Now there has been new highs since December 26th 2018. Market has been up and this rally has been going on for 27 days !!
NASDAQ faces a new test shortly – 7450 to 7500 is a critical resistance. Currently it is around 7350. it is facing in 100 points a century figure and 200 day Simple moving average (SMA)
87.2 % of S&P 500 stocks are above their 50 days SMA. NASDAQ is about 400 points above their 50 days SMA.
High volume selling in NASDAQ and S&P 500 is just 1 in the last 27 days !
the industry group of Enterprise Software is up 30 +% in 2019.
PAYC has shot up 5 dollars yesterday and it’s EPS is due on Tuesday Feb 5th 2019
the top 5 stocks in this group are
CRM SALESFORCE.COM INC
FIVN FIVE9 INC
NOW SERVICENOW INC
PAYC PAYCOM SOFTWARE INC
PCTY PAYLOCITY HOLDING CORP
it is a big beast – there are big big players with billions of dollars trading the market every day
For Jan 30, 2019
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Now for small time folk like me, the deluge of money and trading will overwhelm me. that is why i will not day trade. 2.5 billion shares are traded and i am not capable of knowing what is going to happen because my position can be wiped out in a min.
also total dollar volume is 129 billion
that is why end of the day price is so very important . why ? Because after all the fighting and back and forth snd trying to decide on the tug of war and over and over again money and stocks trading hands. at last they come to a market agreed price.
this is the price market has agreed, P/E ratios or sales figures or Forward looking EPS etc all the knowledge is finally found in that price. All the billions of dollars of super computers and auto trading and algorithms and quants have come up with this price.
and i should respect it.
2700 was a strong century figure resistance for S&P 500 and then for NASDAQ it is 7000-7200.
On higher volume both crossed that number yesterday at the end of the month
i am long on QLD and AMZN call.
In the mind, as in life, it is always 20-20 looking back (hindsight is always clearer). In Trading the philosophy of this blog is always 20-20.
the closing price itself is the most significant. Why? yesterday (again 20-20) is a prime example. NASDAQ opened 106 points down – around 1.4 %. went down 124 points compared to the previous day’s close (1.73%) but then closed at 7085 about 12 points higher than it opened. Look at the following 5 min chart. It is range bound and closed at upper part of the range.
Now look at the chart below. It is S&P 500 Stocks Above 50-Day Average ($S5FI)
on 1/22/2018 this very reliable portent dropped by more than 11%. that was a good scare. Now on that day (Tuesday, right after MLK holiday) NASDAQ dropped by 136 points (1.9%)
Now look at the behavior – both days. the charts indicate the behavior. on 1/22 clear down trend and 136 point drop and $S5FI dropped 11 + % points. that is why IBD said on 1/23 day end – “Stock market bulls breathed a sigh of relief Wednesday as Wall Street endured another whipsaw session.”
Yesterday though the drop was significant. the volume was lower compared to 1/25 (Friday). it was a range bound day and closed at upper end of the range. and $S5FI dropped by only 1.6 % points.
and also both yesterday and on 1/22 the volume fell on both NASDAQ and NYSE exchanges.
another good sign for NASDAQ is that the candles are bouncing above their 10 days SMA.
as a side-note : NASDAQ volume is about 2.4 billion and the dollar volume is 120 Billion daily!! Now we let the Big dogs like pension funds, and mutual funds and Quant automatic computerized trading, ETF managers, hedge funds play it out in the day.
We are concerned only with end of the day price and the behavior during the day and psychological important Moving averages like 50 Days and 200 days. Somehow this along with major support and resistances. It gives us great relief and mental rigor when we avoid the fight during the day.
I am continuing to be in the market. Long QLD.
Happy trading !
look at the above chart of QLD – nasdaq 100 Double . both the 55 days SMA just crossed the 208 days SMA from above and also the 10 days EMA crossed the 22 Days SMA from above (rather bounce).
My expectations is that market is going to fall further.
NASDAQ is just above the critical 7000 level we have had triple top
NQ has a a shorting opportunity at 6800 level
when market falls it does so quickly.
Now you see in the previous posts how all macro signs pointed this right before 10th October 2018.
it can be found in three parts – part 1 part 2 and part 3
now i made money during this fall (anyone interested to see the proof, please contact me at exlporingdesh at gmail dot com ) or leave email address in comment section.
how does one make money when market declines.
there are three straight forward ways A) buy an inverse ETF like QID. B) buy puts on NASDAQ or C) short NQ futures.
Only B has limited risk limited reward.
Let me show you how
happy trading travelers
A follow through day is a gain in major indexes for 1.25 % or more in high volume. The market did just that today.Â
IBD says this
The midterm election results and a 2.6% gain for the Nasdaq composite delivered a nice present for stock market bulls Wednesday. The Nasdaq 100 did even better, up 3.1%, helped by strong moves fromÂ FANG stocksAmazon.com(AMZN), up nearly 7%, and Netflix(NFLX), up 5%.
The Nasdaq composite followed through on the seventh day of its rally attempt as several top-rated growth stocks made explosive moves in the stock market today. The S&P 500 also followed through with conviction, and the Dow Jones industrial average surged also, both with gains of 2.1%.
lets look at if other stocks in S&P 500 are participating in the action yesterday .
Look at the chart below – 13 % increase in the number of S&P 500 stocks above their 50 days SMA!!
i have gotten into the market from all cash position yesterday.
Red flag Research shows that a distribution day in any of the first three sessions after a follow-through day can foretell a failed rally. A distribution day that comes later is easier for a rally to overcome. THE RISK DROPS OFF SHARPLY from the 6th day or so
Red flag 2 : top rated stocks action :: in early stages of new uptrend strong action of leading stocks is CRUCIAL. Top rated stocks should be breaking out of bases in big volume.
A confirmed uptrend can weather an occasional sell-off every week or two and still show the fight to keep rising.
THERE WERE 7 distribution days many times in 2017 yet it rose 37% !!
I have gotten in the market yesterday. Good deepavali gift!!
CNBC has this “For the quarter, the S&P 500 rose 7.2 percent, its best quarterly gain since the fourth of quarter 2013.”
The article further adds this “The Nasdaq Composite also notched a 7.1 percent quarterly gain, its best since first quarter 2017. ”
DMSI – delta market sentiment indicator is 56.0
s&p 500 stocks above their 50 day SMA stabilized after it declined entire last week.
my decision – continue to stay in QLD and long on NQ