Taking Stock - Tuesday, August 23, 2022 [with updates]

Let's assume that the 6/16 lo in the SP500 index at 3636.87 was the end of a corrective wave from the 1/03 all time high, and that the action since is the beginning of the next impulse wave up to new higher highs.

To confirm this notion will requite identifying a five wave form up from the 6/16 lo. If so, then wave 1 up was a gain of 308.99 points to a local hi at 3945.86 on 6/28. Wave 2 down followed the typical 3 sub-wave down-up-down pattern to a local lo at 3790.38 on 7/14, a retracement of 50.8%.

Then, wave three up terminated at the local hi at 4325.28 on 8/16, and the index is now in wave 4 down.

Retracements are frequently at or near 38.2; 50, or 61.8% of the previous move. The resulting values would be 4120.95; 4057.83; and 3994.71, respectively - indicated with red lines on the chart..

Today's session was almost flat, and the lo at 4129.86 is within 9 points of the 38.2% retracement level.

On the way up in wave 3, the index stalled in a range near 4178 [heavy blue line] a resistance level extending back to March, 2021, when the index was on its way up to the all time hi. Coincidentally, the 144 day exponential moving average [dark purple curve on the graph] is moving through that same range and can contribute to either resistance or support.

On the graph, daily highs are connected with a thin green line, lows in red, and closings in blue. The highs and lows are used In this analysis.

There are three possibilities at this point.

1 - The index is close to completing wave 4 down, and will soon move into wave 5 up, extending beyond the wave 3 hi at 4325.28.

2 - There will be a deeper retracement, probably to another of the typical levels, followed by wave 5 up.

3 - This entire analysis is wrong, and the index will continue to fall below 3636 to new lows.

I think 3 is the least likely, but the picture should clarify over the next several days.

Update - Thursday 8/25

Yesterday's SP500 lo at 4119.97 is within a single point of the .382 retracement level at 4120.85 that I mentioned on Tuesday.

This might just be a coincidence. But if the index climbs from there to close above the 8/16 hi at 4325.28, that will increase confidence that wave 4 is complete, and that wave 5 will continue up to at least 4430 [heavy green line on the chart] and possibly as high as 4650, before the next corrective wave.

Today, it finished at 4200.54, Marginally above the blue line at 4176 - a support/resistance level dating back to April, '21. If it falls back down again, wave 4 is probably still unfolding.

Update Friday 8/26

The market took a hard turn to the downside today.  I mentioned this possibility yesterday, but did not expect it, and certainly not at this magnitude.  The SP500 did a brief zig-zag in the first half hour,  dropped in the next half hour, then slid the rest of the day to finish at the lo.

The lo, 4057.66, is within 34 points of the 50% retracement level at 4023.52.  The chart shows all of wave 3 and the unfolding wave 4

Yesterday, the index peeked above the support/resistance level at 4178, but it could not hold.  This resistance is proving to be more formidable than I thought.

This could still be corrective wave 4, and that will remains my opinion until proven otherwise.  A drop under the 7/17 lo will make this position hard to justify, and a further drop below the 6/16 lo at 3636.87 will negate it completely.

We'll see how it plays out over the next several days.

Taking Stock. Week of May 24, 2021

Monday, May 24, 2021

Green Arrow Up

DJI Index at the close --- 34,393.98 +186.14 (+0.54%)

The Index opened at 33493, up 46 points. It climbed to 43450, up 242 at 11:30, then fell back to 34370 an hour later. It did not go below that level again. Instead, it climbed to the hi of 34473 at 2:15 and hovered near that level for about an hour. It then slumped about 50 points into the close.

This is a clearly up day, with the hi and lo up by 57 and 131 points, respectively. The span was 219.

The SP500 and NASDAQ had similar contours to the DJI. The Russell 2000 had more exaggerated slumps at mid-day and the end. All the indexes had clearly up days, and all remain below their recent lows. The NASDAQ gained the most.

This is the 3rd consecutive clearly up date, by modest margins, and all the indexes are slowly moving above their respective support zones.

That's about it.

