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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

?+ 9/25/20

Up 8/21/20

?+ 9/18/20

Sub-Intermediate

?- 9/15/20

Dn 9/11/20

Dn 9/21/20

Short term

? 9/4/20

? 8/18/20

? 9/4/20


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, January 19, 2018

Daily update 1/19 Dealing with a Runaway Market

Major indexes make new high closes.


That is a bit of an odd looking pattern the last four days.  Breadth was +65%.  New highs were only 236 compared to the 406 we had a few days ago.  New lows were very elevated once again at 82.  Bond funds likely the culprit there.


The futures refuse to pullback.  They popped back out of the channel again.  As extended as they are it might be tough to stay there, but I guess you never know.  Maybe no price is too high!


The green count is approaching overbought levels again. 

Here is a look at the weekly version.


The green count has reached overbought territory.  The last time we did that was back in March and the market consolidated for a while.  This could continue higher in the short term.  A clear peak should give us an indication a consolidation period has begun.

A lot of people were talking about the rise in the 10 year rate today.  It is up to the highest level since 2013.  The 10 year was slightly over 3% that year at the peak.  It obviously did not hurt stocks at the time.  However, about a year later the U.S. economy began to slow down.  That slow down lasted until the spring of 2016.  Logically one would think that rates would have to get up near 3% again to become a problem.  Between here and there we could see more money move from bonds to stocks.  Possibly driving stock valuations into the stratosphere.  The way this year has started out it is hard to argue with that possibility.  So far no dip is too small to buy!  I am not sure what happens should rates start falling again.  Short term rates have gotten above SPX's dividend yield.  I don't know if there is some level that would cause some money to flow back into bonds or not. 

Interesting article on using long term valuation models to forecast near term returns.  Dealing with a Runaway Market


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.