Market at the top, will history repeat?

Current market participation : unfortunately because of 12 hours time difference between bali (I am currently in Bali Indonesia ) and NY, I am currently not participating in the market. Timing is critical during breakouts and It is sleeping time here when market opens in NYC! If COMP moves up by 100 points than that is added to the risk if the breakout is missed.

This below info is for the readers.

Nasdaq hit all time high. March 12th week and April 2nd week crash stabilized the next 4 weeks. April 30th it retook the 9 week Moving average

From May 7th to yesterday the hole which was dug the market came out

Look at this chart below FFTY the top 50 growth stocks in the entire market

It just topping and topping

NYSE’s advance-decline line has now risen for five weeks in a row.

S&P 500 spent four solid weeks above its 50-day moving average. That’s the longest period of time since January. Technically speaking, that’s good. It means the rally is accelerating.

Accumulation/Distribution Rating the Nasdaq scored a B-, much improved from a D since May 10th uptrend start

And finally 65% of all stocks in S&P 500 are above their 50 day simple moving average

So Market hit a top. It is very likely to go up further

Happy trading !

Market could be in Correction ?

5 days of stalling and no progress

2 days of high volume selling

100 points loss in 2 days in high volume

Top leaders down in high volume

( first photo source : trading view )

FFTY etf a proxy for top 50 beat stocks in the market down by 2%

#ffty #etf

#market

#marketincorrection

First day of August – market feels tame

Weekly chart on the right appears to be forming a top. but it is clearly in an uptrend

daily chart (on the left) – good chart damage a few days ago in higher volume

Major Indexes rose only 0.2 % – 0.3 %. Small caps ran up – Russel went up 0.2%

On NASDAQ – volume – a good indicator of institutional buying is roughly even compared to Monday.

The best Industry group today is automation industry – up 4.1% – supported by CGNX  – up 11%

Consumer loan, oil field services, scientific and measuring gear, heavy construction and outsourcing companies also outperformed well and grew more than 2% today.

 

A view to a kill!

COMP SHOT JULY 24TH 2017

what’s more at the top? More of the top.

Last week all the indices hit all time high.  How far is far enough?

when P/E is constant, then the risk premium is constant.

P/E has been hovering for S&P Index around 20.5 for the last and half year (DEC 2015 to June 2017) .   earning increased from 100 dollars to 116 dollars around 16%

So mostly the gain in S&P came from the gain in real earnings of the companies!

So assuming just the earning to grow by 10% (very reasonable..just the growth %) and P/E = 20.5 as constant

then S&P would be (116+10% of 116)  * 20.5= 2615 – a gain of 144 points from today.

the leading economic indicators – % change has been positive for the last 10 months!

around 65 % of stock market is about its 75 days moving average.

Now value of companies according to the theory is based on discounted value of the cash flow. because of low interest rates companies can borrow much with little interest paid. Hence expansion, hence earnings growth!

Happy trading!

“The market can stay irrational longer than you can stay solvent.” –  John Maynard Keynes