#MarketTiming – bellwether stocks to surge again…

After a three-day pause in long term breadth it appears the bull market is ready to move these stocks up once again.

What to look for right now?

Buys on the open tomorrow (Friday) for a bullish surge into the weekend with the likelihood this continues for a time next week.

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

Notice most of the stocks have been in consolidations for the past week or so (see the chart panel below). Some are in clear bull flags – NVDA, TSLA — while others simply remain in strong up trends – AMZN, GOOGL, FB. Since stocks generally move with the market, and the mass psychology of the market is again bullish after a pause, I expect most of these to move up more now.

For gamblers looking for the quick bounce — NFLX!

(click on the chart panel for a larger view)

$SPX $SPY – walking the edge of the long-term cliff…

As we end another month and the first half of the year, I thought I’d take a quick look at a long-term monthly of chart of the SPX/SPY, the S&P 500 index and its primary ETF.

Someone (probably the great trader, Linda Raschke) once said if the short term is confusing in the stock market just back to a longer term view and all will become clear.

So what is clear in the here and now?

The bull market is still in progress (see chart below) although that progress has been stalled for this year to date.

The current upswing is completing a three-month rally so a sell-off could come any day now.

The technical indicators MACD and CCI are lagging, setting up as in the past (see the red rectangles on the chart) for a possible sell-off. But at the moment the pattern this time is not complete.

If the SPX had closed lower this month than it closed last month and its volume finished higher than its volume last month, I’d have to say the sell-off is likely right now. But that didn’t happen.

Obviously, the market in general is walking along a cliff (see the blue trend lines)… But until it falls off that doesn’t matter.

So is it going higher? I hate to but I have to shrug on that. Could be but with that cliff edge so close better to be be alert, and best to put in place some protections like trailing stops on any long-term investments.

Buying this? Okay, it remains a bull after all. But, me thinks, only for the short-term while standing every day next to the exit door. If the market charges higher, the short term will have you in, and if it goes screaming lower the short term will take you out.

(click on the chart for a larger view)

#MarketTiming – $TWTR leads latest swing with 33% gain

Been on vacation from this blog for awhile but am back now and will try to be more diligent in posting here.

Now, as it turns out, appears to be an appropriate time to return since latest swing trade on the long-term breath signal will close officially on the open tomorrow. This swing began on the open of the market on 5/31, twelve trading days ago.

In the bellwether stocks (see chart panel below), as of the close Friday, TWTR led the stocks I consider to be bellwethers in this bull market with a 33.2% gain, followed by TSLA up 24.1% and BIDU up 12.6%. Twelve trading days – I’ve said it before but it bulls repeating…this is what swing trading is all about. The position in stocks will be in cash waiting for another swing to begin.

Should be noted, the 3X-leveraged ETF, TQQQ, which tracks the Nasdaq and makes general swing trading easier, is up 12.1% for the trade. FNGU, an 3X-leveraged ETN trading based on the NYSE FANG stock index, is up 33% (remarkably it was relatively small volume).

In addition to TWTR, TSLA, and NFLX, the bellwether stock list also has AMZN, NVDA, GOOGL, BIDU, BABA, FB, and AAPL. The gains for the up swing just ending are in the white flags on the lower right of the charts below. That is a calculation per $100K traded in each position in order to get both a dollar-earned and a percentage gain. Note AAPL is the laggard on the list, up less than one percent for the swing, $800 on $100K. Another example from the charts – NFLX is also up double-digits, 10.7%, $10,690 for the swing.

As for the general market, the sell signal for tomorrow’s open has come most likely because this rally — which longer term price-wise began in early May — is up a lot, overbought and tired.

I would not be surprised, however, by another bounce since short-term breadth has been declining for six consecutive days. Most likely that signals the bounce, at least a feeble one, before a bigger down swing, but if one if particularly bearish after this run up it could signal a hard down thrust this week before the bounce.

(click on the chart panel for a larger view)

#SwingTrading – 2-day swing ending with all bellwether stocks in black

The technical end of this trade, started just yesterday on the open, is tomorrow’s open.

But as of today’s close all 12 of my bellwether stocks are in the black so there’s a good chance they will remain in profits barring any over-night news.

Regardless, it is a market signal that runs this strategy so no later than tomorrow’s open a sell for swing traders it will be (would be nice to have a gap up for that).

My “bellwethers” are TSLA, NFLX, AMZN, BID, TWTR, BIDU, AAPL, GS, FB, NVDA, FSLR, BABA. See chart panel below. The white flags on the lower right of each chart is the current profit per 100K committed to the trade (also correlates to a percentage gain).

The current swing is led by BIDU up 4.5%, followed by BABA up 3% and NVDA 2.9%. That’s in two days.

As a side note BABA is up eight days in a row so if there is market weakness tomorrow it is ripe for a day-trade scalp on the short side.

(click on the chart for a larger view)

#BankStocks – as GS and DB tumble…

It is on my my mind that we’re seeing 2007 all over again in the financial sector stocks.

During the pullback in the SPX since January, housing stocks and the bank stocks have been breaking support and beginning to “stair-step” down (see the chart below), led to the a possible 2008 cellar by DB and now with GS (a bellwether, no less) following suit.

The rest of those I follow – JPM, BAC, WFC, USB – are sitting right on support. It the market takes another hard hit (like tomorrow?), they could all be in solid downtrends.

Needless to say, as the banks and the general market tend to feed on each other in up trends, they can also eat other alive to the downside too.

