BlueWolf’s Weekly Market Sentiment (New and Improved with Better Flavor!)

[Louetta]

Several of the stocks on my December list were stocks in which I already had a position, but to which I was adding. Since they were on my buy list at the time, I wrote them up. On this new list, there are several stocks that I owned prior to posting my December list to which I did not add. That’s why they didn’t get written up.

I will be happy to do write-ups on the new ones, specifically ABMD, PANW, TREX, and TTWO. A couple of cautionary notes on biotech/pharma stocks. They can be unusually volatile, making huge jumps in a single day. I also go into many of them knowing I will need a lot of patience, i.e. EDIT and CRSP. BTW, I forgot to add CRSP to my list. I am very interested in that stock.

Right. I now see those listed as recently as June 7 in the long-term thread.

[BlueWolf]

Market sentiment for the week ending September 20, 2019

Market sentiment for the week ending September 20, 2019

Short Term Bias:Bullish
Long Term Bias: Neutral

I have included an annotated daily chart for the NASDAQ. The S&P and Dow are similar, with a few differences that I will mention below.

We got some nice upward movement in the middle of the week, and the index then went into a mini consolidation. There were a couple of topping tails in the week’s last two bars, but the consolidation itself it occurring at the high of Wednesday’s bar, which leaves me modestly bullish for the short term.

For the long term, I am weighing several factors that leave me with a neutral, or wait and see, bias. For starters, the indices all retraced to the 62% Fibonacci level (The Dow actually retraced slightly deeper). That’s about the maximum depth you would expect for any kind of bullish trend. Retracing that deeply adds some doubt about continued long term bullishness. I am still also waiting for the market to make new highs to confirm that the long term bullish trends are intact. The Dow and S&P are teasing new highs, hovering right at the prior pivot. The NASDAQ, on the other hand, is hovering slightly below the prior pivot, having a little more ground to make up before it can break out to a new high.

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/q84wda1eig...%20AM.jpg?dl=0

Here are a few stocks I will be watching for day and swing trading opportunities at the start the week:
Longs: BERY, BLDP, LK
Shorts: SIX, TPR

Good luck with your trading and investing.

[Louetta]

Some folks are taking heart in the improvement recently of the Russell 2000. It was 15% off it's all-time high on 8/27 (S&P was 5% off) and is now only 8% off the high. In theory this means the rally is broadening out and is not confined to just a few of the usual suspects.

[BlueWolf]

Some folks are taking heart in the improvement recently of the Russell 2000. It was 15% off it's all-time high on 8/27 (S&P was 5% off) and is now only 8% off the high. In theory this means the rally is broadening out and is not confined to just a few of the usual suspects.

I certainly hope so. I stuck my neck out on some pretty slim evidence. The NASDAQ pretty soundly broke out to the upside from its consolidation, but I’m not seeing a lot of follow through. There just aren’t a whole lot of signs to make me feel all that confident that another bull rally is coming. Then again, I’m not seeing anything that tells me a major rollover is coming either. It just seems indecisive. I have noticed a couple of things lately, for what they’re worth. A lot of money rolled out of out gold stocks this week. Not sure where it went, although funds are continuing to flow into money market funds, which suggests that at least some investors are parking their money for now. Gold stocks recently made quite a nice run, so I wouldn’t blame anybody for taking profits. I guess I wish I had a crystal ball. Hey, maybe I can order one from Amazon!

[BlueWolf]

Start of week update:
Short Term Bias: Bearish
Long Term Bias: Neutral

Well, because of the Saudi oil facility attack, I am changing my short term bias to bearish. Futures are down this morning, so I’m sure the market is going to get pummeled. There may be some bullish plays in oil stocks today, although I’ll have to deal with gaps up.

[BlueWolf]

I’m going to start using the Wilshire 5000 instead of the NASDAQ as my main market indicator. The DOW is too narrow with only 30 stocks and often diverges from the other indices because of the disproportionate (from the overall market) effect one member stock can have. The S&P is a little better with 500 stocks, but still represents less than 10% of the overall market. The NASDAQ is the broadest based of the three with around 3,300 stocks, but it is definitely slanted towards tech. The Wilshire 5000 is both broad based and diverse, so it seems like a better exemplar.

[Louetta]

Start of week update:
Short Term Bias: Bearish
Long Term Bias: Neutral

Well, because of the Saudi oil facility attack, I am changing my short term bias to bearish. Futures are down this morning, so I’m sure the market is going to get pummeled. There may be some bullish plays in oil stocks today, although I’ll have to deal with gaps up.

It's interesting tho. Your stuff seems to be doing well today even with the NASDAQ still down .3%. MDB SFIX VEEV PANW RVLV TTWO all up 3-5% today. I was following it because Bob Pisani on CNBC has been tracking what he says is a rotation out of growth into value but I don't see it today (and he didn't mention it).

[BlueWolf]

Sorry to be a flip-floppier, but I just realized that the Wilshire 5000 is a weighted index. I don’t want to use a weighted index for technical analysis so I’m going to continue to use the NASDAQ as the primary with the S&P and the Dow as backup.

[BlueWolf]

Market sentiment for the week ending September 27, 2019

Market sentiment for the week ending September 27, 2019

Short Term Bias:Neutral
Long Term Bias: Neutral

I have included an annotated daily chart for the NASDAQ. The S&P and Dow are similar, with a few differences that I will mention below.

After the modest upward movement of last week, the market stalled again and is in another mini consolidation. It looks a bit like a rising wedge, which is worrisome because this is a bearish pattern. There are both topping and bottoming tails inside the pattern, so that doesn’t give us much help in trying to assess what is going on. Whatever the case, I’m ambivalent and my short term bias is neutral.

