It is going up and upper!
See from the chart above, about 83% of S&P 500 stocks are above their 50 days SMA. The breath is profound and good. It has reached the April 2019 highs. So, if that is the case then, is a correction imminent ? No, not right away; for the price is not falling.
The following has been added to how and why page.
This (# 3 and #4) i have added after a few years of full time trading as of July 13th 2019 (in south indian city of Hyderabad): Price is the only true north star. Not only all is in the price, all is the price.
Buy at the top sell at the bottom –
Profit in assets are only made at the price you buy not at the price you sell. So you go long (buy) at the beginning or there about of an uptrend or go short (sell) at beginning or thereabouts of a downtrend. Since price is the only true North Star. One ‘exits’ at the top or bottom to make true profit and to accumulate assets. In both cases – long or short – you are buying low and selling high (in trend following jargon – you are always buying and selling in strength, that is you are little late to the party and leave a little more earlier) . THIS DOES NOT MEAN YOU ARE ACCUMULATING ASSETS AS PRICE IS FALLING. In fact it is exactly opposite to it. Accumulating assets as prices are falling is buying high and selling low ( you sell low because you can’t bear the pain of loss). You always accumulate assets when price is rising. You exit assets when it’s price is falling.
i was listening to a wonderful IBD podcast. MarketSmith Senior Product Coach Scott St. Clair was candid, humorous, self-deprecating. The middle part of the talk focussed on human behaviors. (behavioral finance)
there were gems in it. One is the fidelity study. here is the business insider article of September 2017 titled – Fidelity Investments Did A Study On Which Client Accounts Did Best And What They Found Was Hilarious
“They found that the best performing accounts were from investors who were DEAD! In second place were investors who had FORGOTTEN they had accounts at Fidelity.”
Scott says this (paraphrasing) : I had a client who died and the company policy was that i cannot touch – i cannot sell or add to his positions.
“He was stuck in all these great stocks, and he didn’t have me to get him out of them..wiggle him out because they were going up” (check the same interview of podcast at youtube here at 22:05)
thank you Scott for your honesty and humor.
the red line is AMZN last 5 years. the blue line is TQQQ (triple NASDAQ 100), and the bottom is NASDAQ.
David Chung (@IBD_DChung) from IBD says this says this “Judo masters begin not by learning how to throw, but how to fall. They practice this skill until it’s as natural as breathing. No matter how many times they’re flipped, they can rise to fight again.”
He goes on to say : “Highly successful stock pickers go through similar training: They must learn how to cut their losses short. This means selling a stock when it’s down 7% or 8% from your purchase price.”
IBD 50 index is an index of 50 top performing growth stocks in the world with high spectacular momentum and top line (top 1%) of fundamentals.
As the market is picking up steam growth stocks lead it – and IBD 50 Index has been picking up. it just cleared its 200 days SMA and has been going up steadily last 3 days.
One positive yesterday is the OBV for TQQQ
Look at the chart below
the OBV is approaching very close to the the march 2019 high – and this is just 1st day of trading for 2nd quarter of 2019 !
I am long on NQ and TQQQ!
happy trading !
happy traveling also !
If we look at the below chart we see the problem in the 2 and 1/2 month rally started in the first half hour on Friday March 22nd 2019., You see with
the volume for 9:30 am half hour was about 3 times the average 50 Half hours volume.
TQQQ went down by -2.1 % compared to the previous days close !! that is – $ 1.25. i would have saved considerably money if i exited then. But alas, I did not.
Moreover look at the average trading range for 50 half hour periods. It is around 0.61. it lost double that during first half hour! Next on 3/25 Monday the volume grew even more to 5+ million and the price drop was close to 1 dollar!
Now look at the daily chart for TQQQ
3 fantastic high volume declines in last 4 sessions!!
IBD says this “The market outlook was lowered a notch to uptrend under pressure last Friday, when the Nasdaq composite plunged 2.5% in higher volume. With the market uptrend under pressure, it’s perfectly fine to take some profits in some top performers, especially if a stock has rallied 20% or more after a breakout from a base.”
high volume selling or severe stalling is 6 on NASDAQ and 7 on S&P 500 in the last 25 sessions.
Happy waiting !!
last 2 -3 days were very interesting. Yesterday S&P 500 dropped by 0.3 % but the number of S&P 500 stocks above their 50 days Simple Moving average (SMA). Last 5 trading days it dropped by around 9 points. Nothing serious but makes me cautious.
Russell 2000 closed below its 10 days SMA. It’s finding a touch resistance at 200 days SMA.
Let’s look at Heikin-Ashi chart for S&P 500 Stocks Above 50-Day Average ($S5FI)
not good look – the number of stocks in S&P 500 are losing momentum and are falling below their 50 days SMA. about 21 percentage points from march 1st 2019.
It’s in an amazing trend – not only there has been higher volume price increase in QQQ yesterday but volume increase was 50 percent above average!
lets look at 5 mins chart for NASDAQ composite
just up and down and lots of volatility but the most important point is that the closing price of the day. Which is the most important price – its been going up since Friday of March 8th 2019 except for one day on 3/14/2019, which is last Thursday.
for the 3rd day in a row TQQQ closed above the 200 days SMA!
The only thing little bothersome is Russell 2000 has been falling in the last chart which is the ETF with volume
all the FAANG stocks are up – wonderfully yesterday. Netflix was a bumper. It went up 4.5%, up 16 + dollars !!!
So what is the conclusion? Price is the only true north star and it is up so I am long NQM19 and TQQQ.
Delta news letter has some comedy with insight i love.
“Investors just experienced what it is like to be down 20% and then right back up 20%. It equals a 4% loss.
This is explained by how percentages work. Percentage down is calculated from a large number (SPX 2,940.91). Percentage up is calculated from a smaller base (SPX 2,346.58) which means a smaller absolute rise in the market still equals 20%. For investors to recover all of the losses from the high, their portfolio would have to appreciate by 25% from the low.
The percentage math gets worse as the loss grows. For example, if a portfolio starts with $100 and loses $50, it is down 50%. For the portfolio to return to its original $100 amount, it would have to appreciate by 100%.
Percentage math helps explain why losses are so painful and why avoiding major loss should be a top priority in an investment portfolio. Delta specializes in risk mitigation to avoid major loss.”
- NASDAQ about to breakout.
- Conservative estimates 100-200 points imminent in the next few days.
- UBNT Ubiquiti Networks. TWLO Twilio. TTD The Trade Desk. PAYC Paycom Software, Inc. Leading growth stocks.
When a Godzilla or KingKong is moving and running, it is common sense not to second guess what you see.
There is a trading maxim i learnt a few years ago – trade what you see and not what you think. at present it looks like its going to take off! 2 days the KingKong the beast called NASDAQ closed above its 200 days Simple Moving average
you see in the following charts – the first chart is OBV – On balance volume of QLD – DOUBLE NASDAQ 100 ..when on 10/04/2019 it was 53 million shares. Just yesterday we are 12 points below the close on 10/04 and we hit 53 million shares. Accumulation.
Secondly, look at the second chart of NQH19 futures contract. Incredible ascending triangle! Breakout imminent on NASDAQ.
other signs – Both S&P and DOW Jones have easily surpassed the 200 day SMA recently which just acted like token resistances (according to IBD)