% changes -
DJI30 +0.54%
SP500 +0.99%
NASDAQ +1.41%
Russell +0.54%

DJI Closings -
5/24/19 - 25586
5/22/20 - 24995
4/23/21 - 34043
5/24/21 - 34394

NYSE Internals -
A/D = 2174/1153 = 1.89
A/D Vol = 2.02
New Hi/Lo = 202/26 = 7.77

Tuesday, May 25, 2021

Red/Orange Arrow Down

DJI30 index at the close   ---   34,312.46  -81.52 (-0.24%)

The Index opened at at 34429, up 35 points, and quickly rose to 34511, up 117.  It dropped to 34380 before 10:00 and went sideways until after 11:00, when it dropped to a lo of 34313, off 81. It rose to 34460 before 12:30, then dropped again, and kept dropping until it hit the day's lo of 34266, off 128 points, just a few minutes before the close. The trend was down for the entire session.

This was a mixed day: the hi and lo were higher by the small margins of 39 and 12 points, but the close was off by 82.  The span was 245.

All the indexes had roughly similar contours: they started positive, and on the way down coiled around neutral before landing in the red.  The NASDAQ lost the least, and the Russell 2000 lost the most.  The NASDAQ and SP500 also had mixed days, while the the Russell had an outside day.

The DJI, SP500 and NASDAQ are still positive for the week, since yesterday's gains were larger than today's losses.  But the Russell is off 10 points.  And all are below their peaks from earlier in the month or year.  The best anyone can say about any of the indexes is that they are moving sideways.  

% changes -

DJI30 -0.24%

 SP500 -0.21%

NASDAQ -0.03%

Russell -0.97%

DJI Closings -

5/24/19 - 25586

5/22/20 - 24465

4/23/21 - 34043

5/24/21 - 34312

NYSE Internals -

A/D = 1229/2059 = 0.60

A/D Vol = 0.44

New Hi/Lo = 192/26 = 7.38

Wednesday, May 26, 2021

Yellow Arrow Sideways

DJI30 Index at the close   ---   34,323.05 +10.59 (+0.03%)

The index opened at 34336, up 24 points, and quickly jumped up to 34410, up 97.  It then fell, landing at 34271, off 41, at 10:00.  By 11:00 it was back up near the 34410, and then moved mostly sideways until 1:00, when it fell again.  It landed at 34290 at 3:00 and moved mostly sideways, staying below 34325 into the marginally positive close. 

This is an inside day, with the hi lower by 102 points and the low higher by 5.  The span was a surprisingly narrow 138 points – about 40% of yesterday's 347.  The SP500 had a roughly similar contour, and an inside day, but didn't slip as much in the afternoon.  The NASDAQ rose in the morning and ran mostly flat in the afternoon.  It also had an inside day, with the hi lower by a single point.  Russell kept rising all day, gaining almost 2%. It was a clearly up day, but by only a couple of points at both ends. The big gain happened because yesterday's close was near the bottom of the day's range, while today's close was near the top.

All of the indexes have been moving sideways for the last several weeks (DJI and SP500) or months (NASDAQ and Russell.)  I'm going to guess that these moves are counter-current in a bull market that has not yet completely spent itself.

% changes -

DJI30 +0.03%

SP500 +0.19%

NASDAQ +0.59%

Russell +1.97%

DJI Closings -

5/24/19 - 25586

5/26/20 - 24995

4/26/21 - 33985

5/26/21 - 34323

NYSE Internals -

A/D = 2257/1082 = 2.09

A/D Vol = 3.64

New Hi/Lo = 154/24 = 6.42

Thursday, May 27, 2021

Green Arrow Up

DJI30 Index at the close   ---   34,464.64   +141.59 (+0.41%)

The index opened at 34432, up 109 points.  Ten minutes later, it was at 34609, up 286.  From there it slid down 34400 at 11:30.  It then ran mostly sideways until 3:30.  In the last several minutes it rose to 34500, then at the very end  fell about 35 points into the close.

This is a clearly up day with the hi and lo higher by 199 and 118 points, respectively.  The span was a modest 229 points.  The SP500 and Russell were also clearly up today. The NASDAQ had higher hi and lo, but the close was marginally down.  They all are well within the ranges established over the last several weeks or months.  Each had its own contour over the course of the session.

