Weak action continues | stockbee


Weak action continues

The market recovered from the morning Shanghai market inspired drop, but there were no major gains. Dip buyers have been active in this market for sometime and yesterday the China inspired weakness was readily bought.

The action is currently dominated by a narrow group of mega-cap names. The bullish breakout levels has dropped below 100 for few days and stayed in that territory . Month 50% plus had a sharp drop to 4. Nasdaq shows weak action. Most Index corrections in recent years have been lead by Nasdaq diverging from other index.

Overall the market monitor has done a good job of identifying the risk area and I have large cash position. If this proves to be just a correction and once the 50% plus in month level starts accelerating, it will signal aggressiveness.

Market Monitor

Total 4% plus bullish breakouts = 79

Total 4% plus bearish breakouts = 77

65 day bullish/bearish ratio = 865/239

Stocks up 50% or more in a month = 4

Stocks up 25% or more in a month = 65

Number of stocks with 100% plus move = 413

Number of stocks up 200% or more = 87

4% plus signals for 100plus universe = 9

4% plus signals for 200plus universe = 4

Selected Stocks from 100% plus universe with 4% breakout

FARO,Faro Technologies Inc (Google  Yahoo  Earnings  Chart
VC,Visteon Corporation (Google  Yahoo  Earnings  Chart

Both the stock also have low 65 days growth.

Episodic Pivot

IFLO,I-Flow Corp (Google  Yahoo  Earnings  Chart
LRW,Labor Ready Inc (Google  Yahoo  Earnings  Chart
PYX,Playtex Products Inc (Google  Yahoo  Earnings  Chart
RS,Reliance Steel & Alum Co (Google  Yahoo  Earnings  Chart
VMI,Valmont Industries Inc (Google  Yahoo  Earnings  Chart


ybn said...

I thought "Stocks up 50% in a month" low number is bullish. I remember reading in your prior posts that you look to go into cash if this number rises above 20. What am I missing?

Pradeep Bonde said...

Nothing. When number reaches below 3 , rallies tend to last long. Number is approaching that zone. Rallies that last long have 300 plus 4 % breakouts to start. So if we see 300 plus breakout today,it might be start of new leg up. I am ready with cash reserve if that happens. Go back and see when I became cautious and why look at 50% and 25% plus numbers and 65days ratio numbers and compare what happened from then till now. There has been sharp drop in thoe numbers. What was rallying from February low, reached peak some days ago and reversed. So profitable positions acquired during Feb uptrend start got liquidated or stopped out. A new cycle will set up at levels below or around 3 and again cash will be deployed.

The action so far on futures is probably linked to option expiration. Number of breakouts are anemic 22 as of now, in genuine up move they should be very high, so probably market has some time to start up move.