Price Time Volume Investing

I have dueling scenarios. The Dow 1929 Crash versus the Nasdaq 2000 Crash shows about six more months up and another 30% up in price.

The second scenario is the unfinished business of the a move to the 1×4 ascending angle which brings SPX 650 into play.

There is the possibility that both scenarios will play out. The market can continue up to 60% off the low (near 1200) and then back down to the 1×4 angle.

Odds and Ends:

• Record short interest has been covered.  No more dynamite under the market with crazy buyers.
• COT professionals lightened up their over 100k net short position on expiration in December.  The net short position remains substantial (though less than before) while the net long of dumb retail is high.
• The market is not completely overbought yet, but is getting closer each day we move higher. Eventually, price will need several weeks of consolidation (at the minimum) to work off the stretched market internals.  The downside case is a continuation of the last year where the market sells off hard when overbought.

Recap of recent posts:

• Industries Leading in the New Year
• Rally Day 28 And Below SPX 1044
• Revisit Roadmap - Dow 1929 Versus Nasdaq 2000
• End of Year US Stock Losses
• United States Oil Fund Finds Many Buyers
• Chinese Markets Also Look Weak
• West Texas Crude Losing Short Term Momentum
• Another Look At Apple Computer
• Was the 2002-2008 Move Really Inflation?
• GOOG is Weak in the Long Term
• Additional Market Index Swing Charts
• SPX Swing Charts in a Weak Position

Tags:   Dow Jones Industrial Average · Market Outlook · Standard and Poor's 500 (SP500)6 Comments

The following industries have the highest aggregate relative strength.  Stocks from these industries will be the leaders if the market continues upward.

Appliances, Major Airlines, Surety & Title Insurance, Regional Airlines, Home Health Care, Music & Video Stores, Drug Related Products, Gold, Silver, Cigarettes, Trucks & Other Vehicles, Auto Parts Stores, Healthcare Information Service, Farm Products, Long Distance Carriers, Building Materials Wholesale, Biotechnology, Drug Manufacturers - Other, Medical Practitioners, Drug Manufacturers - Major, Property & Casualty Insurance, Education & Training Services, Technical Services, “Discount,  Variety Stores”, Water Utilities, Beverages - Soft Drinks, Home Improvement Stores, Internet Service Providers, Grocery Stores, Aerospace/Defense Major Dive, Diagnostic Substances, Drugs - Generic, Drug Stores, Drug Delivery

The following industries have the lowest aggregate relative strength.  Stocks from these industries should be avoided regardless of the strength of the individual stock chart.

Oil & Gas Drilling & Exploration, Jewelry Stores, Oil & Gas Equipment & Services, Textile Manufacturing, Broadcasting - TV, Recreational Vehicles, Independent Oil & Gas, Housewares & Accessories, REIT - Hotel/Motel, “Recreational Goods,  Other”, Pollution & Treatment Controls, Department Stores, Resorts & Casinos, Advertising Services, Farm & Construction Machinery, Manufactured Housing, Property Management/Development, Multimedia & Graphics Software, Data Storage Devices, Auto Parts, Marketing Services, Diversified Computer Systems, Specialty Chemicals, Industrial Metals & Minerals, Metal Fabrication, Steel & Iron, Publishing - Periodicals/News, Entertainment - Diversified, Electronic Equipment, Sporting Activities, Textile - Apparel Clothing, Oil & Gas Refining & Marketing, Sporting Goods, Semiconductor - Specialized

And finally, this is a link to a list of the top stocks for each industry. The industries are sorted by aggregate relative strength.

Tags:   Market Internals4 Comments

Today was day 28 of the rally (28 trading days and 42 calendar days). Volume was low as many on Wallstreet did what I did and took a day off to extend the holiday into next Monday. Because the move continued beyond 12 and 23 trading days, I assume it will last at least 90 calendar days - which is February 19th. The odds favor a 90 day move but that does not mean it is guaranteed. Price will do what it wants to do.

The market has some room to move up before becoming completely overbought. I doubt it will go into mid-February without working off an eventual overbought condition. This means we need to watch the correction and price should not exceed the November 23rd low. If it does then SPX 650 will most certainly hit.

Charts courtesy of Stockcharts.com

Tags:   Advance-Decline · Standard and Poor's 500 (SP500)No Comments.