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

[BlueWolf]

Market sentiment for week ending January 17, 2020

Market sentiment for week ending January 17, 2020

Short Term Bias: Bullish (A little bearish on an uber short timeframe)
Long Term Bias: Bullish

I have included an annotated daily chart for the NASDAQ. The S&P and DOW are showing similar patterns at this time.

There is nothing really new to report this week. All three indices are showing remarkable strength as they continue their relentless assault on new highs.

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/ph5wquynfz...%20AM.jpg?dl=0

I didn’t see much in the way of long day or swing trade setups this week, probably because so many stocks are extended to the upside. I am still seeing quite a few short setups, but these need to be played with the tide. Here are a few stocks I will be watching at the start of the week.
Longs: BYND
Shorts: AMRN, BWA, SMPL

Good luck with your trading and investing.

[BlueWolf]

Market sentiment for week ending January 24, 2020

Market sentiment for week ending January 24, 2020

Short Term Bias: Bullish
Long Term Bias: Bullish

I have included an annotated daily chart for the NASDAQ. The S&P and DOW are showing similar patterns at this time.

The continued strength of the market continues to amaze me, and there simply aren’t any signs things are slowing down. There will be a correction, and it will be brutal, but until I see signs, I am just going to continue to ride the wave of bullishness that is lifting the market and trade into strength.

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/xehgd9ceaj...%20PM.jpg?dl=0

I was hoping I would see more short setups so I would be prepared to ride any sort of pullback, but they just weren’t there. I did find a number of long setups I liked. They are mostly strong stocks, but I like trading strong stocks into a strong market. Here are the stocks I will be watching at the start of the week for day and swing trading opportunities.
Longs: ATVI, CCXI, FRPT, KRTX, MAXR, MBOT, QGEN
Shorts: CVNA

Good luck with your trading and investing.

[BlueWolf]

Market sentiment for week ending January 31, 2020

Market sentiment for week ending January 31, 2020

Short Term Bias: Neutral
Long Term Bias: Bullish

I have included an annotated daily chart for the Dow this week instead of the NASDAQ because I wanted volume bars. The NASDAQ and S&P are showing similar patterns to the Dow at this time.

We had a little bit of a down week that ended with a bearish engulfing bar on Friday. Overall, I don’t see anything to undermine my bullish bias for the long term yet, but Friday’s bar has me a little cautious for the short term, hence my neutral bias. Volume also spiked on Friday as investors sold hard into Coronavirus news, creating a little bit of panic selling. This underscore my belief that, behind the bullish face the market has on right now, investors are jittery and ready to sell into any bad news. One bright spot to take away from Friday’s bar is the bottoming tail, which tells me that the bulls aren’t exactly running for cover. They are still buying into dips, so we will have to see if there is any bearish follow through. While I remain bullish for the longer term, I have to admit being a little wary about the market correcting hard and fast given the proper triggers.

Annotated Daily Chart for the Dow:
https://www.dropbox.com/s/eq07efg70b...%20AM.jpg?dl=0

After a week like this last one, I would expect to see a lot more short than long setups, and indeed I did. I’m not loving most of these setups, but here are some stocks I will be watching for day and swing trading opportunities to start the week.
Longs: CNSL, OLLI
Shorts: CGC*, DFS, DXC, GBT, RUBI, SAGE

*- On My brokers hard to borrow (HB) list.

Good luck with your trading and investing.

[BlueWolf]

Market sentiment for week ending February 7, 2020

Market sentiment for week ending February 7, 2020

Short Term Bias: Bearish
Long Term Bias: Bullish

I have included annotated daily charts for both the NASDAQ and the S&P because of a very minor divergence. The Dow is very similar to the S&P, so I did not include a chart.

Well, this week made two Fridays in a row on which the market got slaughtered. This Friday’s bearish bars were even more powerful than last Friday’s and left each of the major indices on a bit of a precipice. The indices challenged their regression channels hard with a bearish engulfing bar on the NASDAQ and giant bearish bars on the Dow and S&P that broke through the downside of their regression channels with a vengeance. Personally, I expect more to come, especially since we haven’t had a sizable correction since October, 2019. Hence my short term bias is bearish. The big question I have is whether or not this is just a short term correction or the beginning of something more prolonged. I think it’s safe to say that as long as the CoronaVirus outbreak goes unchecked, the markets will take a beating, but I’m still not seeing indications of a looming recession. In fact, recent GDP numbers were solid. For that reason, my long term outlook remains bullish.

