Sunday, March 29, 2015

What If Scenario (just for fun)

Three months into the new year and the broad U.S. equity indices have made limited progress to the upside.  The Nasdaq composite lead by the healthcare/biotech and select semiconductor sectors has risen 3.28%, while the S&P 500 is essentially flat and the DJIA has actually declined six tenths of 1 percent.

If you've been nimble and picked the right stocks in the right sectors your performance could be quite good relative to the indices.  But if you're an index investor in your 401K or retirement IRAs it's been a flat start to the year.

And looking back to the swift pullback that occurred back in October of last year it has made me look at the index charts from a little longer perspective.  The S&P 500 is in a long term uptrend of 72 months now, dating back to the March '09 lows.

We've seen mostly 8-10% corrections along the way, aside from the QE induced market hiccups back in mid 2010 and in mid to late 2011.  The "V bottom" has been the rule to follow where traders have been trained like lab monkeys to "buy every dip" lest you miss the next upturn.

I've looked back at prior market tops to see what signs to look for, and while there some similar patterns that take place, there's really no key moving average that signals the trigger for a decline.

So with that said, here's a current daily chart of the SPX showing what some technicians could interpret as the start of a topping pattern.  To me, the bias still lies strongly to the bullish side, but one must always be on guard after such a prolonged move up.

Obviously the lows from March 11 at 2039-40 are important near term.  Then the next level to me would be the 200 DMA currently around 2010.  After that the December lows of 1972-73 come into play.

The 350 EMA is mentioned on the chart as it has been an area that has shown support during the current 72 month move.  The only serious breach of that line was during the 2011 correction.

If the highs from February 25 are taken out with strength across multiple sectors, then this scenario is no longer valid, of course.

Friday, December 26, 2014

Holiday Scan

Here are some charts that caught my eye during a scan through the last evening.  A couple of the solars caught my eye, but I'm not quite confident oil has bottomed just yet so we'll have to see how that plays out in the near term.

Some of these charts are short term scalp plays while others are setting up in longer term consolidations, and thus may require more time before they trigger.

Q Logic (QLGC) is of interest after 14 years of sideways basing.  It's nearing 2 1/2 year resistance.  It would trigger on the daily chart over $13.25.

Charts shown in this post:  SPWR, WBAI, WIFI, TSEM, QLGC, RESN, VII, PKD, OWW

A few others that caught my eye:  VPCO, TTPH, SMED, QUIK, UPL, PSUN

As always, if you take any of these setups use a stop loss or lose your house.

Click on charts to enlarge: