#BellwetherStocks – markups in current upswing

Since the current market rally began on the open of February 12th by my market-timing measure, my list of bellwether stocks are all in the black.

Once again, an example of the value of market timing – when the market moves almost all stocks move with it. And if a stock doesn’t, beware the next down swing.

NFLX leads the rally up 30% so far, FB lags up only 4%.

For the rest of the list, see the chart panel below.

(click on the charts for a larger view)

#SwingTrading – the top stocks on the nifty-50 list

Just revised and sorted the stocks on my nifty-50-stock list – a powerful group they are!

I’m just going to feature the top 12 here because they are just too many moving too much. On the charts below the keys are the white flags on the lower right and lower left of each chart. On the lower right are the closed gains based on the 10 swing trades so far year-to-date and on the lower left are current open trade results using the short-term breadth signal as the trigger for the buys and sells.

Each trade is a $100K stock buy (so the cash in the flag is also the percentage return). For instance, QNST on the upper left of the chart panel is up 55.6% on trades marked up this year and the current open trade is up another 5.4%. VCEL, just below QNST on the chart panel, is up 66.5% on closed trades and down 2.1% on the open trade. And so on, and so on across the charts…

The stock trading here is entirely a market-timed swing system based on the basic idea that most stocks move with the movements of the general market. It is purely technical and what each company does is largely irrelevant. The measure of each stock is how well it tracks and how big it moves in accordance with each market swing.

Needless to say these and many more stocks are doing very well as the bull market so far continues.

(click on the charts for a larger view)

#MarketTiming – What a “long” glorious week!

This is an update of this post in this link, made last weekend:

#MarketTiming – Time for a bounce…

Wow! The predicted “bounce” has turned out to have been an understatement to what happened in the market this week.

Remember the 1961 movie “The Absent-Minded Professor” with Fred MacMurray, which introduced the world to flubber? Well, this week was a FLUBBER OF A BOUNCE, and since today it turned long-term breadth positive it is a bounce that has likely turned into a rally.

If I had to guess, instead of just following along, I suspect the pause begins tomorrow. If it gaps up, the rest of the day will likely be flat as the monthly options expiration plays out. If it gaps down or opens flat, there’s a good chance it rises again to the close and starts the pause there.

Just guessing this stuff…

Regardless, it has been a truly glorious week for swing traders – among the leveraged index ETFs TQQQ is up 15.8%, TNA up 12.1%, UPRO up 10.7%, even SVXY in the blistered VIX complex is up 15.3%. The at-the-money monthly SPY 263 call from Monday’s open, expiring tomorrow, is up 179%. Among the bellwether stocks AAPL is up 9.2% (that is a heavy market-cap lift in an awfully short time), BIDU up 13%, NFLX up 11.2%. I’m going to update my bellwether stocks later but suffice it to say here all twelve as of the close today are in the black for the week.

Now for a few cautionary notes.

If there is any trouble with this, it is that it has been a straight up move since last Friday. All the major indexes and most of the sector ETFs are up five days in a row. Much of the market is wildly overbought on short-term basis. This up move has been crazy. It is easily three standard deviations of an average advance and done in five consecutive days! (See the histogram on the Nasdaq Composite chart below.) I can’t even remember the last time anything like that happened, and obviously not in the last six months of this huge bull market. Forty-seven of the stocks on my nifty-50 stock list are on buys with 31 overbought (see the swing trading signals below), and yet we are not at new highs. This is going to have to have a pause, some backing and filling, then a resumption of the upswing before one can be sure it is yet another bullish rally in the on-going bull market.

The trouble with rallies out of hard drops, like the one the market took before this bounce, is that by the time they are obvious, they are sometimes over.

In addition, if the fierce sell-off that has preceded this bounce was a shot across the bow of the bull market, it is possible the buying this week is the last leap into the market by those long-ago left behind — if so, and if this rally fizzles before new highs (or even at marginal new highs) then this could be an advance before a mighty, mighty big flop.

Whenever this ends, we are going to have one of the biggest bear markets in history. If you don’t think so, you must not know history or you think “it’s different this time.” History says it is never different this time.

Even flubber bounces had to come back to earth.



PRICE: Buy. (Day 5).
VOLATILITY: Buy, (Day 5).


SPY CLOSE – 273.03
QQQ CLOSE – 165.70
CNN MONEY’S FEAR AND GREED INDEX: 11, falling, extreme fear level).
NIFTY-50 STOCK LIST: 47 Buys; 31 Overbought, 0 Oversold, 1 new buys today, 1 new sells.