Annotated Daily Chart for the Dow:
https://www.dropbox.com/s/aa6qnlrn6r...%20PM.jpg?dl=0

Annotated Daily Chart for S&P:
https://www.dropbox.com/s/7v1n7e16le...%20PM.jpg?dl=0

I really expect that there will be more to the current CoronaVirus-driven correction, so I’m going into the week locked and loaded in anticipation of actively shorting. I’m primarily trying to avoid having to sell off too many of my long positions until I’m certain we are in a prolonged bear market. Short term shorting allows me to generate some profits to offset any drawdown while I try and figure out the bigger picture. Of course, I will take on long trades if they develop. In my short term trading, I almost exclusively trade with the direction of the market, but in this case I do have a few long candidates that might have upside, even on a down day, because of the CoronaVirus. Here are the stocks I’ll be watching for day and swing trading opportunities to start the week:
Longs: GDOT, NVAX*, TGTX, VIR*, XLRN*
Shorts: AMKR, BSX, CNSL, CRUS, CVET, LEG, SIG, WUBA, YELP

*- Stocks that may have upside because of the CoronaVirus threat.

Good luck with your trading and investing, and if you have a mind to, please pray for the people suffering as a result of the CoronaVirus.

[BlueWolf]

Market sentiment for week ending February 14, 2020

Market sentiment for week ending February 14, 2020

Short Term Bias: Neutral
Long Term Bias: Bullish

I have included annotated daily charts for both the NASDAQ and the Dow because of a divergence. The S&P is more similar to the Dow than the NASDAQ.

Well, at least the market didn’t get slaughtered last Friday, but it was a strange week. After the CoronaVirus-driven move down on Jan 27, the NASDAQ started consolidating sideways for several days. Most importantly, the NASDAQ stayed within its regression channel, never indicating that a trend change might be in progress. On Tuesday, the NASDAQ gapped up strong and on Thursday made a new high, once again signaling that the bulls are still in control. The Dow and S&P took slightly different paths. In the DOW, the index continued to move down with a bearish, wide ranging red bar on Jan 31 followed by a bar on Feb 1 that opened and closed outside of the regression channel. Normally I would take this as a sign that a trend change was in progress. The Dow surprised, however, by gapping up strongly the next two days and then climbing to a new high. One thing that has me concerned, however, is the formation of what looks like a double top on the Dow and S&P. The NASDAQ isn’t exhibiting this pattern and the divergence has me a little wary. For that reason, my short term bias is neutral. The continued overall strength of all three indices and the fact that all three made new highs last week, however, reinforces my long term bullish bias.

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/4kw08le7dw...%20AM.jpg?dl=0

Annotated Daily Chart for the Dow:
https://www.dropbox.com/s/sdu6x31h8z...%20AM.jpg?dl=0

I’m not really sure what to expect going into the new week, so I will be prepared with a variety of short and long watchers in the hopes I might find something to trade. Here are the stocks I’ll be watching for day and swing trading opportunities to start the week:
Longs: GDOT, LYFT, TWOU
Shorts: AMKR, GRUB, PAGS, SWKS, ZGNX

Good luck with your trading and investing.

[BlueWolf]

Market sentiment for week ending February 21, 2020

Market sentiment for week ending February 21, 2020

Short Term Bias: Bullish
Long Term Bias: Bullish

I have included annotated daily charts for the NASDAQ. I have omitted the Dow and S&P because they are mostly consistent with the NASDAQ, except for a little more weakness inside their regression channels.

It was another fairly incredible week for the market as all three indices climbed to new highs. The NASDAQ is pegged to the top of its regression channel, and both the NASADQ and S&P are basing at the high. The Dow doesn’t exhibit quite the strength of the other two indices, but it did have enough strength to power to a new high on Wednesday before pulling back a little. Because of this, my short term bias is bullish going into the new week.

What strikes me about the market in general, is how sustainable the current strength appears to be. General technical indicators are still strong across the board, volatility is low, earnings have been good, and numerous individual stocks are exhibiting strong chart patterns. Moreover, economic indicators continue to show strength in the economy. There just aren’t any pronounced signs a a pending recession yet. For these reasons, I remain bullish for the longer term.

