#MarketTiming – a surge that falters…

A couple of weeks ago as long-term breadth turned up in the midst of an on-going bull market suggested that the bellwether stocks that have so long mattered would move up again.

That didn’t happen.

My “bellwethers” are TSLA, NFLX, AMZN, GOOGL, TWTR, BIDU, AAPL, FB, NVDA, BABA.

Long-term breadth turned down the next day and scattered the bellwether cluster — some up, some down, some going huh, what’s happening. Four days later they again tried to rally (see the chart panel below) but Friday they were hit harder than ever. With exception now of AMZN, they are all falling apart, led by the 20% disaster in FB and now the equivalent in TWTR. This usually does not happen in bull markets.

Chart by chart they look vulnerable to more decline. If they follow through to the down side this coming week, one will have to question if this is still a bull market or is the bear market beginning to emerge.

(click on the charts for a larger view)

#CoalStocks – thinking about shorting BTU, CLD…again.

Just thinking about it. This is a heads up. Don’t quite have the triggers I’d be comfortable with yet.

But unless the stocks surprise further to the upside, the prospects for shorting them again are getting closer day by day.

These stocks have been rallying in recent months on the desperate hope President Trump will do something to revive the industry. There is no chance of that happening. He is paying lip service, but is hardly interested or able to do anything else. Remember these stocks, long term, have fallen faster than dead canaries. This is an industry slammed by cheaper cleaner natural gas and it is facing an inevitable death at the hands of renewable energy.

CLD, once the stock dropped below $5 a share, could easily fade to dead money around $1, and maybe even go off the board like so many others in this sector – Patriot Coal, Walter Energy… BTU has already been through a bankruptcy, taking out decades of shareholder equity, and now has restructured and emerged to try to do it again.

I’m not one for fundamentals but this industry blow happened just yesterday:

LAST COAL PORT PROPOSAL ON THE WEST COAST DIES

Businessmen, especially coal executives, always complain that environmentalists never let them do anything. That is not true. Environmentalists don’t let them do stupid things. All of coal, once an evil necessity, is now a stupid thing.

So, trading-wise, I’m looking for more signs of weakness, negative candles, breaking supports, indicator divergences before sealing the shafts (see the charts below). Call it waiting for the bloom to come off the black Trump rose.

(click on each chart for a larger view)

All information, presentations and discussions on this site are no more than a journal of my personal stock market thinking and trading. This site is for entertainment purposes alone, and nothing here is to be construed in any way as direct investment advice.

#MarketTiming – From fear to new highs…

After basically a week’s consolidation, the rally from fear to greed resumed Monday.

CNN Money’s Fear and Greed Index moved out of the fear zone and into neutral.  First posted here with this below:

http://www.thegodoftrading.com/uncategorized/spy-now-upward-bias-fear-greed/

And previously posted here:

http://www.thegodoftrading.com/market-timing-2/markettiming-moving-up-from-fear/

The buy signal on individual EFTs after that first post started with SPY at 243.06 (closed Monday at 249.21), QQQ at 141.18 (closed Monday at 145.87; the leveraged ETFs, TQQQ moved from 104.41 tgo 114.70 and XIV moved from 76.37 to 84.31.  That’s nine trading days including a week’s price consolidation.

That is the quality of market timing as measured by this CNN Money multiple-component index.

So what now?

Fear and Greed at neutral and the indexes already knocking the highs.  There is a good chance the market goes higher, dragging sentiment, as measured by this index, back into the greed zone (see the red line on the chart below) as the indexes register more new highs and stocks generally stay strong.

All three of the daily signals – price, breadth, volatility – are back on buys as long-term breadth entered its third positive week.

SWING TRADING SIGNALS:

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

CONTEXT:

LONG-TERM BREADTH: Buy(Day 11).
CNN MONEY’S FEAR AND GREED INDEX: (58 rising, neutral).
NIFTY-50 STOCK LIST: 34 Buys; 23 Overbought, 3 Oversold, 18 new buys today, 1 new sells.

