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Trend table status

Trend

SP-500

R2000

COMPX

Primary

Up 7/31/20

?- 3/31/20

Up 5/29/20

Intermediate

Up 10/2/20

Up 8/21/20

Up 10/9/20

Sub-Intermediate

Up 10/15/20

? 10/21/20

Up 10/13/20

Short term

? 10/19/20

? 10/19/20

? 10/19/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Friday, November 3, 2017

Daily update 11/3 Stocks Are Making History, But Will They Follow History?

Mixed day.


Good earnings from AAPL sparked some buying.  Breadth was -52%.  New highs dropped down a bit to 135.  New lows also dropped, but remain very elevated at 76.  Volume dropped considerably from yesterday. 


The futures popped out over the upper channel line again and were there at the 4 PM close.  However, after the close they pulled back a bit.


Despite the new high the green count slipped a bit.  No sign the current rally is broadening out.

The transports, financials, and small caps all closed in the red.  This is not the strongest looking new high I have ever seen.  Great tech earnings have kept enough people buying to push SPX and COMPX higher.  However, R2000 made its closing high way back on 10/5.  IYT followed with its high close on 10/12.  It has been 10 days since the all company advance/decline line has made a new high.  Negative divergences continue to develop.  None of which matters unless or until SPX reverses.  It has been 10 trading days since SPX hit 2575 and the index has managed to only gain 12 points a whopping .4%.  The NYSE tick indicator is spending a lot of time in negative territory the last two weeks.  I am not sure I have seen this behavior in this bull market while SPX was making new highs.  I think that goes along with the high volume we have seen that started about the same time ticks started to act funny.  It appears to me some people are taking money off the table here.  What we don't know is if they will eventually overrun the buyers or not.  I saw an article today talking about how it was still ok to buy these high flying tech stocks to play the melt up into year end.  Once again the phrase melt up was used.  I think I see or hear that just about every day now.  That is certainly one possibility, but I am not sure it is the only one.  I guess we will see if the big volume and negative tick readings continue.  If they do there will be some risk the sellers overtake the bulls eventually.

Interesting article on seasonality.  Stocks Are Making History, But Will They Follow History?


History says the market should have a pretty strong tailwind the next 6 months.  Eight of the nine years with similar behavior were positive over the Nov. to Apr. period.  Pretty good odds.  Of course there could always be a second time out of 10 that fails in that regard.  Unfortunately nothing is 100% in the markets.  With ultra bullish sentiment already it will be interesting to see how this plays out.


Have a great weekend.

Bob

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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.