Normally the Monday after options expiration is a low volume down day. We got the low volume, but in an abnormal market, we went even further up. Conservatively I have 1425 as the top of this range, and liberally I have about 1460 as the top. Neither might be, as it seems to me that on this leg up, we are seeing selling into strength. If it weren't for AAPL and it's 31 million shares traded, the volume would have been overwhelmingly down today. While we had plenty of stocks advancing today, very few were leading stocks and none of the breakouts were. Most of the strongest stocks in the market were stocks that were among the weakest going into January. That is not where the big money boys go: they are sitting in stocks like AAPL preparing to sell to the CNBC suckers. Things could change tomorrow, and the boys start buying again, but so far I see no signs of it.
The price relative line on the Nasdaq is once again at a new high, and we are seeing the Nasdaq start leading again. If that is the case, there will be plenty of strength to sell into. Notice that here CMF is not rising despite a pretty hefty move off the last pullback. Maybe it means nothing (CMF is not a terribly reliable indicator), but I doubt it.
Price relative on the Dow has now resumed it's down trend, another bullish indicator. CMF, however, is also dropping, and ATR has dropped to such an extreme low level that it is starting to indicate a dangerous level of complacency. If I was an options trader, I would be loading up on out of the money puts - cheap and at this point probably not that risky.
The Russell 2000 broke out of it's range, which is about the only positive thing I can say here. The price relative line is again trending sideways, which is not a negative, but not what you want to see after a nearly two week rally. This also shows a lack of buying pressure on the way up (I hate using volume on an ETF as a proxy, but with the Russell 2000 you don't have a choice), and despite the new high, looks like it is hitting resistance here. This isn't nearly as bullish as a breakout might suggest.
AAPL is almost single handedly holding up this market, and that won't go on forever. In fact, I think it is going to stop very soon.
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.