#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)

$DBX – An IPO easy to buy at the right price…

When a hot IPO is launched, as was the case with Dropbox (DBX) yesterday, the headlines are usually how much it leaped over it initial offer price. That is a worthless commentary. Unless one is on some broker’s favored clientele list, it is impossible to have the stock and to be able to sell it on that leap.

So what to do?

With IPOs this is actually one of the easiest decisions in stock trading. Simply note the high price and the low price on day one of the IPO. Those are the lines in the sand.

Buy on a close above the high of the first with a stop loss below the high of the first day. With DBX that buy is a close above 31.60. If the stock drops back below that number, take the loss (likely small) and forego the anxiety of being locked into a foolish IPO buy made on whatever day. If it rallies from there, it could trend up and become a longer-term investment.

#MarketTiming – Plunge to a climax low?

The general market seriously tanked today – Dow down 724 points, SPX down 68, the Nasdaq Composite down 178.

And it was an across-the-board slaughter as every one of the nine sector ETFs I follow slammed into sell signals, with eight of the nine now oversold on the close.

The all-important long-term breadth indicator – the McClellan Summation index — is on its fourth day down, making it obvious which side of the market to be on, but even more telling is that this is a wind down that began nearly two weeks ago on the first day down from the bounce top on March 12th (see the chart below).

There is a lot of stuff going on that could have led to this drop — Trump, Trump’s tariff plans, Trump’s saber rattling, Trump’s staff members bailing as fast as they can, the Trump chaos (we have a sitting President in litigation with a porn star and so far she and he lawyer are kicking his and his lawyer’s butt), uncertainties springing up everywhere; and the Fed is raising interest rates.

All that is taking a toll of course but this a market that has been moving up too far and too fast so the last two weeks were at some time inevitable.

Is this a bear market? Still hard to tell. The VIX, which measures volatility, is above 20, which is the territory for a correction in a bull market, but it is for the second time this year flirting with the 25-level (it closed at 23.34 today), and that is the door to a bear market. If the SPY (SPX) takes out February low either right now or after a bounce without a significant rally, a bear’s growl may, for sure, be heard.

The trouble with bear markets is by the time everyone feels enough pain to panic they are over. I suspect if this becomes a bear market that pain is going to last a lot longer than anyone believes.

But back to today. So was this drop enough downside to make a climax low. Probably not but it could lead to another quick bounce. Given that there are now pretty defined resistance trend lines in place (see the chart), this next bounce might be worth trading but it is not likely to do anything more than produce another selling for shorting opportunity.

Regardless, this is a market that after two weeks down is oversold everywhere. Four times in the last seven days, my nifty-50 stock list has had 40 or more stocks on sells, which usually indicates the bottom of a swing or the beginning of a bottom. CNN Finance’s “Fear and Greed” index is at an “extreme fear” level (at 9…it can’t go below zero), which longer-term is usually buy territory. As noted above all of the sector ETFs, as well as the index ETFs I follow like TQQQ, UPRO and TNA, are also oversold.

All in all, time for another bounce…

Except this time, maybe a crash into a climax bottom tomorrow and Monday instead (an echo of 1987)…

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Sell (Day 4).

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

CONTEXT:

SPY CLOSE – 263.67
QQQ CLOSE – 162.8
CNN MONEY’S FEAR AND GREED INDEX: 9, falling, extreme fear level).
NIFTY-50 STOCK LIST: 8 Buys; 3 Overbought, 24 Oversold, 1 new buys today, 13 new sells.

(click on the chart for a larger view)

#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)