Apr 29th: Back in the saddle after completing my second CMT exam. The markets teased the bulls with Thursday's bullish engulfing patterns on higher volume but in the end it was the bears who took the week with heavy volume selling Friday. The sweep of stop hits (17 in all - see below) was testament to the bears, particularly as many of these stop hits occurred on the 'bullish' Thursday. If ever there was a reason for staying on the sidelines this was it.
There wasn't much gloss to Friday's trading. The NASDAQ finished near Thursday's lows but was able to trade above the 50-day MA. Lighter volume may have been some consolation for the bulls but the previous bullish engulfing pattern should not have retraced as much as it did given the accompanying volume. The NASDAQ
100 fared little better as the earlier trendline breakdown was reaffirmed as its bullish engulfing pattern was rejected on significantly heavier volume. The technical picture in this index remains very weak as the rate of separation from the S&P increased. The 50-day MA is the bulls only weapon at this stage of the proceedings. The large cap indices [Dow and S&P] knocked around just above (Dow) or below (S&P) nearby support/resistance. Their position of leadership relative to the Tech indices and (now) the Russell
2000 was won more by default rather than any particular bullish strength in these indices. Both of the large cap indices [Dow and S&P] remain contained by lengthy bearish divergences in the MACD trigger lines, much like the Tech indices [NASDAQ and NASDAQ
100] and to a lesser degree, small caps [Russell
Secondary tech indices [$NASI, $NAA50 and $BPCOMPQ] remained bear side
as the $BPCOMPQ joined the other two indicators with a drop below its 5-day EMA. Volatility continued to find support at 15, lurking in wait for a fearful move upwards. A tough market for the bulls - but neither a good one for shorts - tick tick tick...
Target hit: none
Stop hit: Plenty of spring cleaning to do from the last couple of days. CPST hit its raised stop after its initial feature on April 11th. The April 11th play closed for a 7% loss. DFG hit its raised stop from April 19th even though it held support of a February-April horizontal price channel; if still holding use an alternative stop at $50.38. The February Subscriber feature closed for a 3% gain and the April Breakout play for a 4% loss. HOFT undercut $18.33 support to hit its April 3rd stop for a 7% loss (although the stock did bounce neatly off the 50-day MA - it still has long side merits at this juncture, stops on a loss of the 50-day MA). ILSE suffered a volatile Thursday to reverse earlier positive gains. The March 23rd and April 26th Breakout plays closed for a 3% gain and a 5% loss respectively. JKHY was a Subscriber pick from February and a Breakout play from April 4th; the February play closed for a 1% gain and the April feature for a 5% loss. LNY dipped out of its sideways consolidation to hit its April 21st stop price. The stock also featured to Subscribers on December 23rd and as an earlier Breakout on February 23rd. The December feature closed for a 32% gain, the February feature for an 8% gain and the April feature for a 3% loss. VICR reversed sharply on Friday to hit its April 26th stop price. The latter play closed for a 5% loss while the April 4th Breakout play closed flat. BG was a Subscriber pick from April 24th. The position was whipped out after a large gap down for a 6% loss. CPE hit its stop following 4 days of losses. The March 17th Subscriber play closed for a 4% gain while the April 21st play closed for a 5% loss. CLS had the misfortune of hitting its stop on the day of the big white (bullish) candlestick. The April 4th Subscriber play closed for a 8% loss. DTLK was able to finish Friday with a bullish hammer at support but not before it clipped its stop intraday for a 11% loss. GTXI has spent the last few weeks rolling over (on increasing volume). The January 20th Subscriber play closed for a 7% gain. LPSN was a March 27th Subscriber pick was stopped out on Thursday. The play closed for a 2% gain. NETL dropped below near term support (but not below the 50-day MA) to hit its April 17th stop for a 6% loss. The March 29th Subscriber play closed flat. NBL was a Subscriber feature from April 11th and closed for a 2% loss. NVD was a Subscriber play from April 25th, it closed for a 5% loss. TRGL cut back towards 50-day MA and wedge support but not before the March 29th Subscriber play hit its stop for a 3% loss.
