$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.

 

 

$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)

$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)

 

 

 

$TSLA – Is it the best long-term investment since $AAPL?

I am not much for Peter Lynch type anecdotal evidence as a basis for either fundamental analysis or technical analysis in the stock selection but one of my sons, who is 28 years old, recently gave me a lecture on the future of Tesla (TSLA) that actually made sense.

He believes TSLA will one day be the biggest market-cap stock in the market because it is the Apple (AAPL) of the car market.  His reasoning, at the risk of oversimplification, is that Apple’s iPhone took the world by storm for one reason beyond its intrinsic quality and usefulness – it dominates because it happened to be introduced to the market at the exact moment that his millennial generation was able to afford to buy the iPhone.  Now the TSLA is introducing its Model  3 at a price and a moment when the same millennial generation is reaching the point in their lives when they can want and afford one.

Simply put, he tells me, everyone he knows is on the Tesla waiting list for the Model 3.

According to reports, reservations for the car are now averaging 1800 per day and have far surpassed the 500,000 mark – http://money.cnn.com/2017/08/02/technology/business/tesla-earnings/index.html.

And if the reviews are any indications, that number is only going to increase as Tesla gets closer to delivering the vehicle – https://www.cnet.com/roadshow/auto/2018-tesla-model-3-review/.

And, more simply put from a long-term investment point of view, he points to AAPL”s current market cap north of $800 million and TSLA’s current market cap at $57 million and says “do the math.” TSLA has room to move up 14 times its price today.  Can this be true?  Well, when AAPL introduced iPhone in 2007 its stock was selling at a split-adjusted $11 per share.  It is now sells at close to $162 a share – 14 times its price at the iPhone’s introduction ten years ago (how about that?!).

So, as they say on Wall Street, what’s a price target on the upside for TSLA – $800 or so a share…

(click on the charts for a larger view)

 

 

 

 

 

 

$TSLA and market timing…(updated)

Not confirmed yet but if the market stays down it appears after 45 days of rally, the market may begin to take a tumble today.  And if today’s downside trigger follows through, there could be a full-blown correction in the making.

A couple of ifs in there but if they hold, it will be time to look around for stocks to sell if one currently holds them, or to short if one is an aggressive trader.

Case in point – TSLA.

TSLA, like to most stocks, tends to run with the market’s general direction, both up and down.

On the up, Tesla has had a great in run during this rally, roughly from 191 to (at the moment) 227, or 18.5% or so.  A profit well worth locking in since the stock can be volatile.

Now for the down.  Looking at the chart below, it appears the market may be turning negative (the green and red dots the middle of the chart) and so is Tesla’s stock.  When the market and the stock are in sync like this one needs to go with the market until the stock says otherwise.

In short, TSLA is a short.  That is if all the ifs above remain true at the end of this day.

UPDATE:

Market breadth did not stay negative on yesterday’s close (note the green dot instead of red on the indicator in the middle of the second chart below) so the short signal anticipated here never triggered and instead TSLA, on news (its charging station pricing) and modestly bullish day in the Nasdaq to back it up, had a nice rise today, 3.3% from today’s open. So it goes sometimes.

(right click on the chart for a larger view)

tsla2017-01-12_0729

(right click on UPDATED chart for a larger view)

tsla2017-01-12_0729

 

$AAPL analysts – the wrong advice and still getting paid for it

This, again, is what I love about Wall-Street Stock analysts.  They are so often more wrong than right that one wonders why they are getting paid anything to do what they do.

Take Apple Computer (AAPL) as the latest example.  Note the chart below from Finviz documenting recommendations for the last quarter – all except one being on the buy side with price targets ranging from a new high ground around 130 to as high as 179.  And only one downgrade in the bunch.  One.

AAPL closed today at 97.  All these analysts’ “Buys”, “Overweights” and “Reiterateds” came before now, higher up.

I suppose these guys have all sorts of fundamental reasons why AAPL should go up.  The company has tons of cash, many fine products, avoids  a lot of taxes, had a reputation for industry-disruptive innovations.

But the thing about fundamentals is, in the end, none of them matter if the price of the stock no longer agrees with them.

When everyone who loves AAPL, and buys its story, already owns it, one wonders if the analysts ever wonder who are they going to be able to sell it to;  when a company achieves a market cap north of $500 billion (let alone the $700 billion Apple bought for itself), one wonders is any of these analysts might wonder if history repeats – with the exception of Exxon-Mobil – every company reaching that lofty number has eventually had its stock cut in half.

A lot of these mistakes could be cured, or at least alleviated, by adding market timing to their analysis but I’d bet they would join the rest of the Wall-Street chorus harping that no one can time the market. No one. Fact is, it is they who can’t time the market.  One glance at a stock chart would not have hinted the stock was going down, it would have flat out said it was going down.

But since they keep getting paid despite being consistently wrong for whatever reasons, why should it matter to them?

Well…hard to believe, but maybe one day these guys’ clients might take note.

By the way none of this should be construed as investment advice.  As a solitary trader when I’m right only the market pays me, and when I’m wrong it takes it back.

P.S. AAPL is going to be a buy soon…for a bounce to $106 or so, maybe $111, but longer-term…mentioned above something about being cut in half so enough said.

(right click the image for a larger view)

AAPL_ANALYSSIS2016-01-08_1148

$AAPL could take a tumble right about now…

11/04/2015

Having underestimated Apple’s ability to buy its own stock ($100 billion worth so far since everyone else already owns it), AAPL has rallied higher than I expected after its plunge finally signaled the Aug/Sept down swings (they shoot leaders last) but it is now back up at resistance (sizable) and could sell off again, taking the market with it.

Sometimes it seems there is only one stock in the market.

Anyway, it’s been a nice 20 percent climb (that’s a lot of market cap), and could keep going (they have the cash), but might not, right about here.

(click on chart for a larger image)

aapl_short_term_2015-11-04_1629

A longer view:

(click on chart for a larger image)

aaple_longerterm2015-11-04_1630