Category Archives: Forecasts

Calm Before the Storm

On Thursday October 3rd, the percentage of S&P 500 stocks fell below 10-day moving average reached 3.39%, which was an extreme oversold condition.  The market bounced immediately after the extreme condition was met briefly, but with weak volume on all indices.  The administration was leaking trade talk hope while the market was rallying on Friday morning.

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S&P 500 Cash Index Cycle Location 09272019

Last Friday there were news about the administration considering delisting the Chinese stocks.  The market  sold off immediately, but it managed to climb back off the lows around 3pm.  The market has been really resilient against the headline risks in September.  Is it the calm before the storm or is it because the funds are being considerate of the quarter end closing?

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Technical Rotation or Breakout?

In the last few weeks, value stocks have out performed the momentum growth stocks.  The rallies in value stocks made an appearance of a healthier looking market.  With a broader participation, is the market ready for a breakout? Or is this a purely technical rotation?

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Follow the Price Action

Since August, we have been bearish expecting the market correction to run its course until sometime in October.  But the market had shown abnormal strength in the first nine trading days in September.  Because of the abnormal price action, we sent out private email notes on September 11th, which outlined the possibility that the correction bottom (early August low) might be in already.

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What to Expect from the Second Half 0f 2019?

The last trading week of August was equally painful for the bears and bulls.  The market closed the volatile month of August in a neutral position, which means the immediate trend in motion may see follow-through into September.  The pivot range (2985-3004) of the S&P 500 cash index  for the second half of 2019 is calculated from the high, low and close of the first ten trading days of July.  S&P 500 index 2985-3004 price level will serve as the resistance for the second half of 2019. 

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