Apr 25th: This will be the last post until the weekend and with a bit of luck the market won't do a whole lot. Volume climbed in all markets, making Tuesday a technical distribution day. Adding to the bulls sweat is the continued lag in Tech indices versus large caps; with fewer stocks carrying the market it won't take much for it all to topple over. The S&P lost key support of the October trendline but was able to hold above the 20-day MA. The NASDAQ
100 lost support of the new trendline but the 50-day MA is only a few points below. Finally the Dow failed to hold its break of 11,324 but has both the 20-day MA and 50-day MA to lend support if needed. Small caps [Russell
2000] were able to dig their nails in at the 20-day MA, but for how long? Bears have a better case.
Target hit: none
Stop hit: JOBS hit its raised stop. The stock featured as a Breakout for April 18th and closed flat. The small hammer still gives the edge to the bulls it just needs the overall market to help. SNUS hit its stop after 5-weeks of declines. The stock featured as a breakout for December16th and March 14th, closing for a 5% gain, and a 9% loss respectively. EVVV was a Subscriber pick for April 24th which failed to live up to its billing. It closed for a 4% loss.
Apr 22nd: Friday did for the bears what Tuesday did for the bulls. Higher energy prices were the cause celeb for the drop in the Tech markets, but don't ask me why $73 oil was completely ignored on Tuesday when bulls were a rampaging on Fed news, while $75 oil is considered to be the end-of-the-world. The week was like a microcosm of a bull market; with money surging into Tech [NASDAQ and NASDAQ
100] and small caps [Russell
2000] early on, only for it to rotate into 'safe' large caps by the end of the week [Dow and S&P]. Media talk of 5-year market highs (in Tech markets) should be viewed within the context of a near 100% gain in the markets from October 2002 (1,109) to the end of 2003 (2,153) and the bare 10% gain in the markets since (2,378 as of Friday). The only real winners in this scenario are your broker.
In Tech markets [NASDAQ and NASDAQ
100] the MACD bearish divergence held firm in the face of last weeks buying. Higher volume distribution in these markets, on huge bearish engulfing patterns, has brought into play the potential for double tops. Such patterns would be confirmed on a close below 2,299 in the NASDAQ and 1,684 in the NASDAQ
100. Of greater significance was the demotion of the Tech markets as laggards to the large caps [Dow and S&P]. At least small caps [Russell
2000] held their leadership position. The Russell
2000 was also helped by its continued trading above 766 support, but it too is shaping up a MACD bearish divergence. Large caps [Dow and S&P] closed the week with their head under the duvet covers and were able to avoid the Tech slaughter. The semiconductor index was (unusually) left relatively unscathed (although down) from Tech selling
Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] were notable for the picture perfect reversal off resistance in the $NAA50. It will take more than modest gains in the $NASI and $BPCOMPQ to prevent the most recent bullish crossover in the 5-day EMAs from turning into yet another whipsaw signal. The best times to buy have occurred when the $NAA50 has lurked in the 600s and below, not at 1,400 and above. Greed can kill many a profitable account - last Tuesday's action was no exception to this rule.
Target hit: ECOL was a Subscriber feature for March 8th. The stock still looks in good shape for further gains (look for $30-35), but for my purposes it has reached its measured move target for a 30% gain.
Stop hit: ASIA was a Subscriber play from March 10th. The stock shed 8% with earnings due next week. The stock closed for a 3% loss having been up 16% at one stage. PLMD was a Subscriber pick from April 10th. The stock closed down 9% in heavy trading to close the play out for an 8% loss.
Apr 20th: Today belonged to the Dow (well GM really) as money rotated from speculation to 'safety'. Commodity stocks were the big losers - although given their recent run it could hardly be called surprising. More worrying was the churning in the Tech markets [NASDAQ and NASDAQ
100]. The selling was enough to reverse Wednesday's small breakout in the NASDAQ, but not enough to give bears a strong handle on the markets. Technicals of Tech markets remain hemmed in by bearish divergences in the MACD trigger line. The new closing high in the Dow was impressive. The S&P was less enthused and instead pushed a breakout on a more neutral spinning top. The Russell
2000 made a positive test of new support at 766 and maintains its leadership edge. Secondary Tech markets now lie all bullish with the $NASI the last of the secondary indicators to make a bullish cross of its 5-day EMA. Volatility again found support at the 200-day MA (with a bullish hammer). Will Friday's option expiration send a chill wind across the markets?
