What to make of the market?

This site’s philosophy is very simple. I feel (I hope I’m humbled by this ..or rather i hope I’m humbly starting this): This site’s philosophy is sublimely simple : Price is the only true north star. I want to simply mimic the price. Price is rising and i am buying. Price is falling and i am selling.

what i mean by that is this ?

Let me put it in a different way. Say you are conservative. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

QQQ or the cubes which track the NASDAQ – 100 has a beta of 1.10 ..roughly it mirror the NASDAQ – 100. AMZN , Amazon has a beta of 1.71.Netflix NFLX 1.53.

there are ETFs dedicated to High Beta or it’s implications – momentum stocks!

Now QLD , which daily doubles the NASDAQ – 100 has a beta of 2.25 !!

Say Jan 4th 2019 when the market started its rally you bought 100 shares of QLD for 68 dollars.  On Feb  6th 2019 it hit a resistance at 200 day SMA and then next day you sell at market open (it confirmed because there was a gap down). You sold at 79.

So you went in with 6800 dollars and now you have 7900 dollars.

Now if you look at market and it is dropping on high volume end of the day prices you know the market is in downswing. Say it drops down to 70 USD, and you get in based on simple end of day price action. Now you have 112.8 shares!!

See you accumulated assets slowly! In QLD or for that matter NFLX or AMZN wealth is accumulated by accumulating shares by being in cash when the market is falling!! and getting in when the simple price volume actions says the trend is reversing from going down to going up.

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. 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.

Happy trading folks!

 

 

the beast has woken up

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It will not escape your attention ladies and gentlemen that for the last 8 trading days in NASDAQ since Jan 15th, it has closed above its 50 day SMA.

on 1/22 there was a drop and high to low difference of 130 points but still it bounced neatly above 50 day SMA and closed above the century figure of 7000, a good 20 points above it.

similarly on 1/23 a nice push up/buying pressure from low to close of 75 points, a good bounce above 50 days SMA can most importantly a close of 7025.5 points above the previous day’s close.

Closing price is critical and a close above 50 days SMA, a good bounce above it; and then above the century figure of 7025 and then above the previous day’s close…these all scream about one thing. The market is refusing to let go it’s gains. this is so unlike the previous 3 attempts to rally.

its good to see another good gains on 1/24 and 1/25.

IBD has this point “The interesting part is that the leadership is shared and broad, so far. Nine sectors are up about 7% this year, including electronics, energy, banks, software, finance, transportation, chips, S&Ls and retail.

Admittedly this is early to be identifying leaders. But if the trend holds and grows, the stock market could be looking at a rally with many players. What bull wouldn’t like that?”

For me i like this and am already long on QLD.

 

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

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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

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.

the funds were buying everything

Screen Shot 2018-09-21 at 9.25.12 AM

Friday, September 21st 2018, around 9:00 am IST, around 11:30 pm Thursday Night New York Time

S&P 500 and Dow Jones Industrial average rose to all time high. Out of 197 industry groups tracked by IBD winners led losers by 7 to 1 !!

Look at the above chart – a 7.29 % jump in percentage of stocks in S&P 500 trading above 50 day SMA!  to 70.03!

Important note : Friday is quadruple witching day. Volume is going to explode.

QLD good up day, good upswing above 9 Day EMA, good volume – 1.174 Million. OBV increased to 11.83 million

NYSE Advance decline line – fantastic and highest! 1907 stocks up on 2.48 Billion volume, which is about 4 times the volume of 898 stocks down on 0.70 billion volume !

Top bull day!

Decision : i will continue in the market Long on QLD and NQ

 

What a upswing yesterday!

Wednesday, September 12th 2018, around 8:30 am Hyderabad, India; and around 11:00 pm Wednesday, September 12th 2018 New York Time

futures before opening did not look nice…NDX opened lower about 40 points! but immediately started going up and up 100+ points at close. That is a good upswing!

NDX solid support and bounce above 9 Week EMA. FFTY – top 50 growth stocks in the market good bounce above 9 Day EMA!.

Accumulation distribution line for NYSE – not as good as yesterday, but 1430 stocks up (majority of stocks) in good volume of 1.56 billion (better volume than yesterday)

most spectacular advance was NDX – low of 7401 and closed around 7507!

only red flag was the breath – IBD calls it ‘curiously soft’ ! Decliners led advancers by 15-to-13 in NASDAQ. Well there is one other red flag – % of S&P 500 stocks above their 50 day SMA declined by not that much to 64.55

One another thing – Apple, Amazon, Microsoft, and Google is 26 % of NASDAQ! Now these stocks are institutional darlings and heavy weight!. How are the institutions treating them ? Screen Shot 2018-09-12 at 8.45.50 AM

decision : I’m staying in QLD

and i am long on NQ 1 Contract

Happy trading

big picture for the week of September 4th

Screen Shot 2018-09-08 at 8.58.15 AM

Overall a green flag for uptrend this week. But before that the schools are back in US, end of labor day, back to schools for summer. Traders, investors and Institutions are back in full swing..

The news with tariffs and stuff has not really jittered the market. Lets looks at the big S&P 500 weekly chart

Screen Shot 2018-09-08 at 8.55.05 AM

what a wonderful uptrend!. Neither the S&P 500 nor NASDAQ nor NDX has broken below the 9 Week Exponential moving average. the above chart is brilliant and beautiful!

the Jan 2018 high of S&P 500 is around  2872  now recently we move 1.5 % above the January high and has very timidly retreated. it closed 2871 yesterday.

FFTY – the top growth stocks in the entire market has put in 1% yesterday.

NASDAQ lost 185 points this last week and is down 2.2 % for the week.

Market sentiment indicator – measuring from Thursday to Wednesday went down just 1 point to 62.3

Screen Shot 2018-09-08 at 9.23.05 AM

my only concern is the above chart – For 6 days it went down. yesterday it dropped 3.17 % points but look at the above chart a weekly uptrend from July 2nd 2018!

decision : stay in QLD and NDX but wait on NQ because of the volatility!

Look at chart below – what a wonderful chart – lowest unemployment ever!

Screen Shot 2018-09-08 at 8.57.42 AM