Stock Market Battle Royale: Regime Change Or A Big, Bad Bubble? – Above the 40 (January 26, 2021)

Stock Market Commentary After the stock market ended its last overbought period, I hesitated to drop my short-term trading call back to bearish. Three days later and the market has yet to snap back into overbought trading conditions. As the major indices levitate, my favorite breadth indicator, AT40 (T2108), the percentage of stocks trading above … Read more

How to Understand the Price Action From Stock Offerings

A stock offering is an opportunity for a publicly traded company to raise money for corporate investment, strengthening the balance sheet, and/or funding operations. Insider shareholders can also sell their shares to the public through a stock offering. Like any seller, these parties want to maximize the money generated from the stock sales. As a … Read more

Stocks Jumped and Never Looked Back As A New Administration Began – Above the 40 (January 20, 2021)

Stock Market Commentary The Presidential inauguration is a hallowed American tradition. The stock market celebrated the incoming Biden and Harris administration with new all-time highs on good trading volume. The start of a new American administration is as good a time as any to back down from my recent short-term bearish call. While this overbought … Read more

Stocks Hold A Tenuous Grip On Overbought Trading Conditions – Above the 40 (January 15, 2021)

Stock Market Commentary A liquidity-driven bounce off support took a small breather last week. The major stock market indices ended the week with a small loss. On the way there, overbought trading conditions ended for a day. As the major indices languished, the stock market dipped in and out of overbought conditions on an intraday … Read more

General Motors Stock: The Bollinger Bands Drop Before the BrightDrop

The General Motors Company (GM) launched sharply higher out of a Bollinger Band squeeze.

Bollinger Bands (BBs) are a powerful trading tool. They define an expected range of volatility in a stock based on recent price action. When that volatility contracts, the Bollinger Bands squeeze into a narrow channel. The resolution of that squeeze – to the upside or downside – can create a powerful continuation of or change … Read more

Overbought Period Demonstrates Freshly Bullish Sentiment for Stocks – Above the 40 (January 8, 2021)

Stock Market Commentary What a week to start the year’s trading. It started with a definitively bearish end to extended overbought conditions. Overbought conditions bullishly resumed in the middle of the week despite an insurrection in Washington D.C. The week ended with a confirmation of the freshly bullish sentiment in the market. The trading action … Read more

Weakening Overbought Conditions Greet the New Year – Above the 40 (December 31, 2020)

Stock Market Commentary The extended overbought period still looks tenuous. For the second trading day in a row, AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), broke down below the overbought threshold of 70% before closing at 73.0%. The major indices do not reveal these weakening overbought conditions. The … Read more

An Extended Overbought Rally Moves Into Historic Territory (Above the 40) – December 18, 2020

Stock Market Commentary The Federal Reserve signaled an incremental improvement in its economic outlook by making an allowance for limited stock repurchases and dividends by the country’s top financial institutions. As a result, bank stocks apparently soared in after hours trading. That fresh rally in financials should extend to a positive open on Monday and … Read more

Key Overbought Threshold for the Stock Market In Time for the Holidays – Above the 40 (December 11, 2020)

Stock Market Commentary A week ago, the stock market stretched into an extended overbought rally. The stock market proceeded to relax from that stretch. Yet, the breadth indicators barely budged and allowed the overbought rally to reach a key overbought threshold and test of the extended overbought rally. The overbought period reached 20 days in … Read more

The Stock Market Stretches Into An Extended Overbought Rally – Above the 40 (December 4, 2020)

Stock Market Statistics AT40 = 79.6% of stocks are trading above their respective 40-day moving averages (DMAs) (Day #10 overbought) AT200 = 77.7% of stocks are trading above their respective 200DMAs (7 1/2 year high) VIX = 20.8 Short-term Trading Call: neutral Stock Market Commentary A week ago, the overbought stock market stretched for a … Read more