Target hit: ADS gapped up big on strong earnings.The point-n-figure chart holds to a $99 price target, but for my purposes the stock has reached its target price. The April 13th Breakout play closed for an 18% gain. The March 9th Subscriber pick for a 24% gain.
Stop hit: MOT hit its stop after gapping down yesterday on earnings. The March 14th Subscriber play closed for a 9% gain and the April 13th play for a 5% loss.
Model Portfolio: HEC and RWC added.
Apr 19th: The quiet action was just what the market needed after Tuesday's gains. It would have been easy for bears to trigger a swathe of profit taking had they won the first half hour of trading. But it was a fine line between breakouts (NASDAQ and semiconductor index) and resistance (Dow and S&P). The market leader, Russell
2000 continued to pile on the buying as money went to work in more speculative stocks. Of the secondary tech indicators; the $BPCOMPQ followed the $NAA50 with a bullish buy trigger of the 5-day EMA. All three tech indicators [$NASI, $NAA50 and $BPCOMPQ] are overbought, but the $BPCOMPQ has the most room to maneuver to the upside (some 12 points). Biggest concern for the bulls is the push in volatility down to long term support at 15, compared to the 80s back in 2000 and 2001. This market could go either way depending on how support/resistance breaks
Target hit: none
Stop hit: CMVT was an oversold Subscriber pick from April 5th. The stock closed for a 4% loss.
Apr 18th: One for the 'older' traders out there; it was like a throwback to a time when there was volatility in the market and daily trading curbs would kick in to keep a lid on the buying/selling. Adding to the interest level was the corresponding rise in oil prices (no one seemed to care about this, which was kind of odd given the number of times oil prices are used as an excuse when the market falls). All of this froth coming on the release of the Fed minutes. The Fed will at some stage stop raising (an eventually reduce) interest rates but with energy prices on a continued ascent it will be hard for the Fed to quit doing so soon (even if they overshoot...again). Unfortunately, interest rates remain as they were before the start of trading and the days action had more in common with panic buying (+short covering) rather than rational investing.
Technical breakdowns in the S&P, NASDAQ
100 and Russell
2000 quickly reversed, leaving behind bear traps. The proximity of Monday's closing prices to these resistance levels meant it didn't take more than a few points worth of upside movement to drive short covering. Once this got underway and volume picked up, others joined the party who saw as an opportunity to go long. The question now is how the market will react to the hangover all this exuberance created. There will be plenty of people sweating on both sides of the fence. Maybe the day traders will be the only winners here?
There are still a number of lingering issues to be resolved. First, the NASDAQ closed right on resistance from the supporting (now resistance) March trendline. It also failed to challenge 2,368 resistance from earlier this month. The index should test this price tomorrow but whether it can break it will be another thing. The MACD barely budged because the NASDAQ is still range bound; prices were at the bottom of this range, now they are closer to its top. The NASDAQ
100 reasserted support at 1,700, but remains well off January highs. Gains in the semiconductor index were enough to switch leadership from the NASDAQ
100 to the semiconductor index. What will be important for the NASDAQ
100 is a resistance breakout in on-balance-volume. The primary market leader remains the Russell
2000. New closing highs will keep the speculation bubbling, but it too is suffering from a developing MACD trigger line bearish divergence. The Dow also moved from support to resistance. It did manage a breakout from a bullish flag to confirm the bounce off October trendline support (and the 50-day MA), but 11,335 resistance is still out there. The S&P enjoyed a solid day, negating the earlier trendline break, but closing 3 points shy of resistance. The bearish divergence in the MACD trigger line dating back to November is still a concern.
This may read like a script for "Debbie Downer". It is not the intention to be all doom and gloom - Tuesday's rally was bullish and was accompanied by solid volume; but this was a rally from overbought conditions (as measured by the Tech Secondary indicators [$NASI, $NAA50 and $BPCOMPQ]). The risk:reward remains unfavorable for large new positions, but it does provide an ideal opportunity to take stock of current positions and to raise stops to the most recent reaction lows (most likely Monday's lows) to protect profits. If today's gains can't hold, don't expect any other rally to come to the rescue.
