Posted: October 19th, 2010 | Author: admin | Filed under: Uncategorized | Tags: Amp, Djia, Economic Data, Economic Numbers, Economic Reports, Economic Stimulus Package, Economic Stimulus Plan, Free Trial Link, Holiday Weekend, Market Timing, Monetary Policy, Nasdaq, Obama, Policy Announcements, Prospects, Rally, Resistance, Stock Market Strategy, Subscribers, Trade Deficit | No Comments »
Weekly stock market strategy updates that went out to subscribers during September 2010. To receive current weekly update sent to your email, click on the FREE TRIAL link at the top of the page.
Weekly Market Update 9/5/10
The market must have run out of sellers because the economic numbers I saw surely would not have caused a rally one or two weeks ago. The market started the rally on Wednesday based on positive economic data out of China. Does anyone else find that odd? China makes the stuff we buy not vice versa. So what likely happened was there was a lack of any new sellers willing to come to market prior to the holiday weekend.
This rally has successfully pushed us up against resistance and I would be very surprised if we saw another day like the last three. At most I think we have one or two moderate up days before this move tops out. If we do manage a close over 113 on SPY, I will have to reevaluate my position. We are light on domestic economic reports this week. The monetary policy announcements from Canada and England could shed light on the prospects for their economies going forward. President Obama has said he plans to announce a new economic stimulus plan this week. If this is another spending plan I doubt the markets will like it.
Weekly Market Update 9/12/10
Instead of one or two moderate up days like I expected, we ended up with a moderate week. The DJIA, Nasdaq and, S&P 500 were all up less than one percent for the week.
The markets yawned off the new proposed economic stimulus package. After all, it is only a measly $50 billion.
I am feeling like a glass is half empty kind of guy right now. I am just not buying the positive spin on some of these economic numbers. Normally a reduced trade deficit would sound like a good thing right? However when we import nearly everything that tells me we aren’t buying as much as we used to. Exports were up in the report but imports declined 2.1% from the prior month. We will see what the Retail Sales number looks like on Tuesday. Maybe those numbers will make the glass look half full.
We are right up against resistance at 113 again this week. Retail participation in the market has been seasonally week. Any breakout above 113 without retail participation would be suspect. I will be monitoring the market and sending a email out if I make any changes to the intermediate term forecast.
Midweek Update for 9/20/10
Well the SPY managed to close decisively over 113. I am going to have
to bite the bullet and make our intermediate term call bullish. I
recommend making a buy position in SPY for 25% of your portfolio on
the open Tuesday morning.
There are times when things just don’t add up, but you must go with
trend. I would prefer to be adding on a pullback, and I will be
adding to this position if we get one. The market is currently
overbought. However that does not mean a pullback is imminent. That
is why we are opening a position now.
Weekly Market Update 9/19/10
The SPY did manage two closes over 113 and the 14 period RSI did manage 3 closes over 60. Normally I would have to consider moving the short-term call to bullish. However, we have some conflicting signals going on. The QQQQ has decisively closed above the mid June and early August highs. The SPY and the DJIA have not been able to make a convincing close above their mid June and early August highs. In addition to that the volume has been week in the SPY and DJIA. A look at the On Balance Volume also shows the Nasdaq 100 is the only index that has made new highs with good volume.
The economic reports that came out this week were very neutral A New York newspaper is reporting that poll workers are having to file tax withholding forms for the first time ever. If poll workers are required to do this in all states this could give the employment numbers, that come out in October, an artificial boost.
I am waiting to see a couple convincing closes on the SPY before I will change the intermediate term call to bullish. I will send out a mid-week email if that occurs.
Posted: December 5th, 2009 | Author: admin | Filed under: Uncategorized | Tags: Amp, Current Administration, Czar, Fridays, Gut Feeling, Gut Feelings, MACD, Market Stock, Market Timing, October 31, Open Positions, Prognosticator, Resistance Levels, Stock Market Updates, Stock Updates, Subscribers, Uptick Rule, Wall Street | No Comments »
Weekly stock market updates that went out to subscribers from October 10 to the end of November 2009.
October 10, 2009
The market rebounded nicely this week. Now we have to see how
the market reacts at the resistance levels at the recent highs
in the market.
The trade date for the best 6-month strategy with MACD is
approaching this week. If the MACD is positive on October 16
we will go long. Currently the MACD could go either way by
the 16th. I will keep you posted with a mid-week update.
October 18, 2009
I am moving our stop on all open positions to 102.49. On Friday I
mentioned placing a buy stop $.05 above Fridays high. I am going to
raise that a little higher. I am adding 10% at a buy stop of 109.25.
If the market trades lower I will move the stop closer to the
previous days high.
October 25, 2009
I am moving our stop on all open positions to 103.10. If we were to
get stopped out this would be at break-even. If I do not like the
way the market is trading this week I may move that stop higher.
