A PnF upate to the market.
Two of our short term indicators have reversed up (last week), the Optionable BP and the High Low. The 10 week, our third short term indicator, is very close to reversing up and we wouldn't be surprised if that happened this week. The long term indicator, the NYSE BP, is less than a percent from reversing up and if we have another day like today (even with the DOW down more buy than sells came in) the NYSE
BP could reverse tomorrow. THAT IS JUST A COMPARRISON. We won't know until the eggs are counted but it is that close. There have been times in the past when it was very close but no banana so we wait for the signal.
In the meantime, being the short term, the market has based and everything is down in over sold areas. All the indicators came down to levels like last year (the OPTI and NYSE BP are a little higher than last year but still in over sold areas) creating an excellent opportunity - like last year. It isn't often that this kind of opportunity presents itself two years in a row. Yes, there is always a sesaw action but usually the pullbacks in the indicators are into mid range, not into the lower end (which on the PnF charts is below 30%).
Back to the short term. Can buy here with stops and strong stocks whose RS is in X's. If the NYSE BP turns up we'll be pounding the tables and backing the trucks up. I started entering positions in the past couple of weeks when I saw the indicators start to strengthen and also the DOW create a base. Now, I don't really care what the DOW does but it is interesting to watch.
Sectors also have sold down to below 50%. We have a sector bell curve chart which had most sectors above 50% in April and now they are below 50%. A lot came down to 30% and have reversed up into Bull Alert status which is the best status to have. Semi's and Internet were the first.
As the sectors reverse up we will be entering more and more positions.
This is another great opportunity. Last year was excellent and the NYSE BP was right on cue when it came to the market risk.
Oh, interest rates. We are waiting for the DJBB (Dow Jones 20 Bond Average) to reverse up from the bottom of its trading band. This chart reversed down in February telling us interest rates were going to rise (turned out dead right) and we are now waiting for the reversal up to confirm interest rates will stay put. The TYX chart gave a sell signal last week or the week before and that tells us the DJBB may reverse up soon. It must read 99.20 to do so. Looking at these charts I'd say it is unlikely rates will rise again and if the DJBB reverses up, I'd feel even better about that statement.
The market is going to have pullbacks, which is needed and quite normal. With every pullback I look at my selection of stocks for good entries. Should the indicators reverse back down, I'll post again but for now, it is time to buy and to have fun. Last year we bought in early October and it took only a month to see excellent returns. I have no idea if it will go quick this year but it looks good now none the less.
Everyone have fun and best of luck to you all!
Jan |