Wednesday will be an interesting day.
Target hit: GRZ featured as a Breakout pick for April 6th and reached its target for a 50% gain.
Stop hit: CMLS was an oversold Subscriber play from February 27th which failed to benefit from the buying. It closed for a 6% loss.
Apr 17th: The boat creaked that little bit more as markets slipped further into the mire. No market escaped the selling as volume climbed above Friday's (but was below average). The index with the most to benefit could be the Dow. It sits bang on support of the October trendline, allowing for an aggressive buy with a stop on a loss of 11,047. The NASDAQ held the 50-day MA for another day, but the bearish divergence in the MACD trigger line continues to dominate. The NASDAQ
100 lost trendline support from March, but held the 50-day MA. The Russell
2000 remained trapped inside the narrow rising channel bounded by former October trendline support (now resistance) and the parallel support line from the March bear trap. What was most interesting in this index was its return to the role of leader (relative to the NASDAQ). The S&P is perhaps the most vulnerable index as it entered the void between the 50-day MA and the 200-day MA some 35 points below - it is not 'dead' yet, but the few points lost today were enough to break 50-day MA support.
Target hit: none
Stop hit: none
Apr 13th: Looks like we will have to wait until next week to see what happens in the markets. No real change as Hamptons' volume played out for a second day. The Dow was able to close up on slightly higher volume (a technical accumulation day) as the NASDAQ regained its leadership role against this index [On a side note, the DIA at support is an aggressive buy]. The NASDAQ
100 held 1,700 support for another day, gainining on higher (but well below average) volume; it too was a technical accumulation day, but I wouldn't bet the house on current buying lasting. The Russell
2000 was unable to break above former October support, spending the second day below new resistance. The S&P, NASDAQ
100 and semiconductor index lingered around support and were little changed on the day. Have a good weekend.
Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] remain bearish; confirmation coming on MACD trigger 'sells' in the respective indicators. Consequently, I have redrawn bearish divergences in some of the MACD trigger lines.
Note: My upcoming MTA exam will limit my updates for the next couple of weeks on the website and the blog. Updates may not be daily, but I will keep members abreast of important changes. The exam is on April 29th.
Target hit: none
Stop hit: PRSC hit its stop after the second day of losses brought the stock down into this price. The April 12th free Breakout play closed down 4%. A hit its stop after gapping down on the open. The stock did finish on a bullish piercing pattern to close over its 50-day MA, but it came a day late to save it. The April 4th Subscriber play closed for a 5% loss. XIDE clipped its stop after a 4-day pullback. The April 10th Subscriber play closer for a 14% loss. TKP was another Subscriber stop hit. It featured for April 11th and closed for a 2% loss. MDC was a stop hit after a succession of losses. The April 6th play closed for an 8% loss.
Apr 12th: Today didn't change much from yesterday. The indices which broke yesterday are still broken today. The remaining indices which are above support are still holding support.
The Dow managed modest, low volume, gains off the 20-day MA - but it was a small step in a process to reverse 3 weeks of decline. The Russell
2000 did something similar, but October trendline resistance is of greater importance.
Target hit: none
Stop hit: PETM was a Subscriber pick from December 13th and March 15th. The stock just clipped its stop price as the sideways consolidation continues. Closing the breakout gap at $26.10 looks favored at this point. The December play closed for an 8% gain, the March play for a 3% loss. UIS hit its stop following an earlier loss of trendline support. The stock closed on a bullish harami so current longs could readjust stops to the days lows instead, but for my purposes it is a stop hit for an 8% loss.
