Just over 5 months ago, the overall US stock markets began a decline which has continued up to this writing. Of course it would have been difficult to predict the ensuing course of prices other than to use the simple gauges of support and resistance levels. What was observable were momentum indicators hinting at a … Continue reading Are We There Yet?
At Turn
Cyclical Strategies
One of the comments I often address is whether only buying stocks that are making new highs is the best methodology. If you are an active trader, this makes sense because you want to go where the momentum is. While stocks do ebb and flow, it makes sense to be invested in the strongest stocks … Continue reading Cyclical Strategies
Market Update May 14
On March 22, almost a month ago, we discussed scenarios for the direction of the market, specifically the Dow Jones in the weeks to follow. At the time, the market was at maximum fear and volatility measures were spiking to all time highs. Because of the climatic nature of the sell off at the time, … Continue reading Market Update May 14
Contrarian Ideas
The majority of articles that I've written are concerned with finding the best investment vehicles when they are most in demand, hence the focus on relative strength and momentum. There is another school of thought that views investments from an entirely different perspective, that is from a contrarian and necessarily longer term horizon. Investing in … Continue reading Contrarian Ideas
Tactic Update
We've been able to logically navigate the swings in the market thus far using some technical tools, some logic and as always, a bit of luck. Much of what has moved markets has been unpredictably external to market dynamics and we are still under some uncertainty in that regard. The activity in the markets reflects … Continue reading Tactic Update
Progress Status
The panic selling that overwhelmed the markets over the last month has subsided. The VIX indicator has come off of its violent spike in mid February with a current reading of 44 versus a peak of 82 just about a month ago. While this statistic has fallen off the high, we are still in an … Continue reading Progress Status
Internals
Beyond the obvious actions of price and volume, there are also measures of the internal state of the markets that give clues as to long term health and potential trend inflections. Breadth, or the measure of advancing issues versus declining issues can reveal whether a market's present trend is flagging and about to either pause … Continue reading Internals
Next Tactics
In a previous article, we discussed the possible scenarios for market direction once peak volatility passed. Once bottoming bars were established by the doji shaped candles (labelled climax low on the chart below), the risk reward parameters are established and projections can be made. With specific reference to the Dow Jones index, the first fibonacci … Continue reading Next Tactics
Leaders And Laggards
As hoped for, the period of peak volatility has passed ( for now) and stock prices have bounced off their panic lows. We witnessed some genuine capitulation as some daily price bars showed extreme intraday fluctuations, falling to new lows only to close near the opening prices. As we've discussed, such price bars are a … Continue reading Leaders And Laggards
Beer On Sale
As we survey the damage that has been inflicted on heretofore solid American corporations such as Boeing, Hyatt Hotels, IBM and even AAPL, we have to make some assumptions as far as their futures moving forward. We'll go out on a limb and assume that the world won't end in 2020, in which case, consideration … Continue reading Beer On Sale
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