9/30/2015

Time and churn



If the market is going to put bottom in this correction , it will require some time and lots of range bound action.

As of now we are in just first leg of correction in many recent leaders.  Many will have more downside.

As of now breadth trends are approaching extremely bearish readings and so a short term bounce is likely.


9/29/2015

Brutal Day for stocks


Brutal day for stocks. 840 stocks were down 4% plus on volume surge. This kind of selling days happen rarely.

Stocks that were holding up well so far have also been dented yesterday by a brutal selling phase. that likely indicate  we might have more downside ahead in this round of correction.

As I said yesterday periodic bearish phases are good as it washes out excessive bullishness and creates condition for new crop of leaders to emerge.

The key to prospering and surviving in market is to play get defense and during conditions like these it becomes even more critical. If you have not lost money during this correction and grown your account then you are in good shape.

Many just end up giving up all their gains and get frustrated. Developing situational awareness is key skill to survive in his game. It allows you to quickly change your risk and approach depending on ever changing market conditions. You start to appreciate the importance of that skills as you trade more.

One of the ways to develop good situational awareness skill is by tracking breadth trends. Breadth can tell you when to press the pedal and when to ease off. It can warn you of impending trouble.

Follow Stockbee on Facebook

9/28/2015

Stocks setting up for 8% to 20% move



Regular market corrections are facts of life. They are good for markets as excess speculation ends and new set of stocks emerge once correction is over.

Due to extraordinary Fed stimulus in last couple of years we have  not had major corrections. We might be in the midst of one now.

Market seems to be on path of revisiting recent lows. There has been thinning of leadership and now many long term winners are breaking down.

Most corrections in market tends to be short term in duration terms so likely we might get end of the year rally once this correction plays itself out . 

9/22/2015

Some improvement in breadth


The big drop in August is now few weeks old and  during that drop breadth reached extremely negative territory. You can see that in Number of stocks up 25% in a quarter, those readings reached a low of 179 on 24th August. Readings below 200 are rare and indicate extreme bearishness.

Sine then there has not been any sustained big selling . Many stocks have bounced back on weak action.  For a new trend to establish a big and sustained buying pressure is needed. Absent that   we might get volatile range bound action. 

9/16/2015

Anticipation Setups for today.

Market is setting up for a big move in either direction currently. Stocks are setting up on both bullish and bearish side.

Bullish Anticipation Candidates

LPCN ANAC HRTX RARE ADPT SUPN PLPM TAST RXDX CAM HCKT USCR FIX TWOU NEO AMWD JAKK AMZN ADHD STMP HLF HW

Bearish Anticipation Candidates

PBYI POWI ISIS CUDA MAR GM SM FSL LLTC BEAV BIIB SNDK NGLS KSS

9/14/2015

Avoid the chop

A long due correction of 8 % plus is happening .  Markets were going up for almost 2 years without a 10% correction. Now we are in the midst of one.

Currently market in holding pattern in volatile range.   This volatile range can break to either side, but based on underlying setups showing up in my scans , it as of now looks like we might breakout to the upside. Before that the recent low might be undercut to shake out weak hands. 
Some signs of buying appearing in biotech and other stocks in recent days.
Market is setting up for possible last quarter rally.
At this stage playing conservatively is key. If you protect capital good buy opportunity might be ahead.
Avoid the chop.

9/01/2015

Situational awareness

A "V" shaped recovery was many people's expectation. But that was lower probability event. What we are likely to get is test , retest and sideways move till stock setup for either bullish or bearish move.
Stocks and sectors leading this bull move for last 3 years have one by one cracked. Only few large cap stocks are still holding up relatively well.
Sectors that break down initially attract dip buyers and show some life , but if buyers do not show up the rally quickly fades. That has happened to many sectors.