Apr 11th: The cracks widened in markets across the board. What was a modest loss in the NASDAQ on Monday, turned into a higher volume rout on Tuesday. The 20-day MA was quick to give way, so bulls will now dependent on the 50-day MA at 2,295 to lend support. Adding to the woes was a MACD 'sell' signal in the trigger line, which has led to the redrawing of the bearish divergence to account for this change. The next thing to watch for will be tech underperformance relative to the large cap indices. The NASDAQ
100 was more fortunate in that it held nearest support at 1,700, which also approximated to the 20-day MA. Technically, it is not in as bad of shape as the NASDAQ and this is likely due to the slightly firmer action in the semiconductor index. Small caps were the real losers on the day. The Russell
2000 capitulated along October trendline support, holding to a weaker support line drawn from the February bear trap but also a lingering 50-day MA at 738; the 20-day MA was of little assistance in the end. Worse was the reversal in performance relative to the S&P. The latter index suffered a similar fate to the Russell
2000 with its loss of October trendline support. The higher volume ranked as distribution - not helped by the 'sell' trigger in on-balance-volume. The 200-day MA at 1,245 looks more attractive area to find support. The Dow was spared most of the technical damage as it held October trendline support (and the 50-day MA). It did not escape the selling and Tuesday's action ranks as distribution. Unfortunately, technical weakness accelerated, and this index also looks destined to test the 200-day MA (at 10,726) at some point over the next couple of months. Anyone who has been sitting on the sidelines for the last couple of months will have been pleased to have missed out on the volatile action, even if the volatility index barely registers it.
Target hit: none
Stop hit: PDLI was hit by its fifth day of selling in a row, including a break of the 50-day MA. The March 9th Breakout play closed for an 8% loss. UBSI hit its stop after three days of selling. The March 20th Subscriber play closed for a 5% loss.
Apr 10th: Although it was another down day, markets were able to hold on to key support, with the possible exemption of the NASDAQ which lost near term 4-week trendline support but held prior reaction highs of 2,333. Volume dropped off Friday's lower levels in all markets, which will likely be the theme for this shortened week. The key thing to watch will be whether large caps reassert dominance over the tech and small cap indices; this was indicate a flight to safety and would not be good news for the bulls as earnings season ramps up. The only other point of note was the bearish cross of the 5-day EMA in the $NASI; supporting the 5-day EMA crossover was a CCI bearish crossover. The indicator at 225 and 205 reaction highs has diverged to the NASDAQ with its 2,333 and 2,375 reaction highs - possibly signaling the start of a more terminal decline. Keep the finger on the Exit button.
Target hit: none
Stop hit: HA gapped down into its stop and below its 50-day MA, as new inter-island (much welcomed!) competition steps into the market. The February 15th and March 16th play closed for a 5% gain and a 12% loss respectively. HIW hit its stop closing below the 50-day MA, following the second day of declines. The February 13th Subscriber play closed for a meager 2% gain. MKSI gapped below a 3-week consolidation and into its raised stop price. The January 19th Subscriber play closed for a 12% gain and the April 7th Breakout play closed for a 4% loss. NCR broke from a tight consolidation on low volume. The stock still has support at $40.32 to look forward too but for my purposes it is a stop hit. The November 22nd Subscriber play closed for a 37% gain, while the February 3rd Breakout play closed for a 9% gain. NNI was another consolidation play which stepped outside of its threshold support. The December 21st and April 5th Breakout plays closed for a 2% gain and a 5% loss respectively. CHUX broke from a consolidation and the 50-day MA, but not before the December 6th play closed for a 19% gain, while the March 30th play closed for a 3% loss. PRW was a Subscriber pick for April 4th, but the play never got off the ground - dropping to its stop for a 7% loss. LCC closed below a rising trendline support to negate the April 7th Subscriber pick; the play closed for a 7% loss.
Apr 8th: Friday's action looked bad on paper if you are a bull. But the various bearish engulfing patterns on the charts occurred on low volume, making the damage look worse than it was. In addition, no key support levels were lost on the day. Still, markets are due a cool off period and now is a good as time as ever for one. Hardest hit was the S&P. This index lies closest to support derived from October and left behind new resistance at 1,310. The correction occurred at the same point of the MACD correction in its bearish divergence (a bearish confirmation signal). Monday will be a fun day for the index. The Russell
2000 was next up in terms of losses, with the 20-day MA (and October support) nearby to lend support. Friday's engulfment covered the previous three days of bullish action. No MACD "sell" signal yet, but there was in the CCI. Market leadership has switched from the Russell
2000 to the NASDAQ. The tech averages [NASDAQ
100 and NASDAQ] were hit by selling in the semiconductor index. The latter index closed below its 20-day MA, but technicals remain firm and congestion around 500 should help drive supporting demand. The NASDAQ sits at a near term support line from March. Technicals are okay and there is still some room to go to reach the 20-day and 50-day MA. The NASDAQ
100 fell short of testing 1,761, but watch for buyers to step up at near term support of 1,700. Finally, the Dow closed below the 20-day MA and pushed away from former broadening wedge resistance. Next week should see a test of October support and the 50-day MA.
