August 9, 2017

I suppose I could say that my caution as expressed in recent reports was finally rewarded yesterday as the market reversed to the downside, quashing the Dow Jones Industrial Index’s attempt to post twelve straight up days. The break occurred after President Trump uttered a stern, if not an outright saber-rattling, warning to North Korea, promising, “fire and fury” and a veritable... [more]

August 6, 2017

Earnings roulette season is in full swing, and has come with its share of big winners and equally big losers. On Friday, we saw the #1 stock in the #1 stock group, Applied Optoelectronics (AAOI) blow up in spectacular fashion with a 30% gap-down move. After posting a 50% or so rally over the prior month as it briefly flirted... [more]

August 2, 2017

Your first clue that things aren’t exactly right is the failure of leading names to hold constructive pullbacks to logical areas of support. Since we seek to buy stocks on such pullbacks and then keep risk to a bare minimum by then using that same area or line of support as our selling guide, these failures to hold support will quickly and naturally force us out of any new positions we take. This... [more]

July 30, 2017

The market once again did what it loves to do when things start looking just a bit too rosy on the long side: the old “yanking of the rug.” On Thursday, it pulled the rug out from underneath investors after a brisk opening move to the upside led by a post-earnings gap-up move in Facebook (FB). But that move in FB topped... [more]

July 26, 2017

The Fed had no surprises for the market today, keeping rates steady and then issuing the usual central-planning hubris about “stimulus,” “accommodation,” and “guiding economies toward optimal levels of inflation and full employment.” I always feel that they should add in the line from that well-known TV commercial, “So easy even a cave-man (or woman) can do it!” Following... [more]

July 23, 2017

After posting nine straight up days the NASDAQ Composite Index finally took a day off, pulling back slightly on Friday as volume declined on an options expiration day. So far, the action remains constructive, with no signs of distress. A lot of leading stocks are extended, sure, but that in and of itself is not a sign of an impending, major correction.   ... [more]

July 19, 2017

The market remains imperious as it keeps driving higher despite the negative news flow, all of which just mortars more bricks into the wall of the worry that this market likes to climb. Yesterday the bumbling ineptitude of the Republican-led Congress was on fully display, as another major policy initiative, namely healthcare reform, was shelved again. The market sold off early in the day... [more]

July 16, 2017

The NASDAQ Composite Index shrugged off any ideas of resistance at the prior declining tops trendline and instead flashed a nice trendline breakout on Thursday. As I pointed out on Wednesday, the declining tops trendline could just as easily provide a point of reference for just such a breakout as it could overhead resistance. Low volume accompanied Friday’s continuation... [more]

July 12, 2017

Those who love to ride rollercoasters will find much to like about this market, but the unwary might have been shaken out by yesterday’s big sudden intraday sell-off. This occurred after news of Donald Trump Jr. releasing the email chain he exchanged with a Russian attorney with no ties to the Russian Government was released. Once the news algos, algos that are allegedly programmed to read... [more]

July 9, 2017

On Wednesday I wrote that if we see the NASDAQ Composite Index peel away from its 50-day moving average on the downside then the S&P 500 Index would likely retest its 50-day moving average. That is what we saw on Thursday, with the S&P closing just below the 50-day line on higher selling volume. Friday’s jobs number came in at a seasonally adjusted... [more]