Annotated Daily Chart for the NASDAQ:
https://www.dropbox.com/s/3pv4nxtsyf...%20AM.jpg?dl=0

There weren’t a lot of compelling patterns that jumped out at me during my scans this weekend, but here are some stocks I’ll be watching for day and swing trading opportunities to start the week:
Longs: CC, EXAS, RUN, TGTX, TSLA, TWOU
Shorts: CAL, GRUB, LPSN

Good luck with your trading and investing.

[Louetta]

Also helping, methinks, is the perception among some that if Bernie emerges as the front runner among the Democrats, Trump will beat him, which should be good for stocks. Also, the plan floated late this week where wage earners would be able to deduct from taxable income money newly invested in stocks. Whether it happens, and it might not if the Democrats can hold the House, the perception that it might should help.

[BlueWolf]

Also helping, methinks, is the perception among some that if Bernie emerges as the front runner among the Democrats, Trump will beat him, which should be good for stocks. Also, the plan floated late this week where wage earners would be able to deduct from taxable income money newly invested in stocks. Whether it happens, and it might not if the Democrats can hold the House, the perception that it might should help.

I’m hoping that Biden wins the nomination so that this presidential race can be settled in the only way that makes sense ... with a sword fight! Trump can wear his CornPop outfit.

[BlueWolf]

Wasn’t sure which thread to post this on, so I decided to post it here. I was doing some research on bull and bear markets in the Dow since 1900 and found some interesting stuff. I was surprised by some of the things I found.

Not too surprising, the worst bear market in terms of percentage drop was, by far, the bear market that followed the 1929 crash. In just three short years the market lost 86% of its value. As the great Frank Zappa would say, “Great googly moogly!”

This bear market, however, wasn’t even close to being the worst in terms of duration. It only lasted three years before the market reversed into a seven year bull market, although it was only able to recover 54% of it’s lost value. The Dow didn’t reclaim its 1929 high until the year 1959.

Over about a five year period from 1937 to 1942, a second bear market followed. This time the market dropped about 55% of its value. Still pretty bad, huh. Well, quit your grinning and drop your linen, because, in terms of duration, there are some whopper bear markets to come.

Before we get to the next great bear market, there was the great bull market of the 50’s, the baby boomer bull market. That lasted from 1949 until 1966, about a 17 year duration, and was the market during which the 1929 high was taken out. That was an astonishing run and mirrored the explosion of the post war US economy.

Then it comes, the great bear market of the 70’s, from 1966 all the way through 1982, about a 16 year run. Some people would say this was a period of decline in the US and the market certainly agreed, losing 73% of its value during this period.

After that came the great bull market of the 1990’s, lasting about 17 years from 1982 to 1999. This bullish era came to an end with the burst of the .com bubble.

After that, the market went sideways for about 8 years until the credit crash in late 2007. This brief but violent crash only lasted a little over a year and ended in 2009 when the current bull market started.

There are a couple of lessons to be learned here. First lesson is that the current bull market, which started in 2009 is “only” 11 years old, far short of previous mega bull markets which lasted 16-17 years. So for those who would say that this bullishness can’t continue much longer, history says otherwise. I don’t doubt that we are overdue for a correction, but I for one think this bull market still has legs for the long term. The second lesson is that when we do actually go into a recession it is likely to be a nasty one, possibly creating a bear market environment that could last a decade to more. Yikes. I don’t see that happening any time soon, but history tells us that it will happen sooner or later. Here’s to hoping it doesn’t happen for at least another decade. 😬

[Louetta]

I can best relate to my own limited in length of time experience.

In March 2000, late in my freshman year in high school, the Nasdaq hit a record of 5048 or thereabouts.

By the time I started my senior year in September 2002 the Nasdaq had fallen to 1200.

I was two months short of 30 early in 2015 before Nasdaq got back to 5000.

So based on this limited experience I conclude it's important to try to minimize one's loses during the relatively short bear markets because it takes many years to get it back. I agree it doesn't look like this will happen any time soon as we have an administration and a Fed who are following bullish policies. But if it soon appears Bernie is going to beat Trump and given that the Fed has already fired a lot of their recession fighting bullets (low rates, big balance sheet) things could change fast.

