NASDAQ 100 closes at an 11 year high; GOOG closes down big in after-hours trading
January 20, 2012 | Comments Off
Positive news for the job market as jobless claims fell hard, but it was the NASDAQ 100 closing at an 11 year high that stole the show. Yes, it is positive claims almost broke through the -300,000 level and the market certainly liked the figure. Even a slightly negative Philly Fed survey couldn’t hold back buyers from scooping up shares throughout much of the day. Volume on the NASDAQ rose again, but once again over on the S&P 500 volume fell. The S&P 500 continued its “wedge” higher as the NASDAQ remains the leading index.
The number of bulls pulled back from last week’s high, but bulls registered at 47%. Bears were able to climb back above 20%, but they didn’t make a big stand. The II survey continues to be bullish, but well off the extremes we witnessed early this year. I wouldn’t consider this market at an extreme level as far as sentiment is concerned. And with the amount of stocks we continue to find popping up this rally should have legs to run for quite some time. Again, we may see a shakeout here and there it won’t derail the rally currently underway.
Every rally will trick traders/investors to chase stocks at highs only to see the stock reverse and shaking them out. It is best to have a sound approach to buying and chasing stocks SHOULD NOT be a part of the approach. Just as important is money management, knowing how much to buy, cut losses, and exit a position is paramount. Without these tools you will be left behind.
Stocks Close Higher Again above October Highs
January 19, 2012 | Comments Off
Another stellar day for the bulls as stocks rose across the board. The S&P 500 closed higher for the 10th time in 13 sessions but volume fell on the index. For the NASDAQ composite the index closed higher with higher volume and it was above average. Clearly the NASDAQ is the leading index of this current rally a sign we’d like to see. Given the run up as of late, it is hard to continue to knock the ball out of the park each and every day. Use the opportunity to cut laggards and stay on your winners. Today was just another solid day in this uptrend.
The market really got going with a big jump in home builder confidence. Finally, after so long we are beginning to see an uptick in confidence from homebuilders. It remains to be seen whether or not this translates into success, but the way homebuilders are acting higher prices are ahead. Banks were helped out as well, with an improving real estate market the situation should translate well for the “toxic” assets banks continue to hold. Let’s not forget the Federal Reserve holds quite a bit of mortgage paper and continued improvement in the real estate market will surely help the quality of paper held on the Fed’s balance sheet. It all boils down to price and volume and it is positive.
I am still looking forward to seeing Sentiment indicators tomorrow. Most notably the AAII survey as it has been quite bullish for the past two weeks. Bears have been decimated below 20% and you have to wonder if this market will have a quick washout to get the weak bulls out of their positions. This would be an ideal situation for us as it will show who the true leaders are in this rally. It would then allow us to focus in on the very best and take advantage of a new rally. Sentiment is an imperfect indicator and usually works best at REAL extremes. I highly doubt we are at one now, but we are at a point where it’d be nice to shake out some weak bulls then proceed with this nice rally. Remember October of 2010 and November of 2010? Quick shakeouts only to have us lead higher. Don’t be easily shaken out, follow the game plan.
Rally Fizzles as Volume ends Mixed; NASDAQ gains but well off the highs of the Session
January 18, 2012 | Comments Off
The morning started off great for stocks, but the day’s gains were unable to grow. Fresh off a long weekend it appeared overseas markets were brushing off S&P’s downgrade of 9 Euro nations. Little ground was covered for much of the session as the market traded within a relatively small range. A few stocks broke out including MSFT and PNRA. PNRA held onto most of its gains MSFT could not. The days action really boiled down to stalling action on the NASDAQ. In of itself, today isn’t that bad, but over the next few days looking out for distribution will be a key indication if this market can power forward over the next few weeks.
Today’s market action isn’t a glaring sell indication, but it does just raise a simple flag that the market may be acting a bit tired. We have plenty of stocks underneath setting up and looking solid. This doesn’t mean we automatically blast higher, but it does help our chances over the next few weeks/months for this market to set up for gains. For now, it appears the general market has been able to shrug off the negative news pouring out of Europe as of late. I should mention at the end of February Greece is set to default again. Don’t fret, have a game plan and execute it with precision. Big Wave Trading has a plan and we’ll continue to execute.