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

(click on the chart for a larger view)

$KBE – Are these banks or the walking dead?

Long-term market breadth has been rising for nine days.  That usually takes most stocks in the same direction.  After all, if a stock isn’t rallying when it has the entire market on its side, when is it going to rally?

So, consider the banking sector…

JPM, BAC, GS, WFC, DB, KBE (the ETF for the sector) are all falling while breadth is positive (see the rising green in the middle of each chart below), and now all of these stocks have broken support falling out of their respective consolidations (see the blue boxes on the charts below).

Don’t those boxes look a lot like coffins?  So is this out of the coffin and into the grave like “out of the frying pan and into the fire”?

Enough fiddling around.

If you’re a bull this is not a sector you want to see lagging, let along falling apart.  So here’s the heads-up, they’re likely going down.

(click on the chart for a larger view)

 

 

$USD – a vote on the country ever day…

Given that currency trading is a vote by the whole world on your country every day and now that President Blowhard believes the dollar’s recent rise was because of “confidence” in him instead of an overflow from the Obama Administration, the US dollar is likely to decline now.

Trump commented that yesterday that the dollar was too strong because of “confidence in me”, but the currency has been going sideways to down since his inauguration.  Confidence in him?  More likely a rising lack of confidence.

And of course, the US dollar always does decline in Republican Administrations.

That was never more pronounced in historical terms than the day George W. Bush made his “Axis of Evil” speech.  That moment was the precise top for the dollar in his term.  It was as the entire world heard that and thought that guy is crazy and ran for cover.  It declined 40 percent and has not completely recovered.  No analysts ever seem to want to talk about it, preferring to say a weaker dollar makes American multi-national companies more competitive, but think what a drop of 40 percent in net worth means to the biggest economy in the world.

Subsequently, from the day Obama locked up the Democratic Party’s nomination in 2008 the dollar bottomed.  It was as if dollar bulls knew he would be President and were, after the raging uncertainties of the Bush Administration, damn happy he would be.  There were some wild swings in the currency as Obama battled Congressional Republican obstruction (shutting down the government…) but once he was reelected, it was clear sailing to the upside until now.

So what now?

The new era of raging uncertainties is just beginning so, despite professed Fed Reserve tightening, it is probably best to be defensive, if not downright bearish, on the US dollar.

(right click on the chart for a larger view)

USD2017-04-12_1312

#MarketTiming – once again the bull runs…

TREND TRADE: Up from open, 1/25, possibly whipsawing.

SWING TRADE: Up from open, 1/20.

DAY/SCALP TRADE: Buying the dips with the trend trade

PRICE TREND: Nasdaq up 1 day, whipsawing.

SETUP:

After giving all the signs of an impending sell down, the market took off again to the upside.  This has happened a lot during the later stage of this bull market.

Each time breadth has turned up (which it did again yesterday), the market has had a run so at this point the past of least resistance is again up.  See how XIV, the leveraged inverse VIX ETF, has performed with the market behind it on the chart below (the green vertical lines marking each new surge like yesterday).

But the signs for a sell down remain, at least for now, so trading here is tricky and a buy and hold strategy downright scary.  Appears the market chop has an upward bias but that is the way it was Tuesday.  Today late may be another matter.

Stocks on my nifty-fifty stock list went from 19 on buy signals to 38 in a day.  Stocks coming off recent sell downs that might produce at least a swing bounce or scalp trade include the banks JPM, C, GS, BAC and a big cap on the list, DIS.

Should be noted I guess that airlines, ALK and HA, on the list remain oversold and could play catch up in the next couple of days if the market continues yesterday’s bounce.

(right click on the chart for a larger view)

trendswing_2016-12-12_0818

$USD – the dollar historically speaking…

Historically speaking, the US dollar goes to hell under Republican administrations.  Does anyone actually expect it to be any different this time?