I try not to be a market prognosticator; I try to let the markets
show me what they want to do. The farther out you look the harder I
feel it is to predict what the market will do.
That being said something happen this week that gave me a gut
feeling similar to one I got in early March of this year. On
March 10, 2009 the SEC announced they were considering reinstating
the uptick rule. I won’t go into detail of that here, but the
S&P 500 index is up 58% from the March 9th close. This passed week
it was disclosed that the current administration’s pay czar would
limit Wall Street compensation. I will try to avoid getting into the
politics of this. Suffice it to say my gut is telling me this may
signal we are near a market top.
I do not trade on gut feelings, even though there are times I wish I
had. I will be watching how the market reacts this week and,
adjusting our stops accordingly.
October 31, 2009
I am keeping our stop on all open positions to 103.10. If we were
to get stopped out this would be at break-even.
Wow, how quickly market perceptions can change! The market was -1.9%,
+2.1%, and -2.8% Wednesday thru Friday. Needless to say volatility
is back. I thought maybe we were okay after Thursday’s market action,
but Friday changed that. Our stop at 103.10 is not far from Fridays
close of 103.56. With the market this close I do not see much point
in raising our stop. Until the market can make multiple closes above
Thursday’s high of 106.86, I will be very cautious of this market.
November 8, 2009
Well, our stop at 103.10 was hit on Monday. It was an unfortunate
fill because the low for the week was 103.08. Time will tell if
being on the sidelines is the place to be. I will need to see a few
more closes over 107 before a buy signal will be generated. I will
keep you posted.
This is a market in search of direction for its next intermediate
term move. Until the SPY breaks out of its current range bound by
103.00 and 110.50 it is anybody’s guess where the market will go.
I am seeing the development of a Head and Shoulders pattern combined
with a negative divergence in On Balance Volume. To me these along
with the recent spike in Volatility put the odds slightly in favor
of the bears. If something changes to indicate that we should be
looking to get back in, I will send out a Mid-week Update with
instructions on what to do next.
November 14, 2009
The SPY managed to close over 107 every day this week, but has not
been able to close above 110.50. If the market was not already
extremely overbought I would have probably suggested we buy earlier
this week. I am remaining on the sideline for the time being.
The Head and Shoulders pattern discussed last week was negated when
the market closed above the previous high set 10/15/09. On Balance
Volume also managed to move above the previous high. These are
positive developments, but price is king and price is indicating we
have only managed to trade .004% higher than the October high. I do
not find this very impressive at all.
Another indicator that I use quite frequently is Bollinger Bands.
They are a volatility-based indicator with expanding and contracting
bands above and below a moving average. A 20 period moving average
with bands 2 standard deviations above and below the moving average
should contain about 95% of all price movement. Anyway something I
have noticed (or maybe I read it somewhere) is that a close outside
of the bands is a good indication of a strong move in that direction.
There may or may not be a short pullback but the next major move
will likely be in the direction of that breakout. The 3 Period RSI
had 3 readings over 90 this week. Despite this strong showing the
SPY never closed within $1 of the upper Bollinger Band. I see this
as cracks in the foundation of this bull move and this is one more
reason I am going to need to see some more bullish evidence before I
get long again.
November 21, 2009
The SPY managed to close over 111 three days this week, but was not overly convincing.
I would like to see the weakness seen on Thursday and Friday carry over into next week.
The market managed to work its way a little higher before correcting to end the week. Other than a few higher closes nothing on the charts stands out. It has been difficult to watch the market move higher after being stopped out a few weeks back. This has been especially difficult when I see signs around me indicating the economy seems to be making another downturn. Unemployment in my county is over 14% and another wave of layoffs seems to be surfacing. Add to that California’s apparently unfixable budget deficits that remind me of the Titanic. I don’t think this situation will end well, layoffs and or higher taxes are imminent, and neither is good for the economy.
I do realize that the economy does not equal the stock market. How long can the two move in different directions? As difficult as it is I have to let the markets signal when it is time to get out. That time has not come yet. Therefore we will look to get back in when the markets allow us to get in, under hopefully more favorable conditions.
November 28, 2009
The SPY managed to close over 111 only one day this week. The highs for the week are even farther from the upper Bollinger Band. Continued weakness will put the market back in the decision zone. The area that will either offer a low risk opportunity to buy or signal that there is more weakness to come.
The market tested last week’s highs and was unable to do much. Then came the news late in the week that Dubai World may default on $20 billion in loans. This brought up concerns of other plausible defaults. I am not sure where all this will lead. This could be the beginning of another wave of bad news that takes the markets down. How the market reacts when it reaches support will be the first indication of what may be coming. That may happen as early as this week or it could take a month to develop. I will be watching the markets and letting you know if action needs to be taken.