[BlueWolf]

I can best relate to my own limited in length of time experience.

In March 2000, late in my freshman year in high school, the Nasdaq hit a record of 5048 or thereabouts.

By the time I started my senior year in September 2002 the Nasdaq had fallen to 1200.

I was two months short of 30 early in 2015 before Nasdaq got back to 5000.

So based on this limited experience I conclude it's important to try to minimize one's loses during the relatively short bear markets because it takes many years to get it back. I agree it doesn't look like this will happen any time soon as we have an administration and a Fed who are following bullish policies. But if it soon appears Bernie is going to beat Trump and given that the Fed has already fired a lot of their recession fighting bullets (low rates, big balance sheet) things could change fast.

I was surprised that a bear market can last as long as it does. That 16 year bear market that spanned the 70’s was a nasty one. God forbid we go into one of those because I just don’t know how to make as much in a bear market. It’s much harder, especially in a retirement account in which you can’t short.

I agree with you on Bernie. If he were to win the presidency, I fear that a prolonged bear market would begin, and you’re right, the Fed is out of bullets. Even if the Fed could pull the trigger again, there’s is not much they would be able to do about the dramatic drop in productivity and GDP that would inevitably occur as the economy contracted under a Bernie spend-a-palooza administration. Then again, I don’t know how much of his policy would be enacted because there are plenty of Democrats who wouldn’t support the kinds of legislation he would likely propose. Something tells me that just like last time, the Democratic Party itself won’t allow Bernie to get the nomination.

[BlueWolf]

Market sentiment for week ending February 28, 2020

Market sentiment for week ending February 28, 2020

Short Term Bias: Bearish
Long Term Bias: Neutral

I have included annotated daily charts for the NASDAQ and Dow because of a chart divergence between the two indices. I have not included a chart for the S&P, which lies somewhere in between the states of the other two indices.

The week ended on a bit of low note as the indices pulled back hard two days in a row. Friday’s wide ranging red bar bar was a little worrisome, and although it did have a bit of a bottoming tail, its width alone could portend more downside to come. For that reason, my short term bias is bearish. I have frequently said that the market is overdue for a significant correction, so I will be very attentive to the next few days action to try and sniff out whether the current action is the beginning of that correction. For that reason, my long term bias is currently neutral while things sort themselves out.

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

Annotated Daily Chart for the DOW:
https://www.dropbox.com/s/8a7tfxlfn7...%20PM.jpg?dl=0

I saw tons off bearish charts while doing my scans, but that doesn’t mean that I saw a lot of tradable patterns. I did find a few I liked though, so here are some stocks I will be watching for day or swing trading patterns to start the week.
Longs: CNSL, IOVA, TWOU
Shorts: APLS, CVET, QRVO

Good luck with your trading and investing.

[billyjoe]

My portfolio is down 8.9% I haven't sold anything and bought some great dividend payers at discount. The last great downturn in Dec. 2018 I was down 9.9% and gained it all back in about 45 days. I'm optimistic.

-----------------billy

[BlueWolf]

Market Sentiment for Week Ending March 6, 2020

Market sentiment for week ending March 6, 2020

Short Term Bias: Bullish
Long Term Bias: Neutral

I have included two annotated daily charts for the NASDAQ in order to look for a possible long term, repeatable pattern. One show the period from late 2016 to the end of 2018 and the second shows the period from the start of 2019 to the current correction. For the sake of time, I did not include charts for either the Dow or the S&P, although the DOW was an interesting case study that has retraced much more deeply than either the NASDAQ or S&P.

This week, I decided to take a long term look at the NASDAQ as an exercise to see if I could discern a possible long term repeating pattern that might give us a clue about where the indices might be heading from here. I have to preface my remarks by saying, however, that trying to call a bottom is difficult to impossible. That’s why I consider what I have done this week as more of an exercise that a hard analysis. Still, many things in this world follow repeatable patterns and the markets are no exception. We see this on short term time frames all the time. Even on long term time frames, analysis techniques such as Elliot Waves can be eerily accurate.

In this case, I did something very simplistic. I compared the previous uptrend and significant correction to the just ended uptrend and current correction. I did indeed find several similarities in the two time frames as you can see by looking at the two NASDAQ charts.

