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Kevin's Market BlogStocks Surge - Is The Downtrend Still Intact
Today was a big day in the stock market as stocks gapped open higher and never looked back. I've been bearish on the market but unfortunately got stopped out of all my shorts right around the open this morning.
Looking at the above chart of the S&P you can see the market is right at its 50 day moving average and is still making lower highs which technically means the downtrend is still intact.
Stocks- The Weakness Continues
Last Friday we had somewhat of a reversal which caused many traders to think the market put in some sort of a bottom but today's price action quickly reversed back to the downside.
Above is a chart of the NASDAQ and in the lower panel is the number of NASDAQ stocks trading above their 200 day moving average. As you can see, this chart is in a downtrend making lower highs and lower lows. In fact,
Google Inc. (GOOG) - Tight 3 Day Range
Google Inc. (GOOG) will be on my watchlist tomorrow for a short term one or two day trade. As you can see in the above daily chart, GOOG is in a downtrend and is now consolidating. This is the tightest 3 day range we've seen in awhile and should trigger a large range day once the stock breaks out. This stock also put in an inside day today which adds to the potential for a large range breakout
Semiconductors - Lowest Close In 5 Months
Stocks opened higher today but quickly fell into negative territory with the biotechs and semis leading the way lower. The ETF for the semis symbol SMH made its lowest close for the past 5 months. The year low which was made in February comes in at 24.42 and is within a day's range of being tested.
Gold Stocks- Bullish Pattern
Above is a weekly chart of the gold stocks index (XAU) and as you can see there is a coiling pattern taking place which is forming a triangle. As you know I've been bullish on gold due to the bullish seasonal influence that we normally see during this time of the year.
In the lower panel is a ratio line which compares XAU to the S&P500. If the ratio line is rising it means that gold stocks are
Apple Inc. (AAPL) - Big Level To Watch For
Apple Inc. (AAPL) which has been leading the market higher over the past year is now showing signs that the party may be over .
At the beginning of this month we saw the first signs of relative weakness in AAPL vs the S&P. As the overall stock market moved higher, AAPL moved sideways to slightly lower which suggested that this stock and maybe even the market may be in trouble.
Today we saw
Bond/Stock Ratio - Update
Back in May I wrote about how I felt the bond/stock ratio has put in a bottom and that we would see bonds gain on stocks. Well since that post the ratio has rallied substantially as investors move into bonds and out of stocks.
Today the ratio made new multi month highs and is at its highest level since August 2009. If you care to see that post from last May, all you have to do is click here.
SanDisk Corp. (SNDK) - Leads The Market Lower
SanDisk Corp. (SNDK) is a stock that has been a great performer over the past 18 months but like all good things, nothing lasts forever.
Above is a daily chart of SNDK and as you can see the major uptrend line which began in December of 2008 has been broken last month. There was an attempt earlier this month at the trendline but the stock was unable to penetrate this line and is now heading
Small Caps Test July Lows
Stocks opened lower today and stayed in negative terrirtory as sellers dominated the price action. The small caps (above chart) which is the weakest of the major indices is now testing the lows from July. Volume was good across the board which helps confirm that the bears are in control of the stock market for now.
Where Are Investors Putting Their Money
Above is a chart of the S&P500 and as you can see this market is down about 3.5% for the year.
The swings have been large in both directions but unfortunately this market has not been able to sustain a trend for more than 2 months in either direction.
You know the saying, "there's always a bull market someplace" and that place right now happens to be South America and Asia.
Above is a
Gold Continues To Rally
Last weekend I spoke about the bullish seasonal this time of year for the gold market and so far gold is moving higher right in line with the seasonal tendency. I'm a little suspect of this rally because silver is not following along. Usually in a true bull market, both gold and silver will rally together but so far that is not happening. Maybe gold is moving higher based purely on traders
Stocks Follow Yesterday's Trading Pattern
Today the price action in the stock market was similar to yesterday's price action except for the opening gap. Yesterday stocks made a low around 9:15 and rallied into the afternoon but sold off into the close and that is exactly what we saw happen again today.
