With the market lurching up in fits and starts, you may be wondering when to take your money off the table. This article investigates exits in detail to help you decide on a good strategy for you. It covers
Have a look at my research on trend-following indicators in which I systematically analyzed 10 ways to ride the trend in US stocks. The back-testing was done with Wealth-Lab Pro(R) for Fidelity Investments. The stocks considered were the S&P500 components. The 10 indicators tested were:
This MoneyShow interview highlights several things to look for to identify an excellent buying opportunity in the stock market. I recorded it in August and I think the message still holds. Short summary as of this writing is that some of the signs were present in Oct 2011 but the market still has high valuations.
Of course we have a new set of MACD Divergences now. To stay current, you can sign up for the full list of MACD divergences and MACD Histogram divergences daily on US stocks, ETFs and futures at divergence-alerts.com
Or to sample the scan output, check out the MACD Divergences on NASDAQ stocks posted on Wednesday and Friday by entering your name and email below. That adds you to an email list that gets notified of new divergences twice a week, plus a few promotional offers.
Watching the QQQ gave important clues to the market this summer. Negative MACD Divergences on the weekly chart (top) of the QQQ showed up just before the big drop in August. As I write, QQQ is running into overhead resistance from the old up trend line drawn on the weekly chart (top). On the daily chart (bottom), QQQ reached up to touch the 50-day MA and fell back. If the NASDAQ leaders retreat, I would expect the market to follow.
The small cap Russell index, shown below in charts of the e-mini TF, has not even performed as well as the NASDAQ. You can see from the weekly chart below (top panel) the past negative divergences. In early August TF failed to achieve new highs and MACD confirmed the weakness – a fuzzy negative divergence. On the rebound, it is not even close to the past uptrend line. On the daily chart (bottom), notice TF’s current inability to reach its 50-day MA like QQQ.
In summary, I think there could be further to go on the downside before the market gets ready for election year.
Trading Options for ProfitS (TOPS) Group Meeting, Sunnyvale CA, Sept 10 at 1pm PST. If you’re in town, feel free to attend this meeting for an extended talk on technical and fundamental indicators to get insight into the movements of the broad market. Email RSVP to ovug (at) helpone.com
Traders Expo Las Vegas, Nov 18 2011 8am PST on MACD Divergences and 5:30pm PST on Weekend Market Status
Treat yourself to a trip to Vegas to sharpen your trading skills! Click here to register for Traders Expo
Right now many are playing the markets with anxious eyes and nervous stomachs – perhaps as it should be! One tool that I’ve been using lately to help get a sense of the markets is bond yield spreads.
For more info, check out this short video interview.
Back in Feb 2011 at the Traders Expo New York, I recorded this interview about Trends and Reversals. Since that time, I’ve researched several additional ways to check out the strength of the trend, otherwise known as market internals. I’ll be talking about them in depth in a presentation at the Traders Expo Dallas on June 18, 2011 called Weekend Market Status.
One of the topics is yield spreads between corporate and treasury issues. This can have an impact for stock traders and investors, not just the bond market. Yesterday, the yield spreads headed off in an ominous direction for the stock market.