What a Week In the Markets!
Recently I was asked, if I could read the Investors Business Daily (IBD) once a week, which day would I pick to read? What day would you pick?
If you can only read the IBD once a week, I suggest that you get the weekend edition. Why? The weekend edition gives you the summary of everything that happened during the week. When you look at the charts, you are seeing how stocks closed for the week. It's like the difference between a daily and weekly chart. By the end of each week, you see how every stock reacted to the market and how any news affected your stock or industry group. Notice in this SPY chart how 4 indicators alerted us of the pending selloff on August 20 and 21. Time to get out of the markets. We recently received indications that it was time to move back into the markets. Did you notice these signals and take appropriate actions?
So, what happened in the market this past week? The leading index this week was the S&P 600 with a 5.1% gain. Small stocks had been had been underperforming until last week's reversal. Like the IBD Mutual Fund Index, the S&P 600 carved out a "W" pattern. In and of itself, that is not "actionable" information, but it does indicate that support came into the index. If you look at the Russell 2000 ETF (IWM), there was a heavy volume reversal day on October 2.
If you are interested in researching charts from prior market bottoms and sometimes at the bottom of a market decline, you often see a "reversal day". You may notice that October 2 was not the low of this most recent move down, but it did test the September 29 low and then rallied strongly.
Here are some excellent examples of weekly reversal lows for additional research:
March 14, 2003 March 13, 2009 October 17, 2014
Now with the market in an uptrend, watch how the Nasdaq or any ETF's that you own are acting at or around the 10 day moving average. For a quick reference, look at the above examples how after a follow-through day they responded near that moving average. I would also encourage you to once again check out September 1, 2010 and you will see how the Nasdaq and the S&P 500 marched right up to the 10 day moving average line.
We are still in the early stage of this new uptrend and it's holding nicely above the 10 day moving average line and recent breakouts continue to act well. So far so good!
However, I encourage you to be cautious as we continue to move higher; we could have a pullback at any time.
Have a profitable week.
Recently I was asked, if I could read the Investors Business Daily (IBD) once a week, which day would I pick to read? What day would you pick?
If you can only read the IBD once a week, I suggest that you get the weekend edition. Why? The weekend edition gives you the summary of everything that happened during the week. When you look at the charts, you are seeing how stocks closed for the week. It's like the difference between a daily and weekly chart. By the end of each week, you see how every stock reacted to the market and how any news affected your stock or industry group. Notice in this SPY chart how 4 indicators alerted us of the pending selloff on August 20 and 21. Time to get out of the markets. We recently received indications that it was time to move back into the markets. Did you notice these signals and take appropriate actions?
So, what happened in the market this past week? The leading index this week was the S&P 600 with a 5.1% gain. Small stocks had been had been underperforming until last week's reversal. Like the IBD Mutual Fund Index, the S&P 600 carved out a "W" pattern. In and of itself, that is not "actionable" information, but it does indicate that support came into the index. If you look at the Russell 2000 ETF (IWM), there was a heavy volume reversal day on October 2.
If you are interested in researching charts from prior market bottoms and sometimes at the bottom of a market decline, you often see a "reversal day". You may notice that October 2 was not the low of this most recent move down, but it did test the September 29 low and then rallied strongly.
Here are some excellent examples of weekly reversal lows for additional research:
March 14, 2003 March 13, 2009 October 17, 2014
Now with the market in an uptrend, watch how the Nasdaq or any ETF's that you own are acting at or around the 10 day moving average. For a quick reference, look at the above examples how after a follow-through day they responded near that moving average. I would also encourage you to once again check out September 1, 2010 and you will see how the Nasdaq and the S&P 500 marched right up to the 10 day moving average line.
We are still in the early stage of this new uptrend and it's holding nicely above the 10 day moving average line and recent breakouts continue to act well. So far so good!
However, I encourage you to be cautious as we continue to move higher; we could have a pullback at any time.
Have a profitable week.
RSS Feed