$GS $JPM $BAC $DB – banks of a feather bounce together…

Update April 3, 2107:

After eight days down in a row on the Dow, today’s bounce was nearly inevitable.  Eight days in a row is a lot when four is most often the magic number to buy for a bounce.

And as inevitable, an oversold sector is likely to bounce with it.  In this case, the financials – that is, the banks — GS, leader to the downside, as well as JPM, BAC, and even the deadest dog of the bunch, DB, which has some serious fundamental problems all its own (besides being the last lender to loan to Donald Trump).

Most likely this bounce will continue in a rise to resistance, most likely to bottom of the boxes indicated on the chart below at the point the stocks fell through support going into this recent decline.

If they turn over again with lower highs sometime soon…say, next week…that will not be good for any bull market going forward.  In other words, head up the bull might actually be stumbling.

(right click on the chart for a clearer view)



#MarketTiming – the trend is…

The trend is your friend.  Heard that old saw a thousand times, and yet how many often is it forgotten?  The trend is your friend.  True last year, true this year.  True in 1920, 50, 70, 90 and now.  True, in 1929, and in 1987, and in 2000, and in 2008.

True now.

TREND TRADE: Long from open, 11/9 – UPRO up 14.6%, TQQQ up 6.4%, TNA up 37.1%, XIV up 23.8%.

SWING TRADE: Long from open, 12/16 – UPRO up .3%, TQQQ up .7%, TNA up 3.4%, XIV up 5.6%.

DAY/SCALP TRADE: Long on open, flat on close – UPRO up .25%, TQQQ up .55%, TNA up 1.45%, XIV up 1.61%.

Among the other 3x-leverage ETFs on the trend trade from 11/9 ERX is up 25.6%, SOXL up 27.6%, FAS up 30%.

Notable stocks on the trend trade AAPL up 5.2%, GS up 27.7%, TSLA up 9.2%, UAL up 25.9%, BID up 16.7%, FB down 4%.

Market timing the trend – quite spectacular, still on-going….


#StockMarket – it has to stall before any fall…

And there is hardly any sign of either – the stall or a fall – as index breakouts begin (or continue) everywhere.

Hard to believe this rally, much like the post-Brexit rally but here it is, the same marching song,  with the lows above the lows on the NYMO, McClellan Oscillator (green circles on the chart below), tapping out the same beat while the rising NYSI, the McClellan Summation Index, plays the baseline.

Needless to say this has been a spectacular rally since the NYMO first turned up (at the end of that nine-day October decline) on 11/03.  Among the 3x-leveraged ETFs I’ve written about off and on here for years, TNA is up 47 percent from there; TQQQ up 12.3 percent; UPRO up 16.5 percent; XIV 31.5 percent; and as to sectors, BIB up 33.5 percent; FAS up 30 percent; SOXL up 28.6 percent and ERX up 22.2 percent. If one had to guess, it would be TQQQ catching up to the others going forward.

From the last upturn in the NYSI posted here in my “IT RHYMES” thread (see an updated second chart below), TNA is up 6.3 percent; TQQQ up 6.8 percent; and XIV up 13 percent.

Once again, the wonders of breadth as monitored by the McClellan Oscillator.

If the bears have any hope at this point it is the possible choppiness that may come up Tuesday and through the holiday, and could surprise with more downside than I’m suspecting, but after that I believe the market continues its march higher into the Santa-Claus rally.

(right click on the chart for a larger view)



#Nifty50StockList – picking bottoms with 40-plus sells

Again and again, my nifty-50 stock list moves from oversold to overbought and back again to oversold like an ever spinning wheel within the market’s spinning wheel…

And each time there are 40 or more of the 50 stocks on sells, it’s time to sit up and take notice since that is the number that most often signals either the bottom or the beginning of a bottom on each down swing.

This is just FYI, but it is what market timing and swing trading are all about, and the results can be quite remarkable.  For instance, the last 40-plus sell day was November 13th for a buy on open of the 14th.  On that buy signal, among the leveraged ETFs  TQQQ is up 10.6% (tracking the Nasdaq), TNA up 6.6% tracking the Russell), and UPRO up 10.7% (tracking the S&P 500).

Leveraged sector ETFs include ERX up 12.1% in energy, BIB up 10.7% in biotech, and FAS up 8.6 tracking financials.

Notable stocks on the same signal – AAPL up 4.7%, BIDU up 6.3%, and NFLX up an amazing 15.8%.

This is all in just three trading days so far. Nuff said, I guess.

(click on the chart for a larger image)