Category Archives: Hot Stocks

The DOW Cycle Location 11/02/2018

In the last five trading days, the DOW was able to produce a relief rally that retraced half of the shock drop from 26951.81 to 24122.23.  But the S&P 500 and Nasdaq were unable to retrace 50% and the small cap couldn’t even retrace 38% of the down move.  Overall the market is weak and it is being popped up by the blue chips.  Apple’s earnings report has revealed that Apple is no longer the hyper growth company like it used to be.   Amazon’s 28% selloff from 2050.50 to 1476.36 also points to the difference of this correction relative to all the corrections since March 2009.

It would be enticing to try to buy the prior bull market leaders during this correction, getting a discount of the old expensive stocks.  But the fact is that many growth leaders in one cycle do not repeat in the next cycle.  For example, the dotcom leader Cisco never came back as a market leader even after 18 years.  We believe this October high is an import high that signifies the end of a super easy money policy.  The market will need some time to heal from the structural damage.  The October low will be tested again sometime in the future.

It will worth a while to sit out the market to observe future leaders before the market cycle low is confirmed.  There will be many stocks that will have super earnings growth but the stock price will not advance due to the general market weaknesses.  Those stocks are the candidates for the next bull market cycle.

Technically, the DOW was supported by the lower channel line while S&P 500 and Nasdaq have violated their lower channel lines respectively.  It has only been one week since the low was made.  It is way too soon to say that the temporary low is in place and the year end rally will start from here, although it is likely due to the timing with the midterm elections.

You need to login to view the rest of the content. Please . Not a Member? Join Us

Read more ...

A Rare High Tight Flag Situation

As we have stated before that the market is in a 4-year cycle high to low correction phase, we shouldn’t open new long positions.  But we do have a rare high tight flag situation that warrants your consideration.  This formation is so rare that had succeeded several times in the past during the market downturns.

You need to login to view the rest of the content. Please . Not a Member? Join Us

Read more ...

The DOW Cycle Location 10/05/2018

Finally the DOW made an outside reversal week on 10/05/2018.  This is the start of the seasonal correction.  It is 14 weeks into the current weekly cycle that was started on the week of 06/29/2018.  This correction against the January 2018 high does appear to be a selling off of a double top.  

You need to login to view the rest of the content. Please . Not a Member? Join Us

Read more ...

Trade Alert 10012018

The market continues to be resilient.  The DOW had an inside bar last week on the 13th bar.  The cycle oscillators are turning down signaling an upcoming mild correction.  Underneath the general market, the banks and housing sectors are really weak. 

You need to login to view the rest of the content. Please . Not a Member? Join Us

Read more ...

Small Caps Are Breaking Out

While the Nasdaq took a little break last week, the S&P 500 and DOW were charging ahead despite this and that scary headlines.  Underneath the toppy looking indices, there are great many small caps are breaking out and entering a fast growing phase.

You need to login to view the rest of the content. Please . Not a Member? Join Us

Read more ...