The week has been positive so far, with very little drama.  

% changes -

DJI30 +0.41%

SP500 +0.12%

NASDAQ -0.01%

Russell +1.06%

DJI Closings -

5/26/19 - 25126

5/27/20 - 25548

4/27/21 - 33985

5/27/21 - 34465

NYSE Internals -

A/D = 2104/1207 = 1.74

A/D Vol = 1.95

New Hi/Lo = 230/25 = 9.20

Friday, May 28, 2021

Yellow Arrow Sideways

DJI30 index at the close   ---   34,529.45   +64.81 (+0.19%)

The index opened at 34559, up 94 points and immediately shot up to 34631, up 166.  After a retreat back to 34520 at 10:30, it rose again to 34610 at 12:30.  It then stayed above 34555 until the last few minutes, when it dropped into the close.

This is a clearly up day, with the hi and lo higher by 22 and 131 points, respectively, and the index in the green the entire session.  But the closing gain, only 9 points above the lo, is so minimal, the yellow arrow is warranted. The span was an extraordinarily narrow 111 points.

The SP500 and NASDAQ also had clearly up days, by small margins.  Aside from the slides at the end, these three indexes were basically flat after their early morning gains.  The Russell 2000 had a higher hi and lo as it coiled around its neutral line, but wound up slightly negative for the day. 

This was a positive week for all the indexes, though with no new highs. These were the weekly percentage gains.

DJI30 +0.94%

SP500 +1.16%

NASDAQ +2.06%

Russell 2000 +2.42%

With the Memorial Day Holiday on Monday, today was the last trading session of this flatish month.  Monthly changes were as follows.

DJI30 +1.93%

SP500 +0.55%

NASDAQ -1.53%

Russell 2000 +0.11%

Today's Stats:

% changes -

DJI30 +0.41%

SP500 +0.12%

NASDAQ -0.01%

Russell +1.06%

DJI Closings -

5/24/19 - 25586

5/26/20 - 24995

4/26/21 - 33985

5/26/21 - 34323

NYSE Internals -

A/D = 1958/1344 = 1.48

A/D Vol = 0.98

New Hi/Lo = 225/17 = 13.24

Taking Stock -- Week of March 1, 2021

Monday, March 1, 2021

Green Arrow Up

DJI30 Index at the close   —-   31,535.51   +603.14 (+1.95%)

The index opened at 31066, up 134 points, and immediately shot to 31410, up 478.  It then advanced more slowly, reaching a hi of 31634, up 701, at 11:20.   It drifted slowly down, reaching 31475 at 1:15, then rose to the day’s hi of 31634 before 3:00, followed by a 98 point slide into the close.

So. the roller coaster ride continues. This is a clearly up day, with the hi and lo up by 183 and 155 points, respectively.  The outsized magnitude to the gain at the close is because Friday’s session ended near the day’s lo, and today’s ended near the hi end.  The span was 568 points.  This is the 5th consecutive day of 490 or more.

The other indexes were up more, on a percentage basis, than the DJI, with the NASDAQ and Russell each gaining more than 3%.

% Changes -

DJI30  +1.95% 

SP500 +2.38%   

NASDAQ  +3.01%    

Russell 2000 +3.37% 

DJI30 Closings -

03/01/19 - 26026

02/28/20 - 25409

02/01/21 - 30212

03/01/21 - 31536

NYSE Internals - 

A/D =  2646/651 = 4.03

A/D Vol = 8.72

New Hi/Lo = 218/25 = 5.35

Tuesday, March 2, 2021

Taking Stock - Week of February 22, 2021

Monday, February 22, 2021

Yellow Arrow Sideways

DJI30 Index at the close   —-   31,521.69   +27.37 (+0.09%)

The Index opened at 31381, 0ff 113 points, and within 3 minutes dropped to the lo of 31287, 0ff 203. Then, at 10:45 it reached a local hi of 31486, off 8.  After a slight draw back, it arced up to a marginal new intra-day hi [by 6 points] of 31654, and hovered in that range from 2:00 to 3:00.  Then there was a 132 point slide into the close, thus missing a new closing hi by 91 points.

