Douglas Gammons Blog | Talkmarkets | Page 1
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Retired software engineer turned writer/investor and owner of HeadlineCharts. I am not a registered investment advisor. My comments reflect my view of the market, and what I am doing with my accounts. The analysis is not a ... more

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Slow Down On Buy Button
This short-term trend is at the top of the range so it is time to slow down on the buy button.
Good Signal Of Short-Term Uptrend
This most recent signal of a short-term uptrend was a good one. The uptrend appeared on March 29, and then the next day the PMO ticked up to confirm.
New Short-Term Trend In View?
A new short-term uptrend may have started on Friday, and shows an index that looks to me like it wants to break higher. These bullish percents ticked up on Friday after hinting at a reversal higher on Thursday.
Short-Term Downtrend In A Choppy Market
It's a short-term downtrend in a choppy market where a trend is difficult to define. I am a trend-trader, and in this type of market I like to step towards the sidelines. I'll be quick to sell, slow to buy.
Sector Strength - Saturday, Feb. 2
Bonds are still way outperforming stocks, the small caps are under-performing, and the defensive groups are the leaders while the cyclicals lag.
Sector Strength - Sunday, Jan. 27
A bit of strength is showing for the mid and small caps which is a good sign, but small cap stocks need to improve much more. Bonds are still highly favored over stocks in general. The alignment is generally negative for the general stock market.
HeadlineCharts - Saturday January 26, 2019
One day last week I posted that it was time to start looking for signs of the next short-term downtrend. However, since thMore later...
Short-Term Trend
It was bad day in the stock market, but the PMO Index didn't budge. So, it is too early to declare a new short-term downtrend. Besides, the market has been on a good run higher, and was probably ready for some selling.
Some Sector Strength Returns
Despite some strength in stocks, the market continues to show a bearish alignment with TLT ahead of the pack, and with the Small Caps and Transports as laggards. If and when the market resumes a longer-term uptrend, these positions will be reversed.
Charts: Short-Term Trends, Longer-Term Outlook
The six major indexes are now all above their 50-day averages. That's a show of strength. But even though the market backdrop has a improved a bit, let's not forget about the technical signals that warn us there are problems in the market.
The Longer-Term Outlook
Because the news cycle is improving while stocks are dramatically oversold, we have the potential for a decent medium-term rally. And then there is the much improving M2 money supply which should also provide a nice boost to stocks.
No Reason Yet To Get Bullish
An uptrend that is going to exceed the short-term requires a number of new 52-week highs, so there is no reason yet to get bullish. But the lack of new lows is certainly important good news.
Long-Term Outlook Negative
The long-term outlook is negative and continues to weaken. Just how weak is this market? Are we just in a soft patch or is a big downside move brewing? Here are my best guesses.
The Short-Term Trend Is Strong
It's a short-term uptrend. Strong uptrends often are characterized by weak opens, strong closes, such as Friday. However, and this is a big deal, the number of new 52-week lows is elevated, and in addition, they increased from the previous day.
The Bullish Short-Term Trend
The short-term trend is difficult to determine during these periods of market stress. Also, the days leading into Thanksgiving are seasonally favorable for stock prices
EC Short Term Trend Is Trapped
The short-term uptrend is trapped inside a larger medium-term downtrend. As a result, the short-term uptrend can only reach up so far before it is met with selling. I think this is what happened to the market on Friday.
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