Look at the high volume down weeks in these weekly charts. Many banks look like this. Things are going to get very bad.
Blog post: Day 41 of $QQQ short term down-trend; With “Sell in May” almost here and T2108=31, I think the selling panic is yet to come, see monthly charts
My read of the charts suggests that the down-trend has been slow and will likely end in a steep panic. Look at these monthly charts of the SPY and DIA. The markets have a long way to fall and selling volume needs to pick up for this decline to end. Investors have yet to give up. I hope I am wrong. I have been mainly in cash since November. As long as I get back in below the levels I got out, I will have come out ahead without suffering the anxiety of seeing my pension balances drop. I follow the market trend and nothing else. “Sell in May” is almost upon us.
Blog post: Investors Intelligence poll finds more bears than bulls (34.5/29.9%) =extreme bearish sentiment in newsletters, typically found at bottoms; 18 stocks from my ATH scan; GMI=Red.
With people being blown up and losing their homes and family and pets, it seems difficult and insensitive for me to focus on making money…..
The market will turn when the news is very bad and we least expect it.The fact that there are more bearish than bullish newsletters, a very rare event, suggests that at least a bounce may be coming. But T2108, at 37%, is far above the level where bottoms occur. And the p/c ratio, in the .80s, is not extreme. I am content to wait on the sidelines mainly in cash and to watch closely. Growth stocks are underperforming now and few of the fallen leaders will retake their ATHs. We need to stop looking for bargains. The leaders will show up on the new 52 week high list, preferably reaching all-time-highs (ATHs). Stocks at ATHs last week are mainly in agriculture, fertilizer, metals and defense.
Amazingly, 13 of the 15 stocks that came up in my ATH scan last week actually rose last week during a declining market. One component of my scan requires the stock to have a weekly RS (SPY) at a 20 week high. Here are this week’s 18 candidates: (2 have earnings this week)
Six of them are from the oil and gas sector and five are from agriculture/food. Past performance is not guaranteed to repeat. But I think it is informative to see that some sectors have multiples stocks reaching ATHs. When I ran the same scan on industry indexes the following came up: oil and gas, agriculture, copper and medical distribution.
The GMI is 1, of 6, and has been Red since January 10. It is so much easier to profit by buying long when the GMI is on a Green signal. When it is Red, many break-outs will fail.
If I had no inkling of the horrible news, I would say that the charts suggest to me that we are at the BEGINNING of a significant decline. The decline thus far has been slow. In 2000 and 2008 the declines got going after the indexes had entered Stage 4 declines, which they are just doing now……