This is an outside day, with the hi up by a meager 6 points, and the lo lower by 183.  The gain at the close is trivial.  The 367 point span is the largest since 564 on 2/12, during the recovery from the late January slide.  But note that the majority of the change is on the lo side.

Measures of momentum are converging again.  At the lo end, it slid by a tiny amount for the 3rd straight day, while at longer ranges it’s rising.

All the indexes fell off at the end of the day.  The SP500 and NASDAQ stayed in the red throughout, the latter taking a hard slide.  The Russell 2000 spent a few hours in the green, but was negative at the end of the session.

% Changes -

DJI30  +0.09% 

SP500 -0.77%   

NASDAQ  -2.48%    

Russell 2000 -0.69% 

DJI30 Closings -

02/22/19 - 26031

02/19/20 - 29348

01/19/21 - 30997

02/19/21 - 31522

NYSE Internals - 

A/D =  1564/1678 = 0.93

A/D Vol = 1.24

New Hi/Lo = 332/15 = 22.13

Tuesday, February 23, 2021

Taking Stock -- Week of February 8, 2021

Monday, February 8, 2021

Green Arrow Up

DJI30 Index at the Close   —-   31,385.76    +237.52 (+0.76%)

The Index opened at 31191, up 43 points.  I reached 31359 short;y after 10:00.  There was slump, hitting 21240 before noon followed by sideways motion staying below 31310 until 3:30.  It then rose, with a 50 point spike in the last 3 minutes on a volume surge to close within 1 point of the hi.

This is a clearly up day with the hi and lo up by 134 and 108 points, respectively.  These are not big numbers, but the Index did burst through to new all time intra-day and closing highs, so that has to be acknowledged.  With that out of the way, the sky is now the limit.

This market is overvalued by any rational measure you can think of.  But none of that matters, since the market is fueled by emotion.  I think there is now new hope in the air with the loathsome trump regime in the rear view mirror and vaccines, stimulus money and reopening on the horizon.  These things are anticipated and IMHO the anticipated effects over-blown, but here we are.

I bought a basket of hi-yielding and/or hi dividend growth issues today.  My hope is that they will continue to pump out cash and weather whatever down-turns may be ahead of us.

% Changes -

DJI30  +0.76% 

SP500 +0.74%   

NASDAQ  _+0.93%    

Russell 2000 +2.53% 

DJI30 Closings -

02/08/19 - 25106

02/07/20 - 29103

01/08/20 - 30174

02/08/21 - 31386

NYSE Internals - 

A/D =  2353/861 = 2.73

A/D Vol = 2.95

New Hi/Lo = 315/2 = 157.50

Tuesday, February 9, 2021

Gamestop = Tulip Bulbs

The company is a niche marketer of new and used video games and associated computer accessories and collectables. Small investors - or more, properly, speculators - have driven the price up to levels beyond the dreams of avarice, or anything else that makes some kind of sense. Just today, it went from the ridiculous price of $248 per share to $347.51. Contributing to the rise is a short squeeze on market professionals - the situation in which they must buy shares to cover their short positions.

In the 3 hours since the markets closed, shares have dropped dramatically. A few minutes ago they were off 123 points, but have now rebounded to where they are off only [!] 90. I suspect the short squeeze might be over, and the amateur speculators [dumb money] like the 16-year H.S. student mentioned in the attached article are on their own.

This is speculation run amok. There is little intrinsic value to these shares, which were hovering around $4 year ago, and through much of the summer, before creeping up to about $14 in mid December.

There is only one way for this to end - with Gamestop shares back in the range of $2 to 4, where they belong. The only question is when it is going to happen. Rather soon, I suspect.

Taking Stock - Week of 12/28/20

Monday, December 28, 2020

Green Arrow Up

DJi30 index at the close   —-   30,403.97   +204.10 (+0.68%)

The Index opened at 30283, the lo for the day, up 83 points, and immediately shot up another hundred.  By 10:00 it reached 30416, and 30526, a new intra-day hi at 10:30.  It slid to 30380 at 1:30, rose back up to 30450 and hovered there from 2:15 for about an hour before sliding into the close.