(click on the chart for a larger view)

#IPOs – $FIT shows the first day’s range is sacrosanct

As has been stated in a previous post here, buying into an IPO is actually one of the easiest decisions in stock investing but never let a broker con you into doing it the day of the offering.

Instead, note the high price and the low price on the first IPO is traded. Those are the lines in the sand or the Darvas box around the first day of trading (see the charts below). The time to buy, invest, is on a close above the high of the first day with a stop loss below the high of the first day. That is usually a low-risk trade since the real good news comes when the stock proves it can move up from all the hype surrounding the offering itself and if it falls back the stop to exit is close by.

So, with history on our side, let’s take a look back at one of the most famous IPOs of past couple of years – FIT.

FIT came public in 2105 at 30.40 and had a high on its first day of 31.90, a low of 29.50 and a close of 29.68. That would make the “sacrosanct” range from the 31.90 high to the 29.50 low (see the blue rectangle on the chart below).

The next day, FIT closed at 32.50. That was the buy signal as it finished outside the first day’s range. It then rallied as high at 51.90, a pretty nice rise in a couple of months.

I’m not one for fundamentals but how far did anyone think the company was going to go on a gadget product keyed to New Year’s resolutions and open to competition from virtually everybody?

Needless to say, like New Year’s resolutions themselves, the stock began to fade and by the end of the year 2015 it was violating its “sacrosanct” first day’s range. It started 2016 with a serious break to the downside on substantial volume making it a clear short in IPO trading and, as they say, the rest is history.

It has now dropped into the $5 range from its IPO low of $29.50 in the face of one of the greatest bull market’s in history.

This price action, long or short, is the same with every IPO.

By the way, history, me thinks, is the best market indicator of all.

(click on the chart for a larger view)

$SPY – Sideways to down?

After four days up in a row most of the major indexes are due for a pause.

The market is overbought almost across the board. In my nifty-50 stock list, 29 of the stocks are overbought (that is a lot), of the nine 3x-leveraged ETFs I follow eight are overbought.

Given how much bullish momentum is in the market it is most likely it will be a sideways move, and if down, not down much (see chart of SPY below).



PRICE: Buy. (Day 4).
VOLATILITY: Sell, (Day 2).


SPY CLOSE – 273.42
QQQ CLOSE – 160.92
CNN MONEY’S FEAR AND GREED INDEX: 75, rising, greed level).
NIFTY-50 STOCK LIST: 34 Buys; 29 Overbought, 4 Oversold, 6 new buys today, 3 new sells.

(click on this SPY chart for a larger view)

#Stocks – Bellwethers kick off new year with a bang

All but one of my bellwether stocks have started the year so far with solid percentage gains.

Only GS lags, up at the moment only 25% on the day. The leaders include BABA up 5%, NFLX up 4.6% and FSLR up 3.5%.

For the rest see the charts below:

(click on charts for a larger view)

A manic Monday in four-day-old $LFIN

Day 1: Came public at 6 dollars.
Day 2: Dipped into the $5 range.
Day 3: Wandered up to $20.
Day 4 (today): Opened at 39, ran up to 140, halted by Nasdaq at 126, reopened at 59, ran up again to 96, halted again at 75, reopened again 69, halted again at 62, dropped to 43, popped to 87, closed at 72, up 228% for the day.

Up 11 times its IPO four days ago.

(See the crazy 10-MINUTE chart below.)

How does this happen?

In a word — BLOCKCHAIN.

LFIN, LongFin Corp, came public four days ago and bought a blockchain company, Ziddu.com, and the stock went nuts. Wrote recently about RIOT, a biotech, which doubled on changing its name to Riot Blockchain. And already, according the MarketWatch, this latest blockchain jackrabbit is being investigated for securities fraud.

Likely this is another mania, to go along with bitcoin, that is just beginning. And it will all be insane if it goes on long enough, and in the end if it gets big enough it will kill the bull.

(click on the chart for a larger view)

#MarketTiming – What a RIOT!

The late great Kennedy Gammage of the Richland Report used to always say “buy when the market tells you, sell when the stock tells you.”

He was making allowance for stocks that defied the general market’s move or giving stock pickers something to do to impress their clients. What he did not tell was that most often when the market says sell, so does the stock.

As I’ve written here repeatedly, I keep a nifty-50 list of stocks, which I follow both as an indicator and for their individual abilities to move with the market. Every so often (roughly quarterly) I sort the list and add in new stocks to keep it current and vibrant.

