#BellwetherStocks – longer fangs for the new year?

Let’s put it this way:

NVDA UP 14%
NFLX UP 13%
AMZN UP 11.3%
TSLA UP 7.7%
BIDU UP 7.0%
GOOGL UP 6.8%
BABA UP 6.5%
TWTR UP 5.5%
AAPL UP 4.0%
FB UP .9%

The above are year-to-date returns – nine trading days – which is why they are the “bellwether stocks” for this melt-up bull market. They also happen to be the stocks in the NYFANG Index, up 8.4% year to date.

Also I would add FSLR, up 8.2%, as a bellwether for the future of energy.

(click on the chart panel for a larger view)

#DayTrading $AAPL calls…

CONTEXT FOR THE TRADE

From the link below:

And, of course, if the market rallies it is also likely AAPL will again participate (always good for a bounce, a scalp, or an option-play).

The weekly, expiring Friday, in-the-money 170 calls for a day trade. Currently up 70%, from 2.00 to 3.26. $3100 on a $5K position, 25 contracts.

Will update later:

END OF THE DAY UPDATE – up 62%

#MarketTiming – Swing signals positive for stock buys

All of the swing signals – based on Price, Breadth and Volatility – are on buys and even the all important long-term breadth is threatening to go positive.

It would appear we are entering a seasonally positive time.

On a stock trading note: four of the 10 stocks in my bellwether stock list have a good chance, if the market rallies as is likely Tuesday, of following the market:
NFLX
NVDA
BID
FSLR

See the positive candles today on each of those stocks on the chart panel below. Like the stock market itself, expect stocks that are up to follow-through and go up until they don’t. And, of course, if the market rallies it is also likely AAPL will again participate (always good for a bounce, a scalp, or an option-play).

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Sell (Day 20).

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 3).
VOLATILITY: Buy, (Day 3).

CONTEXT:

SPY CLOSE – 258.30
QQQ CLOSE – 153.87
CNN MONEY’S FEAR AND GREED INDEX: (50, rising, neutral level).
NIFTY-50 STOCK LIST: 35 Buys; 16 Overbought, 6 Oversold, 1 new buys today, 6 new sells.

(click on the chart for a larger view)

#MarketTiming – as suggested yesterday, today the bounce…

Wrote yesterday for a lot reasons the market was likely to bounce today and so it did.

Those reasons remain in place. All three of my swing signals are on buys as well as the ever important long-term breadth. Fourteen of the nifty-50 stock list gave buys today, and AAPL moved up as suggested yesterday. All in all, a good day across the board.

I going to note that my bellwether stock are still oversold or still close to oversold, with many buys today (see the green bars coming out of the oversold cyan color coding on the charts below). If they get moving tomorrow, the market, obviously, is going vault much higher.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 2).
SHORT-TERM BREADTH: Buy. (Day 4).
VOLATILITY: Buy, (Day 2).

CONTEXT:

SPY CLOSE – 250.05.
QQQ CLOSE – 144.46.
LONG-TERM BREADTH: Buy (Day 33).
CNN MONEY’S FEAR AND GREED INDEX: (78 rising, extreme greed level).
NIFTY-50 STOCK LIST: 26 Buys; 83 Overbought, 12 Oversold, 14 new buys today, 2 new sells.

(click on the chart for a larger view)

#MarketTiming – Time for a bounce?

Last time posted here I said “sideways to down.” Got the sideways (SPY) and got the down (QQQ) on the two main index ETFs I follow.

In the process both SPY and QQQ managed to get over sold (see the cyan color coding on the charts below). SPY came off oversold today despite no more than an small uptick and QQQ also ticked up while remaining oversold. In the nifty-50 stock list only 16 stocks are on buys and 22 are oversold. The question, as always, is once anything is in oversold territory how long can it stay there? In this bull market that has not been long.

So what now?

Given that all three of my swing signals – based on price, breadth and volatility – registered buys today for tomorrow’s open, and long-term breadth remains on a buy and continues to rise, I am suggesting a bounce Wednesday. How high, how long, and whether or not it can hold at all is anyone’s guess. I will buy with a tight stop. For the sake of the stop loss, I pretty much want this to go my way right away so I will be watching on a five-minute bar chart to make the trade stays above its open from the open of the market.

Although none actually met my intraday criteria today for a buy on the open tomorrow, if I had to pick one stock to buy from the ten in my bellwether stock list it would be AAPL, which slid to oversold and stayed there for four days before its bounce today. I would bet it will follow through on today’s bounce tomorrow. Not a bad stock to gamble on in this context for a day trade, and maybe a swing trade if the market bounces with it.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 3).
VOLATILITY: Buy, (Day 1).

CONTEXT:

SPY CLOSE – 249.07.
QQQ CLOSE – 143.17
LONG-TERM BREADTH: Buy (Day 22).
CNN MONEY’S FEAR AND GREED INDEX: (67 rising, greed level).
NIFTY-50 STOCK LIST: 16 Buys; 3 Overbought, 22 Oversold, 7 new buys today, 5 new sells.