(click on the chart for a larger view)

#HousingStocks – Remembering 2008…

At the advent of the 2008 bear market, the housing stocks died first, then the banks came apart, and then everything…

So witness $TOL $DHI $HOV $KBH $LEN $MDC $NVR $PHM and then ponder the banks and then ponder…

Not much more to say except to paraphrase Yogi Berra again: “It’s beginning to look like deja vu all over again.”

(click on the chart for a larger view)

#BellwetherStocks – End Of A Swing Trade

The swing trade for buying stocks signaled by the market’s breadth indicators on the open of April 4th, thirteen trading days ago, ended on the open of trading today.

START OF THE TRADE

Despite a choppy market in which neither SPY nor QQQ rose as much as one percent, all twelve of the bellwethers were in the black for the trade and several on the list had rather stellar gains for 13 trading days — TWTR up 20.5%, NFLX up 19.3%, TSLA up 14.2%, AMZN up 13.1% and FSLR up 11.4%.

The Bellwether stocks with single-digit gains were FB, 9.7%; BIDU, 8.4%; BID 7.5%; NVDA 6.3%; BABA 6.6%; GS 2.3%; and last and least (remarkably) AAPL 1.4%.

Once again, market timing has been validated by the stocks even when the market is going no where.

On the charts below, the white flags on the lower left quadrant of each chart is the dollar gains for $100k invested in each particular stock.

Thirteen days…

(click on the chart panel for a larger view)

#BellwetherStocks – ten bull flags still flying…

The general market took a hit today just when it appeared it could break out of its consolidation at recent lows.

All of this may be on news – Trump proposing a possible trade war with China, stewing over the Mueller investigation into everything from his campaign’s possible collusion with Russia, to the crimes arising from his hush-money payoffs to a porn star and Playboy playmate, to his sons’ threatening reprisals for any foreign government not doing their bidding, to allegations everywhere of corruption, self-dealing and maybe even money laundering; and now he’s rattling missiles at Syria (which is to say, at the Russian military).

Is there an Archduke Ferdinand anywhere in Syria?

There was a time when the one thing almost certain in the stock market was that the market did not like uncertainty.

Well, Trump has been the poster boy for uncertainty since the election and yet, remarkably, the market has ignored that, focusing instead on the Republican tax cut and the ripping away of every sane and insane regulation there is. But it’s beginning to look as if it is not quite ignoring his inconsistency and incompetence anymore. Last year it was hard to get the market to go down. Now it’s hard to get it to go up.

Okay, enough of that. What about right now?

This is an update of this POST ON APRIL 5TH.

The top in place in January may have ushered in a bear market (which is my overall bias) but right now the market is trying to bounce, and maybe even rally.

Today was a setback in that effort and every day seems precarious but I want to point to my twelve bellwether stocks. Despite last Friday’s bloodbath and today’s drop, they have all held firm. In fact, ten of the stocks have bull flags (see the chart panel below). My bellwether stocks are: TSLA, NFLX, AMZN, BID, TWTR, BIDU, AAPL, GS, FB, NVDA, FSLR, BABA. All twelve are in the black from the beginning of this bounce on open of April 4th.

TSLA is leading the bounce up 17.8% , followed by NFLX up 10.%, TWTR up 9.2% and now FB, with Mark Zuckerberg’s testimony to Congress, up 9.1%.

As bellwethers these stocks are, so far, saying this market is going to have another surge to the upside soon. Probably by Friday (unless the news gets in the way).

(click on the chart panel for a larger view)

#MarketTiming – Swing trading the bellwether stocks…

My swing signals, based on breadth, price and volatility, turned up in unison on April 3rd for a buy on the open of April 4th.

More importantly, short-term market breadth put in a divergent low in the midst of recent market thrusts to the downside. When that happens, the next step that usually confirms an upside swing is the upturn in long-term breadth. That confirmation came yesterday.

There was a previous discussion and chart of this yesterday HERE).

From stock trader’s or investor’s point of view, the purpose of market timing is tell when to buy. And once again, the bellwether stocks list proves that point.

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

On the chart panel below, the white flag on the right axis is the current gain per $100k invested (also calculated for the percentage gain). At the moment, this upswing is lead by TSLA at 17%, followed by NFLX and AMZN, both up 6% plus. Remember when (three days ago) there was some dope speculating TSLA would go bankrupt and President Dumb-Ass was attacking AMZN like it actually owned the Washington Post? What a difference a day or two makes in swing trading.

(click on the chart panel for a larger view)

#MarketTiming – From follow through to follow through

The general market, after Tuesday’s bounce, followed through today for big gains across the board, made all the more bullish by coming back from a deep gap down.

The Dow, or instance, was down 500 points at the open and finished up 230.

The question now, of course, can there be more tomorrow.

All indications are this correction is over with many of the indexes touching their 200 daily moving averages, with my nifty-50 list of momentum stocks triggering 30 buy signals in the past two days (Monday all but two of those stocks were down, today all but six were up), with CNN Money’s Fear and Greed Index finally lumbering up off a very low readings at 12 today (it got as low as six and can’t go below zero). That later index is still registering “extreme fear” which is the time a time for investors to be looking to buy stocks.

But most importantly (see the chart below), short-term breath put in a low above a low in negative territory, a divergence with the SPY Tuesday which needed a follow through into positive territory to turn the all-important long-term breadth up. The follow through came today.

All three of my swing-trading signals, based on price, breadth and volatility, are on buys now.

So this market bounce has more to come and could morph into a full-fledged multi-week rally.

Some notes. AAPL is probably the safest bet during a market bounce (emphasis on “safest”) but NFLX, NVDA and TSLA will probably out-perform among the big boys. Look at TSLA today, up 7.5% on the day and 13.7% from the open — there was some dope just last week predicting Elon Musk’s baby would go bankrupt.

(click on chart for a larger view)