A DECEMBER RALLY WORTH HATING PART ONE
The market was up to its current tricks again Tuesday. Came into the day with a signals blaring buys and the market sold off.
As noted in the link above this has been going on pretty much all month. One day a buy, the next day a sell…hasn’t mattered much except as a fade. But one can’t fade signals developed over years of experience in the market or the signals won’t matter anymore, nor will the years of experience. Finally, when a11 is in doubt, there is a moment of obvious follow through that may indicate all is back on track.
That may be today.
Yesterday, all my swing signals turned again to sells (see table below). Long-term breadth was still moving up for the third day in a row, but limping. Still, if all was right in stock-market world, today should go down on the short-term signals, even gap down. Instead, tricky as its been, it gaped up…
Then sold down fast. …Hmm, that may be the indication all is back on track. If so, it could be the passage of the Republican tax plan, as many have suspected, might be the hammer that breaks the bulls back – a classic sell-the-news event.
Hard to know that for sure, but the market has been too tricky lately — too tricky — and that too may mean something. Trader Vic Sperandeo once said if the market doesn’t do what it’s expected to do, it will do the opposite twice as much. Of late, there has been an awful lot of bullish belief out there. Sentiment turns slowly and often too late, often not until it’s obvious the market is not doing what it is supposed to do.
Is this the day? As with everything in the market, we will, as the great Ed Hart of the old Financial News Network used say, “know in the fullness of time.”
P.S. Didn’t get a chance to post this Tuesday because of other pressing matters, and wouldn’t you know it on a day like today I overslept (I live on the West Coast).
SWING TRADING SIGNALS:
LONG-TERM BREADTH: Buy (Day 3).
PRICE: Sell. (Day 1).
SHORT-TERM BREADTH: Sell. (Day 1).
VOLATILITY: Sell, (Day 1).
SPY CLOSE – 267.17
QQQ CLOSE – 157.7
CNN MONEY’S FEAR AND GREED INDEX: (73, falling, greed level).
NIFTY-50 STOCK LIST: 35 Buys; 22 Overbought, 3 Oversold, 1 new buys today, 6 new sells.