(click on the chart for a larger view)

$SPY – after the pause, the bull moves on?

On my last post here last week, it was noted that the market was giving “glimmers” of a pause in its advance.   After two days down for SPY and one for TQQQ, it appears the pause late last week is over and it is likely the current bull rally will continue this week.

AAPL, after its own three-day pullback, bounced Friday to turn the Nasdaq again to the upside.

My three swing signals based on Price, Breadth and Volatility have again gotten in sync with individual buy signals on each, and most telling signal of all, long-term breadth, has not wavered on its advance.

CNN Money’s Fear and Greed index has enter and an “extreme greed” level so the market is extremely overbought but as yet there is no sign of a turnaround.  Quite the opposite for Monday.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Buy, (Day 5).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 15).
CNN MONEY’S FEAR AND GREED INDEX: (77 rising, extreme greed level).
NIFTY-50 STOCK LIST: 19 Buys; 7 Overbought, 6 Oversold, 5 new buys today, 3 new sells.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Thursday:  BABA, AMZN, NVDA, GS, TSLA; four stopped for losses, GS a winner, for a net of minus .12%.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Friday:  GS, TSLA, BID, FSLR; two stopped for little losses; TSLA and FSLR, winners, for a net of plus .45%.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Monday: TSLA, NVDA, FB.

 

 

$SPY – giving glimmers of a pause…

This is just a guess but it will not surprise me if the stock market rally takes a pause Thursday.

Overall, the  bias remains bullish with long-term breadth continuing to rise, and my buy signals based on price and volatility sill in place.

So why a  pause?  Why now?  Maybe?

The ETF for the S&P 500 — SPY — is not only up three days in a row, it has now been overbought for all three of those days.  The last time it was overbought for three days was September 1st going into the holiday weekend.  On the Tuesday following the holiday, the market took its deepest setback in this latest advance from late August.  And while this bull market has been relentless even in the face of any indication it might turn down, short term breadth turned down today at an overbought level itself (see the red box in the upper right of the chart below).  Many times when that happens as prices are shooting upward, it is the glimmer that there is weakness under the mask of the price advance, and many times it the prelude to a quick dip (look back over the chart for similar instances). Also, the stocks on my nifty-50 stock list have been slowly rolling over for the past two days, from 34 on buys to 27 today, another glimmer.

However, those glimmers may mean nothing at all and even if they do bring on a pause, or a sideways slide for a couple of days, it is no big deal.  It’s going to take more than this to slow down long-term breadth (the straight up line with the black dots in the middle of the chart below).  There are just too many positives so the market still has higher highs ahead.

Should be noted that AAPL filled an intraday gap from three days ago today down at about 158 and the stock finished near its high for the day.  If it bounces based on that, as big as it is, then there won’t even be a pause in the rally tomorrow.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 3).
SHORT-TERM BREADTH: Buy. (Day 3).
VOLATILITY: Buy, (Day 3).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 13).
CNN MONEY’S FEAR AND GREED INDEX: (67 rising, greed level).
NIFTY-50 STOCK LIST: 27 Buys; 17 Overbought, 6 Oversold, 5 new buys today, 9 new sells.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Thursday:  BABA, AMZN, NVDA, GS, TSLA.

(click on the chart for a larger view)

$AAPL – the stock that is the market…

The story of an otherwise lackluster consolidation day was AAPL’s event to announce its new iPhone, TV stuff and the latest edition of its watch.

Almost any day in the market is an AAPL day since the the stock is so big (an unprecedented $830 billion market cap) that is shakes and rattles every index it is in.

So today started out with the stock gaping up and immediately selling down, taking the Nasdaq with it.  It then chop-choped back up to its high of the day as its event opened.  There is a common saying the stock market that goes “buy the rumor, sell the news.”  Well, the traders indeed sold the news, taking the stock down two points into the close.

See the charts below.

For day traders that was just fine.  AAPL’s news was worth 40% in its in-the-money puts from the open of its “event” to the close of the market, 80% at the greatest measure of its tank from its high on the news. If one shorted its “news” in the stock itself, it would have been worth two points to the close. Five-hundred shares and one could actually afford their over-priced phone. A thousand shares one could buy two and give the second one to your kid.

To your kid! A thousand-dollar phone! You must be kidding!

And P.S.: that was supposedly good news.

So what now?

AAPL had an “outside day” which is a continuation pattern in technical analysis and since the stock came into the day on an upswing it is likely to recover today’s small drop and continue higher.  Especially since it has enough cash on hand and the prospect of a lot more to buy its own stock.

