Taking Stock - Week of October 19

Monday October 19, 2020

Red Arrow Down

DJI30 Index at the close   —-   28,195.42   -410.89 (-1.44%)

The Index opened at 28634, up 27 points, and immediately rose to 28711, up 106.  From there it tumbled down to 28474, off 132 points before 11:30.  It then ran sideways between 28500 and 28550 until 1:30, when it resumed falling, hitting a lo of 28143 at 3:00, and after a slight rise, again before 3:30. It rose to 28260, dropped to a marginal new lo at 28139, then rose 56 points into the close. 

This is a clearly down day, with the hi, lo and close down by 131, 431 and 411 points, respectively.  Today’s lo is only 42 points below last Thursday’s, so if the Index is plowing new ground here, it is by a thin margin.  

All the indexes were down, and all had similar contours.  I can’t say for sure that the rise from the March lo is complete, but that idea is worth thinking about.  The 10/12 hi of 28958 is now a benchmark that must be exceeded if the Index is to continue its climb.  But any further drop will suggest that a local top is in.  Possible support levels are at 28000, 27500 and the low 27000’s.  Alternatively, the index might just be moving in a long sideways crawl.  This has happened a couple times already in the last few months,

Closings -

10/19/18 - 25444

01/02/20 - 28869

09/19/20 - 27657

10/19/20 - 28195

NYSE Internals -

A/D = 827/2215 = 0.37

A/D Vol = 0.22

New Hi/Lo = 86/21 = 4.10

Tuesday, October 20, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   28,308.79   +113.37 (+0.40%)

The Index opened at 28246, up 51 points. It reached a hi of 28458 before 10:30, then fell to 28285 at 11:00.  It climbed to 28400 just before noon, then shot up to 28503 a half hour later.  It went sideways for 45 minutes, then shot up again to 28575, the hi of the day, after 1:30.  From there it was a hard fall of 295 points, hitting a bottom at 28280 after 3:00.  It then chopped around, hitting a local hi at 28400, before sliding into the finish.

This is an inside day, with a higher lo and a lower hi.  The total span of 332 points

was less than yesterday’s 573.  Notably the day’s hi of 28575 was 137 points below yesterdays.  At the hi, there would have been a nice gain of 1.33%, but a late day decline erased most of it.

This is now over a week of basically sideways motion. Upward momentum has stagnated since the 9/16 hi.  One can never be too certain about these things, but I suspect the motion over the next few weeks will be down.

Closings -

10/19/18 - 25444

01/02/20 - 28869

09/18/20 - 27657

10/10/20 - 28309

NYSE Internals -

A/D = 2062/948 = 2.18

A/D Vol = 2.74

New Hi/Lo = 71/12 = 5.92

Wednesday, 10/21/20

Red Arrow Down

DJI30 Index at the close   —-   28,210.82   -97.97 (-0.35%)

The Index opened at 28271, off 38 points. It reached the day’s hi of 28451, up 142, shortly after 10:00. There was a hard fall to 28210 over the next hour. The next 2 hours were volatile, including a harp narrow spike up to 28400 before 12:30.  This was a complete rise and fall of 160 points in less than 20 minutes.  The day’s lo of 28197 occurred a half hour later.  The index then rose to 28360 around 3:00, followed by a choppy 149 point drop to the close.  

This is a clearly down day with the hi, lo and close lower by the rather small margins of 124, 46, and 98 points, respectively.  The day’s span was 254 points. 

Momentum is completely flat, and the trajectory of the daily highs is down 500 points in 7 trading days. This looks like preparation for - or perhaps the beginning of - a down turn, and I expect that’s where the market is heading in the next few weeks.

Closings -

10/19/18 - 25444

01/02/20 - 28869 

09/21/20 - 27148

10/21/20 - 28210 

NYSE Internals -

A/D = 1045/2003 = 0.52

A/D Vol = 0.61

New Hi/Lo = 62/26 = 2.39

Thursday, October 22, 2020

Greenish Arrow Up  —  a bit

DJI30 Index at the close   —-   28,363.66   +152.84 (+0.54%)

The index opened at 28197, off 13 points, and quickly jumped up to 28295, up 84. A rapid succession of sharp zigzags lower followed, leading to a sharp drop to the day’s low of 28040, off 171, before 11:00. An equally sharp rebound then occurred, topping at 28270, up 59, at 11:15.  After a slight side over the next hour there was a pretty steady climb to the day’s hi of 28421 before 2:30.  From there it zig-zagged into the close, 58 points lower.  The lo to hi spread was 381 points.  The 10 day average is 324.

Despite the increase at the close, the day’s hi and lo were lower by 29 and 156 points, respectively.   Highs have been lower for 4 consecutive days, and for 8 of the last 9.  The index isn’t moving very fast, but it is slumping.  Values are in the range where they were from 10/7 to 10/9, two weeks ago.

The surge of over 2000 points from late September has disguised the fact that upward momentum peaked in early September.  There hasn’t been a new local hi since the Index reached 29299 0n 9/03.  What we’ve seen in the last several days is a bipolar market, where the dueling forces are having a hard time finding a direction.  Hence the sharp intraday spikes and drops. Still, the bears are ekeing out incremental losses.

A trend is only a trend until it isn’t.  If there is any trend now, it is horizontal.  Nothing's happened to make me change my opinion that the next few weeks [possibly months] will be trending down.  Today we saw round number support at 28000.  For the move down to materialize, the Index will need to fall through support at 27500, the low 27000’s and 26500.

Closings -

10/22/18 - 25317

01/02/20 - 28869

09/22/20 - 27288

10/22/20 - 28040

NYSE Internals -

A/D = 2113/938 = 2.25

A/D Vol = 3.94

New Hi/Lo = 48/26 = 1.86

Friday, Oct. 23, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   28,335.57   -28.09 (-0.10%)

The Index opened at 28410, up 46 points, and quickly rose to 28437, up 73.  It fell to 28306, off 58 points before 10:30.  It ran sideways for about an hour, then resumed falling, hitting the day’s lo of 28150 at 1:00.  From there is was a steady climb into the close.

The hi was about 15 points higher than yesterday’s, but 14 points under Wednesday’s.  The lo was 110 points above yesterday’s, but about 47 points under Wednesdays.  Today’s close is about 27 points above Tuesday’s. 

But each of these values is hundreds of points under last Friday’s.

Open - off 161

Hi - off 406

Lo - off 421

Close - 271

Momentum is either dead flat or slightly down, in both the DJI30 and SP500, and has been so, with only some slight wiggling, for a month and a half.  This is a market that cannot rise, but is working really hard not to fall.  But I think support is slowly eroding.

Closings -

10/23/18 - 25191

01/02/20 - 28869

09/23/20 - 26763

10/23/20 - 28336 

NYSE Internals -

A/D = 1906/1111 = 1.72

A/D Vol = 1.57

New Hi/Lo = 70/21 = 3.33