Bullishness continues as Stocks muster out gains again, but volume ends lower
January 13, 2012 | Comments Off
Despite posting gains the S&P 500 and NASDAQ volume ended lower on the day. Despite the positive price action volume didn’t jump along with the move. While this isn’t a major red flag, it is something to watch for over the next few trading days. Commodities reversed on the day lead by natural gas and crude oil. Crude oil broke below the century mark a key psychological area and will be interesting to watch to see if the reversal morphs into a downtrend. Another good day in the market, we continue to see positive signs for this uptrend to continue higher.
At some point the market will pull back and consolidate its gains. One thing to keep in mind is when the market does consolidate its gains, it is how it does so that matters. A few things to look out for are the obvious distribution and stalling days. These are signs the current rally may be coming under some selling pressure and we are at risk of further downside. It is okay to have a few distribution days here and there, but when strung together it is a red flag for the market. Cutting laggards in your portfolio is a MUST! Be on the lookout for possible signs of this market coming under pressure and act accordingly.
Bullishness has gotten to some frothy levels over at the AAII survey. Bulls were more than 49% of the survey while the bears were a measly 17%! Quite the gap between bullish and bearish outlook from AAII survey respondents and it is the second week in a row the Bulls are a shade below the 50% mark. The II survey has bulls more than 50% at 51.1%, but off the highs we say earlier in the year. Bears are scarce at 21%, but well above the 15% low set earlier this year. Market participants are quite bullish for 2012, it wouldn’t come as a surprise the market over the next few weeks tries to shake out the weak bulls.
Market closes mixed with declining volume
January 12, 2012 | Comments Off
The NASDAQ closed higher for the 6th time out of 7 days as volume continues to remain above average. Today appeared on the onset it would be a day of consolidation, but the NASDAQ would have none of that. While volume remains above average for the NASDAQ the S&P 500 continues to remain below the key volume moving average. A sign Institutions are more interested in NASDAQ composite stocks than the S&P 500. A pull back is certainly in the cards and would be a welcome sign to consolidate the recent gains. However, our trend remains up and until this situation changes we are positioned accordingly.
Tomorrow we get a bit of economic data in the morning and it will be all about retail sales figures. Forecasts are for sales to jump .20% and I wonder to myself: “do economists ever get anything right?” They don’t, it is meaningless to position yourself based upon a hunch or opinion. NO ONE knows the future we only know what we know up to a point. Sure, fiat money has an average shelf life of 35 years, but it doesn’t mean the US Dollar has to end (in one form or another) 35 years to the date Nixon took us off the gold standard. The moral of the story: price and volume tell the story you want to be listening to; follow it!
Semi-Conductor and Financial stocks lead market higher
January 10, 2012 | Comments Off
Volume jumped on the day, but price gains weren’t hefty. Financial stocks continued to play nice in the sand box with BAC helping out the Dow Jones Industrial average. Semi-Conductor stocks got a boost from an upgrade as INTC lead the way. On the flip side, GOOG and AMZN were hit pretty hard with heavy selling in GOOG hard after a solid run up. Despite these two large cap technology stocks underneath the market appears to have what it takes to push higher, but as a whole with volume and little price movement does put up a caution flag. While there may be caution in the wind it does appear there is enough leadership to push this market higher.
We certainly want to see better price gains when we have the volume above average. The NASDAQ got support at the two hundred day moving average today a positive sign. Just after 11 o’clock things weren’t looking too good for the NASDAQ and the market as a whole. Support did show up, but the market was unable to stack on the gains. The late day sell off wasn’t severe, but it was telling the market may be in for a pull back to consolidate the recent gains. We’ll watch for major distribution and if the market can consolidate over the 200 day moving average.
Indexes Don’t do Much Today But Underneath There Was A Ton Of Action
January 10, 2012 | Comments Off
I am not sure if MarketSpeculator is writing commentary tonight or not. He has suffered a very sad situation involving his beloved dog. Our hearts go out to him during this sad time. I am fully margined long and continue to have tons of system buy signals all over the place during the past three days. Any new long positions will be small due to being maxed out. Basically we will cut the losses on the stocks we are wrong on and move that bad money to good money with stocks/ETFs that continue to break out. Oil/gas and Medical both look to be the strongest sectors in the market. With Medical being the strongest. TONS of buy signals. Will they work? Nobody knows the future. Just take the historical backtested signals.
