I am quite short of time so I'm putting up only the SPX charts, which are, to say the least, quite important. I set a target here that I thought was the most probable top of the current rally, and we did hit it today, almost exactly. The timing, however, is way off, as I did not expect it to be hit until around mid July. The implications of that are that we may be looking at a completely different scenario than I was looking at at the beginning of the week. About now we should expect a pullback, but as of this point I don't think we are going to get another massive down leg, at least not yet.
The main reason for my change of outlook here is the sheer size of the weekly gain. If you look at the last 3 years, weekly gains this size come at the bottom of corrections, as this one did, and have led to sizeable rallies. This one has a big difference: it comes on low volume, which might mean that a rally after this one might not be as strong. One thing is certain: another sizeable leg down in this correction is now unlikely, for at least a month, probably longer. If we follow the advice of John Murphy, however, we trade in the direction of weekly stochastics, which are now undoubtably up.
I don't have the new highs data so I won't be able to put up a new highs post. I do expect to have all my normal weekend posts this weekend.
I am not a financial professional, just a guy that trades my own account.
I am also not a musical professional, just a guy that makes music on the computer. Thus, two blogs, one trading and on musical.
And, no, the picture is not me, it is the late, great John Belushi, one of the inspirations for these blogs.
This blog is focused on technical analysis of stocks and markets, putting heavy emphasis on chart analysis. My trading style is derived primarily from my mentor, William "Yoda" O'Neil, and the focus here is on leading and breakout stocks, but all forms of trading are covered to some extent. Economic and political news that effects the market are also topics here, and the blog may occasionally become a platform for my political and philosophical ranting. I keep several spreadsheets on Google docs which track various aspects of the market and readers are welcome to vies and comment on them.
Google Docs Spreadsheets
There are several spreadsheet that I maintain on Google docs to track various watchlists and trends in the market.
1. The earnings list - a group of small and micro cap, low float stocks that have exhibited recent rapid earnings growth. They are modeled along the lines of William O'Neil's CAN SLIM system, but limited to small cap, highly volatile stocks.
2. The relative strength list - a group of stocks which are near 52 week highs and have shown an increase in average daily volume. The list is limited to the top 200 stocks according to my methodology, which will be detailed on one of the pages of the spreadsheet.
It can be accessed here, and is also updates weekly.
3. Relative strength by industry - Uses industry data from Finviz.com to track the percentage of stocks within each industry that are in the top 25% of the 52 week price range, looking for trends.