Great rally so far but OBV not convincing on NASDAQ

according to IBD – “The Nasdaq composite ended with a gain of 1.5%. But the blemish to the gain was that the index met with some selling pressure as it approached the 7500 level. The index’s 200-day moving average currently sits around 7520. The Nasdaq closed in the upper half of Monday’s range, but it ended just below the 50-day moving average.”

The On Balance Volume (OBV) on QLD is not convincing – it is just above the levels on Nov 9th 2018 which is 59.337 Million as opposed to yesterday which was 59.786 million. no divergence (this divergence was exactly seen on Nov 7th 2018 at 62.335 million which was much below at similar QLD price levels on 10/22 when then OBV was 67.719 million)

then the market fell from 7500 Levels on Nov 7th to 6900 levels on Nov 20th – a drop off 600 points because of volume pumping up the price was not intense. OBV would indicate that very clearly.

according to IBD – “The Dow Jones and S&P 500 each added 1.1%, closing bullishly above their 50-day moving averages. Preliminary data showed volume on the NYSE coming in about 10% lower than Friday’s total. Nasdaq turnover was close to Friday’s.”

but for NASDAQ the cortical level of 7500 is not crossed.

Market is in rally but preserve capital and profits

market is in rally

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 from 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!!

Screen Shot 2018-11-08 at 8.34.10 AM

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!!

happy trading

 

Best quarter in 5 YEARS!!

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

Screen Shot 2018-10-02 at 11.22.44 AM

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

what’s going on in the market

Screen Shot 2018-09-28 at 10.30.04 AM

Friday Sept 28th around 10:00 am IST 00:30 am just past midnight New York time

today would be the last trading day of the month and also the last trading day off the quarter

Yesterday prices faded as the day ended. In the above chart $S5FI – The percentage of stocks in S&P 500 that are above their 50 days SMA…they have fallen the entire week!

18 points fall from August 29th from 73 to 55.

last time from June 12th to June 28th s&p 500 fell 83 points and $S5FI fell 21 points .

So that is a red flag

but the A/D line for NYSE actually went up

So i am little confused. Why did the market fade away so badly yesterday ? What are stocks falling below their 50 day SMA?

Now price is the true north star so

my decision  : I will continue to be long on QLD and I am also long on NQ

 

big red flag exiting NQ

Screen Shot 2018-09-25 at 12.35.52 PM

Tuesday Sept 25th 2018 around 10:30 am – 12:30 a IST, which is past midnight Tuesday 01:00 am – 3:00 am Tuesday New York Time

I have exited NQ with around 60 points gain. Looking at the above chart. biggest red candle in the number of S&P 500 stocks that fell below their 50 days SMA . Its a 10 point drop ! S&P 500 dropped little more than 10 points. Very great anomaly. for a 0.3 % drop in S&P 500 the number of S&P 500 MEMBERS that dropped below their 50 DAY SMA fell by 15%.

NYSE advanced declined line – 1918 stocks down on 2.3 billion volume. Only 896 stocks up on 992 million volume

one positive sign : NDX opened at 7477 with 45 points gap down from previous day close.

now that was the lowest too! It swung up 71 points to close around 17 point more than previous day’s close!

my decision : i have already exited NQ, I am continuying to hold on to QLD

 

Market weekend review week of Sept 17th 2018

Screen Shot 2018-09-22 at 11.04.58 AMScreen Shot 2018-09-22 at 9.57.30 AM

looking at the big picture of weekly chart we see that it is  good picture

trading what we see rather than what we think is key. the chart is explaining to us that the price action is good and majority of stocks are above their 50 days SMA in S&P 500.

1 red flags though. QLD daily in H-A price charts – it has a 3rd red volume bar on a green candle stick. but the volume is less than 1 million.

NASDAQ is down 2 % off its all time high. NYSE Advance Decline line A-D line, which is a breath indicator, is slightly below its all time high.

Market sentiment indicator is up for the week 56.9.

Decision : I am still long on QLD and NQ.