May take a while since Janet Yellen’s term has year or so to go and apparently the Federal Reserve is now determined to hike interest rates. But eventually, the businessmen now running government (who of course are totally unaware that the government is not a business) will want to debase the currency.

There is the belief that a weaker dollar enables American companies to more easily compete against competitors around the world.  Maybe so. But every time I look up while the dollar is down, it is the competitors buying US companies instead of buying their products.

Oh, well, this Bud’s for you.

(right click on the chart for a larger view)

us_dollar_2017-01-16_1053

#DayTrading stocks – 82% winners this week so far…

Market breadth turned up on Friday (11/2) giving a buy signal on the major indexes and since the vast majority of stocks move with the market direction, Friday’s buy signal cleared the way for stocks to move higher.

Conveniently for the start of the week, the time to initiate buys was the open of Monday. If we look back there were four stocks in my nifty-fifty stock list that gave individual buys for Monday’s open — SCHN, CECO, TBPH and RIO.

The idea was to buy on the open and sell on the close, a pure day trade on each stock. The value of this kind of trading allows the trader to leverage with margin and retain buying power leverage for each day.

Monday SCHN, from open to close, netted 1.8%, CECO lost 1.2%, TBPH gained 1.7%, and RIO gained .4% for a net of .47%, exclusive of slippage and commission for the basket. While that was not a great gain (leveraged it would have been at least twice as much), it was a profit, and it should be noted that was the first day of the turn to the upside for the market.

And as Monday’s market rally got moving, it generated 13 individual stock buy signals in the nifty-fifty stock list. Again it was buy on Tuesday’s open (today’s open) and sell on today’s close.

The results for today’s 13 day trades in stocks — FCX up 1.1%, ACM up 2.8%, NVDA up 1.2%, BBL up 1.5%, TPC up 3.9%, DGI down 1%, NAV up .8%, BHP up 2.2%, IRBT up 1%, FPRX down .01%, ADSK up 7% (highlighted on the chart below), ACAS up .4%, and TWI up .2%.  An un-leveraged net across the basket of 1.6%.

Stocks from my list giving buy signals for tomorrow’s open  are HIIQ, MSCC, GPS, IGT, UAL, and BRKS.  So we’ll see how those go. (These are presented here for entertainment only and are not be construed as market advice.)

(right click on the chart for a larger view)

adsk_2016-12-06_1419

The #StockMarket – it rhymes…

It is said history may not repeat so much as it rhymes.

Repeats, rhymes, whatever.  This time looks more like a repeat.

The chart below featuring the Nasdaq Comp (the heavy green line with the diamond) shows the market action pre-election and the reaction since in comparison to the Brexit sell-off in June (the plunge on the left). Note the one-day dips (most recently last Thursday) before the next big run in both instances (the darker green circles), which is to say the market is above to keep going higher, maybe all the way to Christmas.

Yeah, at least a rhyme.

(right click on chart for a larger view)

it_rhymes

 

#Great8Stocks- Top stocks in a Nifty50StockList

These eight stocks rose to the top of my nifty-50 stock list as the market began the current rally.

Into to the recent low the SPX declined 9 days in a row which is called stretching the rubber band too far.  No wonder there was such big blast to the upside yesterday.

With the market down 8 days in a row, breadth turned up on 11/3 giving a buy signal for the open of 11/4 (as has been said before “buy when the market tells you, sell when the stock tells you”).  From the open of 11/4 to today’s close (11/8): CLCD is up 1%; CWEI, UP 15.4%, FNSR, UP 3.4%; NFLX, UP 1.8%, NTES UP 3.5%, TBPH UP 6.4%, TWI UP 14.1%, and XRS UP 5%. Deeply oversold leads to wildly overbought in a hurry sometimes.

I think the market will have one more downside swing (for whatever reason — Trump, initial profit taking, too much up too soon) but if that swing does not rip out the recent low, we will likely be in the Santa Claus rally.

The stocks below are in my personal trading journal (not a recommendation for anyone else), with appropriate stops of course.

(right click to see a larger image)

great8