On the last sort, the stock symbol RIOT vaulted to the very top of list virtually from out of nowhere. Here is its profile on Yahoo Finance:

Bioptix, Inc., through its subsidiary, BiOptix Diagnostics, Inc., develops enhanced surface plasmon resonance technology platform for the detection of molecular interactions. The company also focuses on animal healthcare and owns important intellectual property rights related to veterinary products. In addition, it has granted a license relating to single chain reproductive hormone technology for use in no-human mammals, which is under active development by the licensee bovine rFSH. The company was formerly known as Venaxis, Inc. and changed its name to Bioptix, Inc. in November 2016. Bioptix, Inc. was founded in 2000 and is based in Castle Rock, Colorado.


Recently, it seems, Bioptix, Inc. changed its name to Riot Blockchain, Inc. and its stock went insane, rising from $8 to $23 in four trading days. Then quickly dropped back down as far as $13 in three days. Then wandered sideways while the Nasdaq pulled back and my three swing signals – market timing signals based on Price, Breadth and Volatility – remained on sells. When finally, the swing signals began to click in with buy signals (see the chart panel below), RIOT took off riotously again, rising 101% on the price signal, 92% on the breadth signal and 96% on the volatility signal in less than five days (again, see the chart panel below) – as Kennedy Gammage would say “buy when the market tells you.”

None of this makes any sense to me. I like to think this is three guys smoking weed in Castle Rock, Colorado, where it’s legal who get the brain stroke to go for a “blockchain” in their name because they sort of are one…and laughing at the idea. Wouldn’t that be a riot? What a stroke!

Well, Wednesday we may get a chance to see if “sell when the market tells you” is more telling than “sell when the stock tells you” since all of my short-term swing signal gave sells today for tomorrow’s open (see table below). Geez…going to have to take swing profits on these signal, somewhere around 90% to 100%. On a stock in three to five days.

What a riot!



PRICE: Sell. (Day 1).
VOLATILITY: Sell, (Day 1).


SPY CLOSE – 266.78
QQQ CLOSE – 155.69
CNN MONEY’S FEAR AND GREED INDEX: (65, rising, greed level).
NIFTY-50 STOCK LIST: 27 Buys; 6 Overbought, 4 Oversold, 4 new buys today, 4 new sells.

(click on the chart panel for a larger view)

#MarketTiming – said bounce and so it came to pass

Yesterday, my nifty-50 stock suggested a bounce in the market today and so it came to pass.

In the process, the bounce turned long-term breadth up, to go along with the buys now on all of the swing signals (see panel below). With 15 individual buy signals on the nifty-50 list today, the list itself moved to middle ground from oversold which would suggest more to come to the upside.

All of the leveraged index ETFs – TQQQ, XIV, UPRO, TNA – are buys on the open tomorrow, as well as 9 out of the 12 bellwether stocks I follow (see chart panel below).

With all of those positives in the midst of a bull market, one has to assume this is once again going up. Until it doesn’t.



PRICE: Buy. (Day 2).
VOLATILITY: Buy, (Day 3).


SPY CLOSE – 264.07
QQQ CLOSE – 154.02
CNN MONEY’S FEAR AND GREED INDEX: (60, stalled, greed level).
NIFTY-50 STOCK LIST: 24 Buys; 8 Overbought, 10 Oversold, 15 new buys today, 1 new sells.

(click on the chart for a larger view)

#STOCKS – Gonna huff and puff and blow your house down…

It’s never advisable to short a sector making a straight up move in a bull market. So let’s just call this a heads-up on a sector where sometime soon heads are going to roll.

Housing stocks and housing prices have gone crazy again. Just like in…uh, 2007. History repeats here and I suppose there are those out there in major cities bidding up asking prices on the belief that it’s different this time and even if is isn’t ten years or so from now they will break even on the house they overpay for today.

But it must be noted Toll Brothers (TOL), always the leading stock in the sector, took 6.4% hit today on its earning miss and gave a blow to the rest of the sector at the same time (see the chart panel below). From a charting point of view, today left a lot of uncertainty, if not downright fright, in the sector as measured by all those bearish candle patterns in the stocks. HOV, at less than $3 a share, always get weakest fastest, but consider the doji in the sector ETF, XHB, and in the builder,DHI…

Now is this a just shot across the bow or a direct hit on the housing sector ship?

Either way, heads up! Especially investors.

And P.S. if this sector starts to sink, put a spyglass on the banks.

(click on the chart panel for a larger view)