NASDAQ climbs above its 200 day moving average with volume to boot
January 6, 2012 | Comments Off
Big Wave Trading model goes to buy signal, find what stocks to go long by signing up here
Bank of America (BAC) lead way with a hefty price gains boosting the entire banking sector. Semi-conductor stocks don’t appear to be that far behind with Intel (INTC) leading the way. The day did not start off too well for stocks, but with the Dow taking the brunt of the selling. Volume ran high throughout the day indicating institutions were involved. Steady buying after the morning sell-off with the NASDAQ leading helped elevate the entire market. Today’s move was a good strong move for the stock market. Now, we’ll need to see market leadership expand.
Today was the first real clear indication of accumulation in quite some time. Take away options expiry and end of the month rebalancing we have yet to have a real indication from institutions they are buyers. Today, we got a glimpse there was some buying today amongst institutions a sign we have been waiting for. Now, can we get through tomorrow’s job’s report?
The Stock Market Closes Flat as volume perks up on the NASDAQ
January 5, 2012 | Comments Off
Volume remains below average a sticky point as it signals a lack of confidence from big institutional investors. Perhaps large outflows of equity funds are to blame, but there are a variety of factors none of which matters to us. Volume will matter and at some point will catch up to this market, but the day’s action was quite nice. For once we didn’t have a wild end of day move nor did we see massive losses or gains disappear in a matter of minutes. One thing is for sure, if we do breakout to either side volume will be a big tell if the move will last.
In our chat room today we talked about the divergence in NYSE short interest versus the current sentiment indexes. AAII is tracking bullishness at 40% while the II survey shows bulls above 50%! How can the NYSE short interest ratio be at 16.22%? Makes us wonder, logically it doesn’t fit well, but the market will surely give us the signal and finally answer this mystery! I wouldn’t try to figure it out either, rationalizing one side or the other will only eventually have you miss a big move. For now, it does appear the market is looking to breakout it is on us to be prepared.
Short interest is high and the NASDAQ is sitting in a precarious position. The 200 day moving average (dma) continues to be a thorn in the side of the NASDAQ’s back. It has been unable to pierce the moving average since the first of November. The lack of thrust and ability to consolidate above the moving average is somewhat troublesome. It can be fixed in an instance if the volume surges and prices follows-through to the upside. It is anyone’s guess and our bottom line is we need to be prepared for whatever the market will throw at us. Don’t guess, it’s a fools game.
Stocks Close with Big Gains, but Close Off the Highs of the Session
January 4, 2012 | Comments Off
The party started off early as optimism was spewing from the talking heads at CNBC and the majority of the financial news media. Why not, it’s a New Year and a new outlook on what is ahead in 2012! Mr NASDAQ led the major indexes today, but failed to see volume above average. Sure volume can come in later, but it didn’t appear institutions were willing to buy up stock hand over fist. There were quite a number of negative reversals in leading stocks while the bottom of the pile was pushing the market up. Financial stocks continue to appear to be bottoming out, but it will take much more than a few names to turn this into a sustainable rally.
It is certainly a huge positive for the market to see banks rallying. I have mentioned a few names, but ones like WFC and PNC are really shaping up nicely. They are forming right sides of bases now, the run ups. Typically, it is important for stocks to run 20% and settle into a nice consolidation period before running higher again. The best gains come from stocks that undergo consolidation patterns and breakout from those solid patterns. We need to be patient and let the market come to us and allow the breakouts occur.
-
Recent Posts
- Stocks Fall Again As FOMC Meeting Minutes Fail to Inspire
- Surprise Greece unable to form Government Sending Stocks Lower
- Stocks Sink as the European Breakup Fears Grow
- Big Wave Trading Portfolio Update And Top Current Holdings
- CSCO and PCLN Weigh on the NASDAQ as Stocks Stage a Lackluster Session
