to the top of the SPY range or higher by sell-in-May-and-stay-away time.

And if the next downturn does trip this setup (tomorrow, or whenever), well…that will be rather bearish.

(click on the chart for a larger view)

MASTER2017-04-17_1628

$USD – a vote on the country ever day…

Given that currency trading is a vote by the whole world on your country every day and now that President Blowhard believes the dollar’s recent rise was because of “confidence” in him instead of an overflow from the Obama Administration, the US dollar is likely to decline now.

Trump commented that yesterday that the dollar was too strong because of “confidence in me”, but the currency has been going sideways to down since his inauguration.  Confidence in him?  More likely a rising lack of confidence.

And of course, the US dollar always does decline in Republican Administrations.

That was never more pronounced in historical terms than the day George W. Bush made his “Axis of Evil” speech.  That moment was the precise top for the dollar in his term.  It was as the entire world heard that and thought that guy is crazy and ran for cover.  It declined 40 percent and has not completely recovered.  No analysts ever seem to want to talk about it, preferring to say a weaker dollar makes American multi-national companies more competitive, but think what a drop of 40 percent in net worth means to the biggest economy in the world.

Subsequently, from the day Obama locked up the Democratic Party’s nomination in 2008 the dollar bottomed.  It was as if dollar bulls knew he would be President and were, after the raging uncertainties of the Bush Administration, damn happy he would be.  There were some wild swings in the currency as Obama battled Congressional Republican obstruction (shutting down the government…) but once he was reelected, it was clear sailing to the upside until now.

So what now?

The new era of raging uncertainties is just beginning so, despite professed Fed Reserve tightening, it is probably best to be defensive, if not downright bearish, on the US dollar.

(right click on the chart for a larger view)

USD2017-04-12_1312

#MarketTiming – on the verge of a sell off…

TREND TRADE: Down from open, 1/20.

SWING TRADE: Neutral from open, 1/23.

DAY/SCALP TRADE: Selling the bounces with the trend trade

PRICE TREND: Nasdaq down 1 day, whipsawing.

SETUP:

Market breadth as measured by the McClellan Oscillator (NYMO) and Summation Index (NYSI) has turned negative with a falling NYSI and highs below highs on the NYMO (see first chart below).

One of the great things about the McClellan is that the two indicators give hints ahead of time as to what is likely to come next in the general market.  If there is another high below a high on the NYMO, especially below the zero line, it will likely be a gift to the bears.

The McClellan is not infallible but it almost is.

In addition (see second chart below) this post-election rally has been mirroring the post-Brexit rally almost perfectly.  If that continues, it is also saying a sell-off is right around the corner.

To state the obvious, the sell-off itself indicated above has not,  as yet, happened.

But maybe tomorrow.  An age-old “turn around Tuesday”? If not it likely to be soon.

(click on the charts for a larger view)

masterchart2017-01-23_2245

trendswing_2016-12-12_0818

$USD – the dollar historically speaking…

Historically speaking, the US dollar goes to hell under Republican administrations.  Does anyone actually expect it to be any different this time?

May take a while since Janet Yellen’s term has year or so to go and apparently the Federal Reserve is now determined to hike interest rates. But eventually, the businessmen now running government (who of course are totally unaware that the government is not a business) will want to debase the currency.

There is the belief that a weaker dollar enables American companies to more easily compete against competitors around the world.  Maybe so. But every time I look up while the dollar is down, it is the competitors buying US companies instead of buying their products.

Oh, well, this Bud’s for you.

(right click on the chart for a larger view)

us_dollar_2017-01-16_1053

The #StockMarket – it rhymes…

It is said history may not repeat so much as it rhymes.

Repeats, rhymes, whatever.  This time looks more like a repeat.

The chart below featuring the Nasdaq Comp (the heavy green line with the diamond) shows the market action pre-election and the reaction since in comparison to the Brexit sell-off in June (the plunge on the left). Note the one-day dips (most recently last Thursday) before the next big run in both instances (the darker green circles), which is to say the market is above to keep going higher, maybe all the way to Christmas.

Yeah, at least a rhyme.

(right click on chart for a larger view)

it_rhymes