Taking Stock - weeks of Oct 5 to October 16, 2020

Monday, October 5, 2020

Green Arrow Up

DJI30 Index at the close —-   28,148.64   +465.83 (+1.68%)

The index opened at  27,825.42, up 143 points. It immediately rose to 27965, and reached 28080 before 11:00.  From there it was more or less sideways until 2:00. It rose  to 20146 at 3:15, and went sideways the last 45 minutes, hitting the hi of 28163 a few minutes before the close. The lo to hi span was 337 points.

This is a clearly up day with the hi, lo and close up by 301, 442, and 456 points, respectively.  Last Wednesday I cited passing 28356 as the first key indicator that the market is trending up.   That’s a only a little less than 200 points above today’s hi.

But until that happens there is still no clear direction.  I’m hoping we’ll get that this week.

Closings -

10/05/18 - 26447

01/02/20 - 28668

09/05/20 - 27501

10/05 20 - 28249

NYSE Internals -

A/D = 2290/773 = 2.96

A/D vol = 4.35

New Hi/Lo = 119/22 = 5.41

Tuesday, 10/6/20

Red Arrow Down

DJI30 Index at the close   —-    27,772.76-   375.88 (-1.34%)

The index opened at 28214, up 66 points.  It went mostly sideways with a slight upward tilt until 2:00 when it turned up, reaching the hi of 28354 at 2:45. It then went into a straight verbal drop, hitting 27810 about 20 minutes later - a bone crushing collapse of 544 points.  And that wasn’t even the lo.  The index bottomed at 27728 at 3:07, then rattled into the close, 45 points higher. The SP500, Russell 2000 and NASDAQ also took hard falls at exactly the same time.  I’m seeing this blamed on trump’s refusal to consider a stimulus bill put forward by the House.  But how can anyone be surprised?

I just read these words yesterday. [link in comments]

“So, when I see many pundits pointing to the decline we experienced on Friday as being caused by the announcement that our President contracted the coronavirus, I simply view it as a catalyst to move the market in the manner in which it was predisposed to move at the close on Thursday”

It’s the same today.  trump’s refusal to do what is right and needed for our country might indeed have given the markets the nudge they needed to fall.  All of them moving in lockstep at the exact same time supports this view.  But such a reaction would be ephemeral.  If the market continues to fall the rest of the week, it will be because it was on the verge of falling anyway, not because of whatever occupant 45 says or does.

This is an outside day, with the hi and low far beyond yesterday’s 337 points by wide margins at both ends. Today’s span was 626.

Remember, I said passing above 28356 was a benchmark for a rising trend.  The index came within a couple points of that level, did a hard bounce, and fell like a rock.  Today’s low and close are in the range of where they were on Thursday, so the drop might not mean anything. This could simply be a continuation of sideways motion.  And getting rejected at a resistance level doesn’t mean there can’t be a break through on a second or third try.

So - today was dramatic, but a lot less meaningful than it might seem at first look.

Closings - 

10/05/18 - 26447

01/02/20 - 28869

08/04/20 - 27662

09/06/20 - 27773

NYSE Internals -

A/D = 1163/1869 = 0.62

A/D Vol = 0,37 

New Hi/Lo = 148/18 = 8.22

Wednesday, October 7, 2020

Daily Arrow - Green, Up

Weekly Arrow - Yellow, Sideways

DJI30 index at the close   —-   28,303.46   +530.70 (+1.91%)

The Index opened at 27972, up 98 points, and immediately jumped up to 28100.  By 10:30 it reached 28200, and ran sideways near that level until 1:45.  By 2:30 it was above 28300.  It reached the hi of 28370 at 3:10 before sliding into the close.  The lo to hi span was 398 points.

This is a clearly up day, with the hi, lo and close up by 15 [!], 239 and 531, respectively.

The hi exceeded the benchmark level of 28356 by 14 points, or 0.05%.  Yesterday there was a hard bounce from that level.  Today the Index challenged it again, and slid slowly back - only by a little.  I said, “getting rejected at a resistance level doesn’t mean there can’t be a break through on a second or third try.”  Well, today we had a second try, and a second rejection.  But the rejection was soft, the Index is lurking close to that benchmark level; and it wouldn’t take much of a surge to get above it tomorrow.

Stay tuned because — who know?

Closings -

10/05/18 - 26447

01/02/20 - 28869

09/04/20 - 28133

10/07/20 - 28303

NYSE Internals -

A/D = 2219/817 = 2.72

A/D Vol = 4.81

New Hi/Lo = 137/23 - 5.96

Thursday, October 8, 2020

Green Arrow Up, a little

DJI30 Index at the close   —-   28,425.51   +122.05 (+0.43%)

The Index opened at 28349, up 45 points, and quickly rose to 28432.  There was a choppy rise to the hi of 28459 between 10:30 and 11:00.  Then there was a tumbling drop to the low of 28335 before 11:30.  It rose to 28400 over the next hour, then went mostly sideways the rest of the day.