The Santa Clause Rally happens in the last week of the old year into the first two trading days of the new. That extends from today until a week from tomorrow, and got off to a strong start.  A gain of 0.68% is quite modest, but we got a new intra-day hi of 30256, and a new closing hi of 30404.  This is a clearly up day, with the hi and lo up by 316 and 184 points, respectively.  The span was 242.

Ignoring the aberrant low on 12/21, the rising wedge is getting narrower.  This can’t go on much longer, since the lines will cross in just a few days. 

Today was a rather tepid session on the NYSE, with volume at about 3/4 of the last 6 week’s average, and decline volume greater than advance volume.  The S&P500 and NASDAQ were also up today, but the Russell 2000, crude oil, silver and gold all slipped.

My way of measuring momentum looks at time spans from 5 to 34 days.  Today’s increase did next to nothing at the short end [which surprised me a little;] and the 34 day measure, which had been steadily rising to catch up, has now converged to head sideways with the five shorter ones.  They set up more or less this way - though far less neatly - a couple of times in late ’19 and early ’20 before the final convergence from Feb. 21 to 24.  After that came the crash. 

Can’t say with any certainty that history will repeat itself only a few months later, but it does seem likely that some sort of a down-turn will materialize in the reasonably near future.  Have I hedged that prediction enough?  There are few sure things in the real world.  So I’m very curious to see how this plays out.

% Changes -

DJI30  +0.68% 

SP500 +0.87%   

NASDAQ  +0.74%    

Russell 2000 -0.38%

DJI30 Closings -

12/28/18 - 23062 

01/02/20 - 28869

11/27/20 - 29910

12/28/20 - 30404

NYSE Internals -

A/D =  1658/1509 = 1.10

A/D Vol = 0.92

New Hi/Lo = 300/6 = 50

Tuesday, December 29, 2020

Taking Stock - Week of 12/21/20

Monday, December 21, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   30,216.45   +37.40 (+0.12%)

Overnight, the DJI futures fell sharply between 4:00 and 6:00 a.m., bottoming near 29400, and were near 29680, off about 430 points at 9:00.  They rose about 90 points just before the opening bell.  The Index then opened at 30159. off 20 points, and immediately dropped to 29865, off 314.  It quickly recovered back to 30000, off 179, then dropped to the lo of 29755, off 424, before 10:30.  From there it was a slow steady climb to 29304, up 124 points and the day’s hi, at about 2:30.  After that, there was a slide to 30110 at 3:52, and then a 106 point rise into the close.

I didn’t expect a climb back into the green today, but that is where the Index ended up. The hi was 39 points under the all time intra-day hi set last Friday.  The close was 87 points under last Thursday’s all time closing hi, and two points under the close on 12/04.

Today’s span was 549 points, the largest since 803 on 11/09, the day the Index was up 834 points.  It was a strange day, with hi lower by 39 points, the 37 point gain at the close, and the lo off by 274.  The lo was the lowest since 11/30.

The Index, even with all the new highs, is really going nowhere. It seems that 30000 is a level this market just can’t get away from.  I ran a few numbers  for the action since 11/24 to check.  That was the day before Thanksgiving, and the first session to have intra-day and closing highs above 30000, at 30117 and 30046, respectively.

Total lo to hi span: 29463.94 to 30343.59; or 879.95 points.

Mean of the hi and lo = 29903.62

Average of all the daily highs and lows = 30015.36

Span as a % of all the highs and lows = 2.93%

So the range over this time is 30015.36 +/- 1.47%
The standard deviation for this data set is 215.

The 875.95 point range is 4.10 standard deviations.
The dataset is 29903 +/- 2.05 St Dev units.
There were no highs above this range, and only one lo below it.

Even with all the new intra-day and closing highs, this is a very well behaved data set.

All the indexes were close to neutral.  The other 3 were slightly negative.

Today’s lo fell outside the up slanting wedge, but in the end, nothing came of it.

