July 29, 2018

Earnings roulette season has been living up to its name with stocks flying in various directions after reporting what are deemed to be good or bad reports. Over the past two weeks, we’ve seen high-profile rallies after earnings in Amazon.com (AMZN) and Alphabet (GOOG), while Netflix (... [more]

July 25, 2018

I wrote over the weekend that I wasn’t seeing anything that compelling on the long side. I’ve already discussed in the last two reports the idea that most of these U&R long set-ups that occurred 2-3 weeks ago have run their course in the near-term and that this set up the potential for a market pullback, or at least some backing and filling. We’ve seen a bit of that over the past... [more]

July 22, 2018

The major indexes have struggled to make further upside progress after clearing to new highs last week. As I wrote on Wednesday, I believe that the fat part of the index rally in terms of catching high time-value trades on U&R long set-ups has passed, and that this sets the stage for a possible market pullback. The optimal point at which we saw these U&R set-ups materialize occurred at the... [more]

July 18, 2018

The undercut & rally (U&R) set-up remains our most potent long-entry weapon in this market. Even as Investors Business Daily laments the lack of standard-issue base breakouts by leading stocks, scores of names are turning on U&R moves and posting decent run-ups. As stocks push up the right sides of potential new bases and approach new highs, they tend to lose momentum and may... [more]

July 15, 2018

A news item citing one Chinese official who made mention of a need to come back to the negotiating table raised hopes of a trade détente and caused the market to rise from the ashes of Wednesday’s sell-off. This sent the NASDAQ Composite Index to all-time highs on Thursday on higher volume, keeping the market’s uptrend alive. Friday’s action slowed, but the index still closed... [more]

July 12, 2018

The announcement of more U.S. tariffs on an additional $200 billion worth of Chinese goods yesterday after the close upended a four-day market rally. The news sent the futures down hard overnight, leading to a gap-down open this morning, sending all the major market indexes down on the day. The NASDAQ Composite Index came within 0.4% of its all-time highs yesterday, but the... [more]

July 8, 2018

In the face of bearish action on Tuesday, the market once again proves why one simply cannot take a rigid bullish or bearish position at any given point in time. The reality of this market is that there is still plenty of liquidity to drive a herd of algos in either direction, and one must be ready to move with the action as it unfolds in real-time. Not that it is always that easy. This market... [more]

July 4, 2018

The first half of a truncated Fourth of July holiday trading week has not typified what I would call quiet holiday trading. It started out with a sharp futures-led gap-down open on Monday that saw the indexes levitate off their lows in an apparently bullish reversal to close up on weak volume. But appearances in this market can be deceiving. Tuesday, which was a short trading day ahead of... [more]

July 1, 2018

The NASDAQ Composite Index briefly undercut its 50-dma on Thursday morning, as I indicated it might in my Wednesday report. That set up the context for an oversold bounce off the 50-dma that carried as high as the 20-dema on Friday. The upside push on Friday was no surprise given that it was also month-end, quarter-end, and the end of the first half of 2018. The bounce was also... [more]

June 27, 2018

The market started the week out on a decidedly negative note after the Wall Street Journal reported that the Trump Administration was planning to impose restrictions on Chinese investment in U.S. technology companies. This sent the futures down sharply over the weekend, leading to a big sell-off on Monday. After stalling and churning yesterday on a reaction rally attempt, the indexes... [more]