This was a clearly up day, with the hi, lo and close up by 89, 364, and 122 points, respectively.  The majority of this was at the low end of the range, and the day’s lo to hi range was a surprisingly narrow 124 points.  This is the smallest span since 84 points on January 17th, back when various aspects of life seemed to make some sort of sense.

Todays action was the 3rd time in 3 days that the index challenged the benchmark level of 28365, the hi from September 16, which I previously reported as 28356; sorry for the typo. This level is now indicated with a red line on the chart.  Today’s hi exceeded it by 94 points - immediately followed by a drop of 124: the day’s entire span in about an hour.  You don’t often get a third bite at the cherry.  But today’s effort was a success - though of a rather tepid sort.  The day’s range surrounds the benchmark level, and the hi was only 60 points above it [0.21%.]  So the question of whether the market is really going up to approach the Feb 12 hi remains unanswered.

Tomorrow ought to tell us something, but I’ve been thinking that for quite a few days now.

Closings -

10/08/18 - 26487

01/02/20 - 28869 

09/04/20 - 28133

10/08/20 - 28426

NYSE Internals -

A/D = 2313/723 = 3.2

A/D Vol = 6.44

NewHi/Lo = 162/14 = 11.57

Friday, 10/09/20

Green Arrow Up

DJI30 Index at the close   —-   28,586.90   +161.39 (+0.57%)

The Index opened at 28534, up 106 points.  It quickly rose to 28590, then slumped to the day’s lo, 28441, before 10:30.  It hit the hi of 28676, up 251, just after noon, and then made a slow descending 90 point slide into the close.   The lo to hi span was 236 points, almost twice yesterday’s 124, but far under the 10 day average of 371. Except for yesterday, this is the narrowest span since 222 points on 8/18.  

The market is rising.  This is another clearly up day, with the hi, lo and close up by 217, 106 and 161 points, respectively.  These are solid, but not strong numbers, and a gain of just over a half percent is rather tepid.  But short term moment is clearly up, for now.

The close is 221 points above the benchmark level of 29365 - so that challenge for a rising market has finally been met.  The next test will be the 9/03 hi of 29199 [indicated with a red line,] only 613 points above today’s close.

Closings -

10/10/18 - 25599

01/02/20 - 28869

09/09/20 - 27705

10/09/20 - 28567

NYSE Internals -  A/D and A/D vol are neutral.

A/D = 1544/1464 = 1.05

A/D Vol = 1.00

New Hi/Lo = 178/17 -10.47

Monday 10/12/20

Green Arrow Up

DJI30 Index at the close   —-   28,837.52   +250.62 (+0.88%)

The Index opened at 28671, up 84 points, and immediately hit 28690.  It kept climbing and hit the hi of 28958 at 1:30.  From there it slid 120 points into the close. The lo to hi span was 298 points.

In the 12 trading days since the local lo on 9/24, there have only been 3 down days. The largest of them, at -1.30%, was a brief response to occupant 45’s admission that he had CV-19.  On 5 of those days, the gain was between 1.20% and 1.91%; the largest of those happening the day after the CV incident.

This has been a fairly orderly rise in a well-defined channel.  But a gain of 2300 points, or 8.58 %, in 12 days hints at irrational exuberance.  The Index, at today’s hi, was briefly positive for the year, for only the 2nd time since 2/21.  But the 120 point drop in the last 2 1/2 hours brought it back below that level by 31 points.

The 9/03 hi of 29199, only 361 points above today’s close, now seems within reach. From there it is not very far to 29569, the all time hi reached on 2/12, and only 69 points above the top of the chart.  

Along with round number resistance at 29000, those are the next critical values to pass if this surge is to continue.  

Closings -

10/12/18 - 25340

01/02/20 - 28868

09/11/20 - 27885

10/12/20 - 28838

NYSE Internals -

A/D = 1859/1170 = 1.59

A/D Vol = 1.64

New Hi/Lo = 190/14 = 13.57

Tuesday, October 13, 2020

Red Arrow Down

DJI30 Index at the close   —-   28,679.81  -157.71 (-0.55%)

The Index opened at 28765, off 73 points.  It zig-zagged in a rapid series of over ten mostly lower lows and highs, hitting the day’s lo of 28604 after 2:30.  It climbed back up to 28760 at 3:30, then fell about 80 points in the last 20 minutes.  The lo to hi span was a rather narrow 205 points.  The 10 session average is 359, down from 500 on 10/01, in a possible sign of growing complacency.

This is a clearly down day, with the hi, lo and close off by the rather modest margins of 149, 55 and 158 points respectively.  These values are well within the rising channel, so there is no reason to think the surge is over yet.  But, it might be getting close. Upward momentum appears to be slowing.

The hi, 28808, occurred in the first half hour of the trading session, and might represent round number resistance at 28800.  The benchmarks I mentioned yesterday, at 29000, 

the 9/03 hi of 29199, and the all time hi of 29569 are still all within sight - if the Index can get there.

