US stock market is showing weakness which it has not displayed since early November 2016.
Here is the current tabulation of many index in terms of 50 DMA :
Dow 202 points below 50 DMA
Nasdaq 26 points below 50 DMA
S&P 500 23 points below 50 DMA
Russell 32 points below 50 DMA
SOX 25 points below 50 DMA
XLE, TAN, IBB 1 points below 50 DMA
GLD 4 points above 50 DMA
Here is the current read on RSI :
SOX 32.57
DJIA 34.78
S&P 500 35.90
Nasdaq 40.43
Russell 40.59
TAN 41.89
XLE 42.42
IBB 48.68
GLD 74.87
CMF is negative in all indices / index except minor + 0.030 in Nasdaq and GLD +0.159
Market stat is clearly telling us that except Gold nothing else is working in this market.
Every other area of market is showing weakness which is not seen in a long time.
Last early November we hit 200 DMA in major indices and rallied from there on Trump bump, which has given up most of the gains.
Based on international tension, it is safe to predict that 200 DMA is in sight and may not hold this time.
Based on below 200 DMA probabilities, it is extremely important to execute a precise strategy, take any gains when available, reduce exposure and cut losses very early like on any technical rebound.
Market goes through these changes quite often, so, this should not and must not come as any surprise.
Earnings will not help and it may be " sell the good news " and " crush the bad news "...which is a no win situation.
Those who know how to play short safely through option or through ETF have a good environment to do just that.
Times have changed and it is up to you how you want to play, technically we are in bad shape and may get worse pretty quick.
Good luck with your own analysis and strategy.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Saleem,
Added to DAL @ 44.26
Stock finding support here at the 200 DMA and they continue to outshine UAL during this crisis time signaling great management. The recent earnings, although not perfect, were good enough to look for better numbers ahead, and the stock remains cheap with a good buyback in place.
Stocktrader
Hi Saleem,
Sold HBAN @ 12.63
I think we may have seen the best of the yield curve in the Q1 and loan growth is lackluster as we wait for finalized tax plans. I'll step to the sidelines on this regional bank for now.
Added to MU @ 27.07
There continues to be huge interest in Toshiba's chip unit, and the cycle appears to have another leg up before issues. At this technical support level, and with attractive valuation and earnings power, it is hard to ignore MU.
Stocktrader
Hi Stocktrader,
Good luck with more MU.
Saleem
Hi Saleem,
Last week recap:
Portfolio: -2.13%, YTD +7.38%
Winners: ZYNE Z BABA
Losers: AKS MU HUN HBAN URI RCL
Current holdings: DAL HUN BABA FB SPLK URI MU RCL ZYNE Z PLNT MJCO, exposure 89.7%
The economic data has been interestingly weak lately, and I think we're seeing the effects of many businesses "on hold" until we get tax resolution to know if they can make their investments this year or need to wait until next year to get the full benefits. The estimated Q1 GDP of 0.5-1.0% speaks to this and I wonder what companies will say starting in this week's earnings calls. I'm trying to stick to companies that have additional catalysts other than just general economic growth.
Stocktrader
Hi Stocktrader,
You are doing well compared to many indices and definitely me.
I went to negative 5.58% YTD.....
Saleem
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