What of secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ]? The whipsaw friendly $NAA50 switched back in favor of the bears with a 5-day EMA crossover, but it also cut below a near term support line from March. The remaining two indicators managed light losses, but remain above their respective 5-day EMAs.
Target hit: none
Stop hit: ARNA hit its stop after four weeks of losses. The stock also closed below its 50-day MA earlier during the week. The January Breakout play closed flat. The December 13th Subscriber play closed for a 36% gain. AHT clipped its stop by a penny. The January 23rd Breakout play closed flat, but the February 27th Breakout play closed for a 5% loss. CELG suffered the second day of heavier losses, hitting its stop and closing below the 50-day MA. The stock featured as a Breakout for December 30th, February 23rd, February 27th, and March 16th; each play closed for a 19% gain, 7% gain, 4% gain, and a 6% loss respectively. PR featured as a Breakout for February 13th, February 28th and March 30th, each play closed for a 13% gain, 4% gain, and a 2% loss. ED was an oversold Subscriber play from April 5th which hit its stop price for a 1% loss. XGM woes continued to pressure this value play. The March 10th Subscriber play closed for a 6% loss.
Apr 6th: The NASDAQ
100 followed through on yesterday's gains with assistance from the semiconductor index. The former index stepped ever closer to 1,761 resistance, as the latter closed above its 20-day MA and started to outperform the NASDAQ
100. The NASDAQ wasn't able to post the same level of gains, instead it churned on higher volume. The Dow spent another day knocking around resistance on lower volume, much like the S&P lingered at support/resistance of 1,310. The Russell
2000 closed flat on the day, but is at risk from been superceded by the Tech averages in the role of leadership. Secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ] posted gains, leaving things unchanged from before.
Target hit: none
Stop hit: GISX hit its new higher stop as a larger pullback unfolds. The March 31st Breakout play closed flat. LMNX was another stock to extend a pullback. The stock was able to close on the 50-day MA, but for my purposes, it is a stop hit. The stock featured as a Breakout for December 29th and March 30th. The former play closed for a 17% gain, the latter a 9% loss. MEDI was a Subscriber pick from March 30th. Price closed below its stop price for a 5% loss.
Apr 5th: Tech markets emerged from the last few days of quiet action with some decent gains. Best of the Tech markets was the NASDAQ
100 as it gapped from recent congestion, helped by a strong semiconductor index. The semiconductor index not only pushed past the 20-day MA, it also negated the bearish divergence in the CCI, and triggered a bullish crossover in the +DI/-DI. The NASDAQ continued its run of gains, on slightly lighter volume than Tuesdays, negating the earlier bearish divergence. Although Tech had a good day, it remains a market at overbought conditions. The secondary indicators are a mixed bag. The $NAA50 is back above its 5-day EMA, but it has yet to shake the bearish divergence between the downward trend in this indicator, and the rally in the parent NASDAQ; when fewer stocks carry a rally it is best to be watching from the sidelines. The $BPCOMPQ closed at new reaction highs, and this indicator provides the best chance for the bulls; it still has some 10 points to run to reach a top, and this could translate to a rally lasting 4-5 months. The same stands for its S&P counterpart, the $BPSPX. The $NASI is net neutral; it continues a solid uptrend and is some 300 points away from a typical topping zone (so it could buy the current rally another month or two), but has yet to break to new near term highs like the $BPCOMPQ.