Closings -

10/11/18 - 25053

01/02/20 - 28869

09/11/20 - 27666

10/13/20 - 28690

Internals -

A/D = 998/2048 = 0.49

A/D Vol = 0.31

New Hi/Lo = 100/17 = 5.88

Wednesday, October 14, 2020

Red Arrow down

DJI30 Index at the close   —-   28,514.00   -165.81 (-0.58%)

The index opened at 28731, up 51 points.  Within 20 minutes it rose to 28793, the hi of the day, up 113 points.  From there it was a 331 point drop to 28462, the day’s lo, before 12:30. There were 3 more rises, punctuated by drops below 28500, with the last and highest of them reaching 28590 after 3:00.  It was followed by a 76 point fall into the close.

This is basically a continuation of yesterday’s choppy decline.  The lo and close, only 52 points apart, ended up right at the bottom of the current up-slanting channel.  This does not indicate that the surge is over.  If this surge is an impulse, today’s lo might be the end of wave 4.  In this scenario, wave 1 was the 1324 point rise from the 9/24 lo to the 10/2 hi.  Wave 2 was the 478 point drop [36.1% retrace] to the 10/2 lo.  Wave 3 was the 1575 point rise from the 10/2 lo to the 10/12 hi.  If today’s lo is the end of wave 4, then the 496 point loss from the 10/12 hi is a 31.5% retracement.  Then wave 5, ahead of us, would likely be another gain of 1300 points or more.  That would land near 29760, about 200 points above the 2/12 all time hi of 25969

Alternatively, wave 3 could still be unfolding.  If that is the case, the outlook is even more bullish.

The other alternative is that this surge is over, and the next wave down is about to start.  A sharp decline tomorrow would be consistent with this possibility.  A rise above the 9/12 hi would refute it.

Closings -

10/12/18 - 25340

01/02/20 - 28869

09/14/20 - 27993

10/14/20 - 28514

NYSE Internals -

A/D = 1186/1859 = 0.64

A/D Vol = 0.78

New Hi/Lo = 88/19 = 4.63

Thursday, October 15, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   28,494.20   -19.80 (-0.07%)

The Index opened at 28323, off 190 points, and immediately dropped to 28182, off 332.  By 10:00 it recovered to 28356, off 158.  After a drop to 28240 it rose to 28400 before 11:30.  From there it ran sideways until 1:00, then climbed slowly to the high of 28534 after 3:30, the hi for the day, and at plus 22, the only bob into positive territory.  From there it was a 42 point fall into the close.  The span was 354 points, the largest since last Wednesday.

After a sharp drop at the onset, the Index climbed pretty steadily the rest of the day.  The lo dropped outside the up-slanting channel, but the hi and close were right at the lower border.  So the drop from Tuesday’s hi might be done.  Or not.  Today’s action was more confusing than clarifying. 

I see predictions of a drop of uncertain magnitude followed by a strong rise into new highs next year and beyond.  Contra that is the idea that the effects of CV-19 on the underlying economy will be a strong and long lasting head wind.  Unemployment is still hi, millions of families might be facing eviction, and thousands of businesses that have closed or cut back might never recover.  But the indexes are disconnected from the economy, over-valued and over-bought.

Closings -

10/12/18 - 25340

01/02/20 - 28869

09/14/20 - 27993

10/14/20 - 28494

NYSE Internals - 

A/D = 1707/1327 = 1.29

A/D Vol = 1.64

New Hi/Lo = 73/20 = 3.65

Friday, Oct. 16, 2020

Green Arrow Up - a bit

DJI30 Index at the close   —-   28,606.31   +112.11 (+0.39%)

The Index opened at 28571, up 77 points, and within minutes reached 28694, up 199.  It went on to the hi of 28843, up 349 at 10:30.  From there it was a slow slide to the lo at 58571 shortly after noon.  It went sideways until 1:00, then slowly rose to 28780 at 3:00 pm, followed by a 174 point fall into the close. 

This is a clearly up day, with the hi, lo and close higher by 307, 389 and 112 points, respectively.  The lo to hi span was a rather modest 272 points.  

This would have been a healthy gain at the day’s hi, but with the slump in the last half hour it wound up at only a tepid 0.4%. The hi just barely got back inside the up-slanting channel, which has a pretty steep rise, but the low and close stayed outside.  So the net of this week is that the Index went nowhere, with values located above last Friday’s lo, but below this Monday’s hi.

Whether this is a sideways move before another increase or a top formation that precedes a decline is difficult to discern.  Momentum is still up, but might be losing steam.  Despite my frustrations, the Index refuses to give a clear indication of where it is headed.

Closings -

10/16/18 - 25798

01/02/20 - 28869

09/16/20 - 28022

10/16/20 - 28571

NYSE Internals -

A/D = 1245/1785 = .70

A/D Vol = 437/434 = 1.01

New Hi/Lo = 122/9 = 13.56