How to Protect Gains After Surviving A Stock Market Sell-Off

The stock market crash in March was stomach-churning and generated a lot of panic. At its lowest point, the S&P 500 (SPY) was down 33.9% from its all-time high set just the previous month. The rebound from that stock market sell-off has been heroic with a 32.1% gain taking the index within another 14.6% rally … Read more

A Trade War Truce Defies the Bad News Narrative for Rate Cuts – Above the 40 (June 28, 2019)

AT40 = 60.0% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 52.4% of stocks are trading above their respective 200DMAsVIX = 15.1Short-term Trading Call: neutral Stock Market Commentary Trade War The search for news bad enough to convince the Federal Reserve to cut rates continues. The weekend began with news … Read more

Above the 40 (January 18, 2019) – Index Breakouts Propel the Stock Market Into Overbought Territory

AT40 = 76.3% of stocks are trading above their respective 40-day moving averages (DMAs) (1st day overbought)AT200 = 27.4% of stocks are trading above their respective 200DMAs (6-week high)VIX = 17.8Short-term Trading Call: cautiously bullish Commentary I noted in my last post that the signs of exhaustion in the major indices gave way to more … Read more

Above the 40 (December 24, 2018) – Oversold Chronicles: An Epic Reversal, Historic Depths, and an End to Hubris

AT40 = 3.6% of stocks are trading above their respective 40-day moving averages (DMAs) (oversold day #7, 10-year low!)AT200 = 8.0% of stocks are trading above their respective 200DMAs (9 1/2- year low!)VIX = 36.1 (1-day gain of 20.0%, 10 1/2- month high)Short-term Trading Call: bullish (oh so many caveats below!) Commentary Although it’s been … Read more

S&P 500: A Critical Juncture Amid Historically Bad Milestones

It seems like the odds favor a strong bounce to close the year if only to bring the December drawdown a little closer to historic norms. At least the timing would be right given deep oversold trading conditions. Of course, a “reversion to the mean” is not reason enough to expect a strong year-end rally. … Read more

Above the 40 (October 31, 2018) – Small Bearish Divergence Extends Oversold Period Despite Rallies

AT40 = 16.1% of stocks are trading above their respective 40-day moving averages (DMAs) (as high as 19.95%) – 11th day of oversold period following 4-day oversold period AT200 = 29.6% of stocks are trading above their respective 200DMAs VIX = 21.2 Short-term Trading Call: bullish Commentary The push out of oversold conditions did not … Read more

Above the 40 (October 29, 2018) – The Extended Oversold Period Finally Delivers A Bullish Divergence

AT40 = 11.9% of stocks are trading above their respective 40-day moving averages (DMAs) – (as high as 15.6%) 9th day of oversold period following 4-day oversold period AT200 = 25.4% of stocks are trading above their respective 200DMAs (as high as 29.3%) VIX = 24.7 (as high as 27.9) Short-term Trading Call: bullish Commentary … Read more

Above the 40 (October 26, 2018) – Yo-Yo Trading Action Takes the S&P 500 Closer to Declining 200DMA Signal

AT40 = 9.7% of stocks are trading above their respective 40-day moving averages (DMAs) – (as low as 7.6%) 8th day of oversold period following 4-day oversold period AT200 = 25.2% of stocks are trading above their respective 200DMAs (as low as 22.5%) VIX = 24.2 (as high as 27.5) Short-term Trading Call: bullish Commentary … Read more