The large caps were not excluded from the action. The S&P broke to new highs on higher volume, making 1,310 a new support level. The Dow stalled at resistance of the former broadening wedge. Volume was disappointing, as it has been for the last few days, but the rotation from safety into more speculative tech could be a mixed blessing; speculation at this stage of a rally (versus a bottom) is a sign of greed. Still top dog of ths indices is the Russell
2000. Its ADX line has crossed above 20 - the usual threshold for a measurable rally and other than the bearish divergence in the CCI it remains technically firm. Limit putting new money to work, but continue to ride existing positions until they are naturally stopped out or reach their target prices.
Target hit: none
Stop hit: CMX was a Subscriber pick for today which suffered a volatile day to hit its stop for a 3% loss.
Apr 4th: Markets continue to struggle in choosing one road over another. Although volume climbed above previous the days trading, it still remained below average and on-balance-volume has remained flat in every index over the last 3 months; nobody is accumulating at these levels and market gains should be viewed with a contrarians' eye. Best index on the day was the S&P; its 8 point gain helped push it away from 1,294 support. Unfortunately, the gain was insufficient to break the MACD bearish divergence. The NASDAQ and NASDAQ
100 followed with smaller gains, but on heavier volume. Technicals continued to advance in support of the tech rally. The Dow managed a relief bounce to push the index above the 20-day MA, but volume was truly insipid. The Russell
2000 maintained its advance, without doing anything spectacular. Not a time to be putting new money to work, but today will have helped add a little more profit to existing positions.
Target hit: TGC hit its target in the space of a few days. The March 29th play closed for a 54% gain.
Stop hit: ONCY hit its stop after the presentation of a phase I trial results knocked the stock down 12%. The March 6th play closed for a 11% loss. DITC suffered its second day of selling to cleanly cut through its stop. The March 23rd Subscriber play closed for a 11% loss.
Apr 3rd: A mixed bag of action for the markets. The NASDAQ ended the day with a bearish engulfing pattern on higher volume, at overbought slow stochastics - not a good set up to have if you are a bull. The NASDAQ
100 was less affected by the weakness, helped in part by early strength in the semiconductor index and near term support. The semiconductor index promised much, but delivered little. The 20-day MA held as resistance after earlier gains above this average failed to hold; the CCI of this index is now trading close to resistance, as the MACD maps a weak bounce, well below the bullish zero line. The S&P dallied above 1,294 support (and the 20-day MA), trading in above average volume. This index could go either way - the October support line will be key in this regard. Same goes for the Dow, although it has a little more room to maneuver to reach October support. Technically, neither large cap index is in great shape, with the bearish divergence in their respective MACDs dominant. Price will always lead - but any breakout in price will need a confirmation break in the MACD bearish divergences.
Target hit: MINI hit its target for a 16% gain. The stock was a Subscriber pick for February 16th.
Stop hit: LB featured as a Subscriber pick for February 8th. The stock rallied into its stop after an earlier gap down. The stock closed for a 2% loss.
Model fundamental portfolio: CTCH stop hit.
Apr 2nd: Another day of listless trading as markets prepared for their next move. Large caps were again hardest hit; the Dow shedding another 41 points on heavier volume (= technical distribution); the S&P closed right on support of 1,294 and the 20-day MA. Unlike the Dow, the S&P losses occurred on low volume. The tech averages escaped relative unscathed; the NASDAQ traded down a point on light volume as technicals continued to improve; the NASDAQ
100 created a bearish engulfing pattern on light volume (but at overbought slow stochastics, so this needs to be watched), just above near term support. The semiconductor index completed its bounce to the 20-day MA and is back looking at the 200-day MA for future support. The Russell
2000 inched up a couple of points, maintaining its leadership role. The markets remained aligned in bullish mode with small caps leading techs leading large caps. Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] powered to new reaction highs which should bode well in the near term, although I remain skeptical about this being a rally of substance; if putting money to work, don't overexpose yourself. In my Collective2 portfolio I have added a couple of stocks to replace recent executed trades.
Target hit: MERX gapped up above its Target price. The February 10th play closed for a 57% gain.
Stop hit: KKD was a stop hit for the long trade from March 8th. The Subscriber trade from March 30th is still in play. The long play closed for a 15% gain.
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