As for the general market all three of my swing signals remain on buys, and long-term breadth is accelerating somewhat to the upside so there is more rally to come.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 2).
SHORT-TERM BREADTH: Buy. (Day 2).
VOLATILITY: Buy, (Day 2).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 12).
CNN MONEY’S FEAR AND GREED INDEX: (64 rising, entering greed level).
NIFTY-50 STOCK LIST: 31 Buys; 19 Overbought, 3 Oversold, 6 new buys today, 9 new sells.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open:  NFLX, FSLR, BABA, BID.

(click on the chart or a larger view)

#DayTrading 5 minutes of risk on the open…

Today was a great example of the overwhelming importance of the open in day trading.

The market gapped down on the after-the-close news Monday that North Korea fired a missile over Japan.  And once again, as has so often happened in this bull market, the dip was met with buyers and the market started up almost immediately to close the day near its highs again. It hasn’t really gone anywhere in the last week or so but it’s moved up and down a lot, a perfect intraday environment for day traders.

At the end of the day Monday, two of my daily signal were on sells — short-term breadth and volatility — but the price signal was giving a buy for today’s open and long-term breadth, the most important indicator for the overall mass psychology of the market, was also positive.  Long-term breadth also — not always, but usually — makes overnight news irrelevant.  Going into the day, it wasn’t as if one could expect a home run but a single or a double might be possible.

So let’s go back to the open.

This day, as it turned out, was also great because it provided four of my bellwether stocks on individual buys for the open coming into the day — AAPL, FB, NFLX and NVDA.  The criteria for those buy signals was that each stock ended Monday above its Monday open and above a short 3-5 bar average on a 5-minute chart.  That simple.  Now this is when day-trader must have faith and believe to put in market orders to buy at the open no matter what is happening in the overnight.

How did that turn out?  Great day.

See the chart panel below.  Not one of those four stocks threatened a loss from the open to the close with AAPL up 1.68% on the trade (on the charts, the number in the white rectangle on lower right is the return per $100K), FB was up 1.39%, NFLX was up 1.92% and NVDA was up 1.26%.

When I say “threatened a loss” I mean not one of those four stocks went back through its open at any time during the day.  A close below the open is the stop loss.  The trade is initially at risk for a stop loss five minutes into the day.  That’s all.  After that the trade, if not stopped, is in profits, and can then be managed on an whole set of additional criteria – break-evens stops, trailing points or percentages stops, technical indicators like the short term average, whatever…or just letting it play out to the end of the day (like today).

It needs to be noted getting stopped after five minutes happens. Quite a lot in some markets.  There are only four things that can happen on any trade – a little loser, a little winner, a big loser, a big winner.  Can’t do anything about the little losers and little winners but one must be able to eliminate the big losers in order to get the big winners.  These first five minutes generally do that.

FYI, four more of the bellwether stocks meet the criteria for at-the-market buys on tomorrow’s open — FSLR, GS, TSLA, NVDA.

REMINDER: This information is for entertainment purposes only and should not be construed as investment or trading advice.

As for the today’s end-of-day:

SWING TRADING SIGNALS:

PRICE: Buy. (Day 2).
SHORT-TERM BREADTH: Sell. (Day 2).
VOLATILITY: Sell, (Day 2).

CONTEXT:

LONG-TERM BREADTH: Buy, (Day 3).
CNN MONEY’S FEAR AND GREED INDEX: (29 rising, at fear level).
NIFTY-50 STOCK LIST: 22 Buys; 6 Overbought, 8 Oversold, 6 new buys today, 5 new sells.

(click on the chart for a larger view)

 

 

 

 

$AAPL trying for a new high, holds up the market

Talk about a mixed market.  Should say a mixed day.  The general indexes were up on the day and down from the open.

So I guess the story is AAPL.  How many times has that been the case in this bull market?  Every day?  AAPL closed at 161.47 just a point off its all-time high of 162.51.  The high today was 162 even. It is overbought.  See the daily chart below.

The question arises “Can AAPL hold up the market all by itself?”  Probably, at least for a while. But if it comes apart, the market is likely to flush like crazy. It has an $834-million market-cap which is a number that absolutely defies history so when it falls it could (and likely will) fall very hard.

In the general market, I had end-of-the-day sells on my Breadth signal (as was expected after six days up) and the Volatility signal.  The turn-down in breadth was not enough to damage the longer-term breadth.  The price signal remains on a buy.  Like I said, a mixed day.  The market could go either way tomorrow.

I don’t have much more to say.

Hmm…that reminds me, the great trader Linda Bradford Raschke once said (if I may paraphrase) she loved it when nothing much happened in the market because the next big thing usually is a REALLY BIG THING.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 2).
SHORT-TERM BREADTH: Sell. (Day 1).
VOLATILITY: Sell, (Day 1).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 2).
CNN MONEY’S FEAR AND GREED INDEX: (29 rising, fear).
NIFTY-50 STOCK LIST: 21 Buys; 6 Overbought, 8 Oversold, 1 new buys today, 1 new sells.

(click on the charter for a larger view)