% Changes -

DJI30  +0.12% 

SP500 -0.39%   

NASDAQ  -0.10%    

Russell 2000 -0.02%

DJI30 Closings -

12/21/18 - 22445

01/02/20 - 28869

11/18/20 - 29438

12/18/20 - 30216

NYSE Internals -

A/D = 1170/2016 = 0.58

A/D Vol = 0.49

New Hi/Lo =  177/6 = 29.5

Tuesday, December 22, 2020

Taking Stock - Week of November 23, 2020

Monday, November 23, 2020

Green Arrow Up

DJI30 Index at the close   —-   29,591.79   +328.31 (+1.12)

The Index opened at 29333, up 69 points, and the lo for day; then rose to 29577 up 314. It dropped back to 29360 at 11:30, then rose slowly to 29540 at 2:30.  From there it thrust up to the day’s hi of 29668 at 3:08, 76 points above the close. 

This is a clearly up day, with the hi, lo and close up by 198, 102 and 328 points, respectively. The span was 335.  On Friday I said, “Resistance seems to be firming at 29500, and support somewhere above 29000."  This was half right.  Resistance, for now at least, is closer to 29700.

 Up 328 looks impressive, but the midpoint of the the last 2 weeks range is 29433, and today’s midpoint is at 29500, only 67 points higher.  So after a big surge up on 11/09, the Index has gone basically nowhere - or more precisely - down a little.  Short term momentum is now very slightly down; and over longer ranges, even beyond one month, appears to be topping.

For what it’s worth, Apple was down almost 3% today, closing at 113.85.   It was ridiculously overvalued when it peaked at 134.18 on 9/02.  For the last couple months it’s been trading mostly in the range of 110 to 120.  I believe it is still significantly overvalued.  I’ll get interested when it hits a low somewhere around 80.  Maybe in February.

% Changes -
DJI30 +1.12%
SP500 +0.56%
NASDAQ +0.22%
Russell 2000 +1.95%

DJI30 Closings -
11/19/18 - 25017
01/02/20 - 28869
10/23/20 - 28336
11/23/20 - 29592

NYSE Internals -
A/D = 2385/740 = 3.22
A/D Vol = 4.61
New Hi/Lo = 202/3 = 67.33

Tuesday, November 25, 2020

Taking Stock - Week of November 9, 2020

Disclaimer:  I am not a financial advisor, and do not give advice.  Make your own decisions.  Chose wisely.

Monday, November 9, 2020

Green Arrow UP a lot

DJI30 Index at the close   —-   29,157.97   +834.57 (+2.95%)

The Index opened at 29468, up an astounding 1145 points, or 4.04%, and quickly leaped further to 29934, an even more astounding 1610 points, or 5.69%, and a new all time intra-day hi.  It slid back to 29340 around 11:00, rose again to 29700 at 1:00 and hovered near there for an hour.  It slipped back to around 29500 at 3:30, then dropped hard in the last half hour, ending at 29158, about 27 points above the low.

This was a wild ride, and a huge gain, despite giving back about half of the morning’s advance in the afternoon. I certainly was not expecting this.  It’s a clearly up day, with the hi, lo and close massively higher by 1502, 941 and 835 points, respectively.   This gave us a new all time intra-day hi, but not a new hi at the close, which is about 40 points under the 9/03 hi.

I’ve been predicting a down-turn, and this is, obviously, not it.  Whether I’m wrong or not depends on what kind of follow-through happens in the next few days. Strangely, the NASDAQ’s participation in the morning’s surge was rather anemic.  It’s gain at the opening was 1.27%, which is respectable.  But it slid most of the day, and wound up 1.53% in the red.

Either this was the last gasp of irrational exuberance, or I’ll have to go back to the drawing board.  The big decline at the end of the day suggests that this might be a toss up.

% Changes - all the Indexes except the NASDAQ were up all day

DJI30 + 2.95% 

SP500 + 1.17&%   

NASDAQ - 1.53%    

Russell 2000 + 3.70%  [!]

DJI30 Closings -

11/09/18 - 25989

01/02/20 - 28869

10/09/20 - 28587

11/09/20 - 29158

NYSE Internals -

A/D = 2442/683 = 3.58

A/D Vol =  0.83 = 4.93

New Hi/Lo = 345/12 = 28.75

Tuesday, November 10, 2020