The S&P and Dow are following similar paths to the NASDAQ, although both of these indices are consolidating right at their prior highs, while the NASDAQ has a little distance to travel in order to mount an attack. In the NASDAQ and S&P, the 20 day SMA looks like it is trying to cross up over the 50 day SMA, which would be a bullish sign. In the DOW, it already has. The last two times the 20 day SMA crossed up, the indices made significant gains before correcting. Despite this pending bullish sign, all this consolidation and hesitation has made me nervous about my re-entry into the market. I was hoping that the market would have made a new high by now and was heading higher. Even if the market does take out its prior high, I can’t help but wonder if it will have enough gas in the tank to continue climbing. At the very least, the long term bullish trend that started back in December of 2018 could be in jeopardy. In the very worst case, the 10 year bull market could be nearing its end. I am still having a hard time seeing the signs of a recession, so I am not sure I believe the latter, but things can change in a hurry and we do have some pressure points building with the trade negotiations with China not going well and the threat of armed conflict with Iran looming. All this leaves me with a long term neutral bias despite my vested interest in the market continuing to be bullish, at least for a little while longer. In the end, I have to manage my investments based on what the market actually does and not what I want the market to do.

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/pujtg3s18m...%20PM.jpg?dl=0

Here are a few stocks I will be watching for day and swing trading opportunities at the start the week, including a few bottom feeders:
Longs: ALEC, CARB, LVGO, WW (I’d be looking to short term trade ESNT too if I weren’t already in it).
Shorts: DBD, OSTK, TLRY (Man, I’ve made a lot of money shorting this stock), WDC

Good luck with your trading and investing.

[BlueWolf]

Sorry, no update this week due to some health issues. Suffice it to say that I have become moderately bearish again. If I have time, I’ll do a mid-week update.

[BlueWolf]

Mid Week Update for the week ending October 4, 2019

Mid Week Update for the week ending October 4, 2019.

Short Term Bias:Bearish
Long Term Bias: Neutral (Leaning Bearish)

I have included an annotated daily chart for the NASDAQ. The S&P and Dow are similar, with a small difference that I will mention below.

What a difference a week makes. The biggest news is that the indices all rolled over and formed a lower pivot high, i.e. they did not take out the prior high before pivoting. This breaks the December-August bullish long term trend. The big question is where do we go from here? Technically, we have not formed a lower pivot low yet, so there is the slim hope for the bulls that the current correction bottomed out in early August and is trending back up from here. I wouldn’t count on it, though. BTW, the S&P and Dow are following similar paths to the NASDAQ, with the minor difference being that they pivoted much closer to their highs.

All of this leaves me in a precarious position. I am heavily reinvested in the market, so do I take the losses and exit from all of my current round of investments, do I just thin out my positions, or do I ride this out intact? I still believe in the long term prospects of all the companies I invested in and I believe they will pay off 3 to 10 years out, but I hate draw downs. My inclination is to cut and run, but I’m still on the fence with my hand hovering over the “nuke” button. God how I wish I hadn’t re-entered. I exited at just the right time, locked in big profits, and then re-entered most of my position at lower entry points. Then I watched in horror as the markets went from bad to worse. Ugh. I still have a little investment capital to work with and I have my day/swinging trading account, so I’m not totally sidelined, but I’m going to have to be creative with option plays, shorts, and international investments to make money if we really are headed into bear territory. I can at least cover some of my draw down by some clever shorting. Maybe it’s time to switch over to my “Technical Trades Anyone” thread instead of the “Stocks For The Long Term” thread, although I can still add some write ups to the later thread.

The only good overall advice I have to offer right now is don’t enter any long positions right now unless you really believe in the company. At the very least, I’d recommend buy and hold bulls keep most of their powder dry (at least 75% in cash), wait for a bottom, and buy on the way up (you don’t have to call an exact bottom).

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/eoga5zdvo3...%20PM.jpg?dl=0

Good luck with your trading and investing.

[riverbabe]

BW, thank you for your always cogent and welcome advice. I have resisted trading for quite some time now, as I am tying up some loose ends in my slightly chaotic (not Trumpian!) life. Changing brokers also supplies logistical problems as well (mostly involving correct POA papers and hold-ups in transferring of positions and cash). Have been following you closely all the same. Thank you again.

[Louetta]

BW, thank you for your always cogent and welcome advice. I have resisted trading for quite some time now, as I am tying up some loose ends in my slightly chaotic (not Trumpian!) life. Changing brokers also supplies logistical problems as well (mostly involving correct POA papers and hold-ups in transferring of positions and cash). Have been following you closely all the same. Thank you again.

BlueWolf, how about some downside protection with puts or shorting some relevant index rather than actually selling?

[BlueWolf]

BW, thank you for your always cogent and welcome advice. I have resisted trading for quite some time now, as I am tying up some loose ends in my slightly chaotic (not Trumpian!) life. Changing brokers also supplies logistical problems as well (mostly involving correct POA papers and hold-ups in transferring of positions and cash). Have been following you closely all the same. Thank you again.

Thank you, Riverbabe. I appreciate the kind words, and I’m glad if I can help if only in some small way.

[BlueWolf]

BlueWolf, how about some downside protection with puts or shorting some relevant index rather than actually selling?

I’ve though about that Louetta. I’m not a big fan of protective puts, but in this case, if I stumbled my way into a prolonged bear market, I might have to at least consider them. I’ll have to look at the costs, though. I like the idea of shorting the indices better, and I probably will do that if the inflection points signal that the market is headed for a big leg down. If this is a prolonged bear market, however, one thing I definitely be doing is shorting equities straight up, maybe even some of the very stocks I own in my long term account (in a different account obviously). We’ll just have to see what’s up. There are a number of economic indicators coming out this week still, and earnings season is still a month away.