The S&P traded up to yesterday's high but was unable to break through. There seems to be a little bit of a tug of war going on between
Stocks Stage A Broad Based Rally
Stocks staged an impressive broad based rally today on an increase in volume. The S&P still has it's gap slightly above the market which may act as resistance if stocks can rally just a bit more to the 111 area for SPY.
Some of the strong groups leading the rally today were real estate and energy stocks. DRN which is a real estate ETF was up close to 7%.
As we approached the last hour of
Bonds Rally To An 18 Month High
The Bond Market surged today with TLT making an 18 month high. If you look at a longer term chart of the bonds (not shown) you will see that there isn't much resistance at these levels which tells me to expect even higher prices in the days and weeks to come.
Stocks Gap Lower But Close Unchanged
Stocks opened lower but rallied for most of the day to close basically unchanged. The S&P got down to exactly the 50% retracement of the July/August rally. I'd like to see a bounce here so I can put on a few more short positions as I feel the market will test the lows from July. A rally to the gap (111.00 area) from last Wednesday would be ideal but I don't think we will rally that much. Lets
Gold - Which Way Will It Go
Above is a weekly chart of GLD with its 30 week moving average. As you can see, the 30 week moving average has done a beautiful job at containing all of the pullback over the last 18 months. Every pullback to this moving average has been followed by a significant rally.
So here we are in the middle of August with the gold market bouncing once again off of this moving average. The question that
Stock Indices Close The Week WIth Bearish Engulfments
Stocks closed the week pretty much at their lows forming what is known as a weekly bearish engulfment. All the major indices formed bearish engulfments which is an indication of a complete change in market sentiment. The 5 week advance that rallied the market last month stalled at key resistance and abruptly headed south..
The downside objective for the stock market in my opinion would be a
Disk Drive Index - New Lows For The Year
One group of stocks that have been really struggling over the past 2 months are the disk drivers. In the lower panel is the Disk Driver Index (DDX) and as you can see this index made new lows for the year today.
NTAP has been one of the stonger stocks in this index but is now beginning to fall apart. This stock gapped sharply lower today and continued to sell off into the afternoon closing
Stocks Turn Lower Triggering A Sell Signal
As of yesterday the stock market was at a crossroads which meant that we should be patient and let the market decide which way it wants to go. Well today stocks have chosen which way they want to go and in my opinion that direction is South.
Above is a daily chart of the S&P500 and as you can see the short term uptrend has been broken today. The MACD in the lower panel has crossed lower
The Euro Has Turned The Corner
The Euro gapped lower today after failing to push above resistance last week. The MACD in the lower panel has crossed downward triggering a sell signal from an overbought condition. Being that the major trend for the Euro is down, I am looking for this currency to test the lows from last June.
Apple Inc. (AAPL) - Levels To Watch
For the past 15 trading days Apple Inc.(AAPL) has been relatively quiet as can be seen by the falling ATR (average true range) line in the lower panel. I'm a little concerned that AAPL has not participated in the recent market advance and is actually showing signs of relative weakness. It is however possible that the stock is just resting or consolidating before it makes its next move up.
Quite
Stock Market Update
The short term trend in the stock market is clearly up as can be seen by the rising trendline in the above chart. The S&P is now testing resistance at 1130 which was the high from last June.
Two consecutive closes above 1130 would be bullish in my opinion for stocks while 2 consecutive closes below the trendline would be bearish. I guess you can say the S&P is at a crossroads so we'll let the
Summer Vacation
I'm doing some traveling over the next few weeks so I will not be updating this blog. I should be back some time in early August. Until then good luck trading and enjoy the rest of the summer!
Resistance Holds As Stocks Sell Off
If you read my previous post from the other day, you would know that the stock market was at key resistance while also being in an overbought condition. When we have this kind of situation, the market usually (but not always) sells off and that is exactly what we saw happen today.
Stock indices were down sharply today with financial stocks getting hit the hardest. Volume increased today which
Stocks Test Their 50 Day Moving Average
Over the past 2 weeks, the stock market has been enjoying a nice rally but is now testing a critical level. All of the major indices are now testing their 50 day moving average which has acted as resistance since the flash crash in early May.
The stochastic indicator is now in overbought territory which means the market may be due for a move back down. Since April the S&P as well as the rest of
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