In the first period, the uptrend started in February, 2016 and went into a deep correction in October, 2018. The length of the uptrend was approximately 20 months. The length of the correction was approximately 3 months. The correction reached a Fibonacci retrace level of 50%, right on the nose. This correction was deep enough and long enough to qualify as a mini-bear market. Interestingly, during the correction, the market bounced off an area in which it had previously consolidated.

In January, 2019, a new uptrend started and lasted until mid February, 2020. The length of this uptrend was therefore about 13 months. At this point the correction started and has so far lasted a mere week. Again, however, it is approaching an area in which it has previously consolidated and in which it might find the support to bounce.

How much can we extrapolate from this data? Well, a little. I don’t put much stock in trying to compare the ratios of uptrend length to correction length, but I do consider the retrace levels to be somewhat significant. The late 2018 correction retraced to the 50% Fibonacci level before turning. So far, this early 2020 correction has retraced to a level between the 38.2% and 50% Fibonacci levels. I also put some weight into the fact that the market is approaching a consolidation level in which it might find some support as it did in early 2019.

So am I saying that the current correction will stop at the 50% level? No, but I do believe that the 50% retrace level is important. If the NASDAQ pushes down through this level, we could be looking at a prolonged bear market. If this level holds, based on the prior patterns, I believe the market will rebound to make new highs and I will probably go all in again.

The bounce on Friday was significant enough for me to start adding back some buy and hold long positions. My short term bias is therefore bullish. This was a bit of an anticipatory move since I usually like to see some confirmation, but the nature of the drop was so severe, I believe any rebound will be abrupt and I didn’t want to miss out on good entries. If the indices hold at these levels and start to climb sustainably, I will be adding even more positions over the course of the next few weeks, but I am also a little apprehensive. It is very possible that the markets could bounce a little and roll over again or just continue down on more bad Coronavirus news. For that reason, my longer term bias is neutral, and I will be cautious about adding from here on out while I try to confirm that this correction is truly over.

Annotated Daily Chart for the NASDAQ for period 2016-2018:
https://www.dropbox.com/s/bqzv9qq4yc...%20PM.jpg?dl=0

Annotated Daily Chart for the NASDAQ for period 2019-early 2020:
https://www.dropbox.com/s/czdjsagifw...%20PM.jpg?dl=0

Since I am just trying yo get a feel for the longer term market direction, I will be focusing on longer term buy and hold positions this week. The stocks I will be watching for entries are basically the current stocks on my Long Term (LT) watchlist:

Longs: AAXN, ABMD, ADBE, AMT, AMZN, APPF, APPN, ATVI, BIDU, BILI, BRK/B, BZUN, COUP, CRM, CRNC, CRSP, CRWD, DAVA, EEFT, EPAM, EQIX, ESTC, EVBG, EXPI, FB, FLGT, FRPT, FSLY, FVRR, GH, HCAT, HQY, HUBS, IIPR, ISRG, KNSL, LITE, LVGO, MA, MDLA, MELI, MNST, MTCH, NEE, NTNX, NVCR, NVTA, OKTA, OLLI, PANW, PAYC, PING, PYPL, QTWO, RDFN, RGEN, ROKU, RVLV, SFIX, SMAR, SPLK, SQ, SWAV, TDOC, TEAM, TLRA, TREX, TSLA, TTWO, TWLO, V, VEEV, WD, WIX, WORK, ZEN

Good luck with your trading and investing

[Louetta]

Good analysis. I bought some stuff too, late this week. Solid citizen stuff: V, MA, MSFT, AAPL, ADBE. (Still can't understand why BUD is down 20%. Do they think people will drink less?)

I'm interested to know what will happen in the AM now that a death has been reported in the US. Methinks there is at some point a realistic chance we'll see more cases in the US (maybe not deaths) and then some mayors or governors closing schools, telling people not to go to the movies, games being played in empty stadiums, etc. Fears of lost revenue and supply problems will hurt stocks though given the rise in stay at home stocks Friday some stocks will do better.

Also like to see what happens in Tuesday's election. Bernie is beating Warren even in her home state, per polls. Bloomberg's own network is running commentary on how he is in a weak position. If Bernie starts looking like a likely nominee and the economy starts to weaken because of virus related stuff and people start thinking he will win that won't help. I'm leaving health care and banks off my buy list.

Would be nice to get some clarity on these things. Could take a while.