THROUGH MY ROSE TINTED GLASSES
The DOW INDUSTRIALS closed down 23.43 points or .24% but it's up 435.62 or 4.74% from one week ago. My my what a run! TRANSPORTS were down 73.96 points or 2.20% but still up 168.67 points or 5.41% from last week. UTILITIES were down 2.73 points and they have been down six of the last eight trading days. They're down 4.50 points or 1.44% from a week ago. My DJUA point and figure hand chart reversed down on the 5th. It's still on a buy signal and above its Bullish Support Line, but should be carefully watched. It's moved back into the oversold area and its moving averages are dropping. I like to keep a real close watch on Utilities as a leading indicator for the DJIA. The S&P 500 closed down 11.21 points but is still up 48.12 points or 3.92% from last week. The NAZ was very strong today closing up 40.18 points or 1.71% and 176.54 points or 8% in one week! It also closed within 10% of its high low range deducted from its close and has an 85% chance of a higher high tomorrow.
OVERBOUGHT/OVERSOLD (OB/OS)
This is a daily calculated OB/OS indicator spliced together with masking tape and my understanding of how Birinyi calculates his. It uses a 50 DEMA and looks back one year at the highest and lowest, as a percent, that a stock or index has traded above or below its 50 DEMA. Thus, creating a so called range of OB/OS. (Also listed are a few moving averages.)
50 OVER OVER
INDEX CLOSE BOTTOM DEMA TOP SOLD BOUGHT
DJIA 9619.89 7694.13 9020.12 9902.89 0.00% 67.94%
DJTA 3286.32 2404.60 3034.96 3454.21 0.00% 59.95%
DJUA 307.41 289.27 307.93 340.32 2.79% 0.00%
NYSE 604.04 490.65 573.44 617.93 0.00% 68.77%
S&P 1263.88 1013.86 1179.61 1285.09 0.00% 79.89%
NAZ 2384.59 1621.87 2042.13 2385.87 0.00% 99.63%
52 52
WEEK WEEK 5 13 40 50
INDEX LOW HIGH CLOSE DEMA DEMA DEMA DEMA
DJIA 7379.70 9759.44 9619.89 9528.42 9355.96 9089.05 9020.12
DJTA 2260.24 3735.38 3286.32 3279.83 3189.84 3059.44 3034.96
DJUA 260.14 323.65 307.41 309.80 310.56 308.86 307.93
NYSE 462.69 612.20 604.04 605.26 597.21 578.38 573.44
S&P 912.83 1278.24 1263.88 1261.92 1241.50 1192.79 1179.61
NAZ 1343.87 2384.72 2384.59 2324.75 2242.99 2081.84 2042.13
Many of my index point and figure hand charts reversed down today. But that is just recognizing today's action. I'm still longer term bullish and short term bullish but the short term is getting overbought. When I use the term overbought or oversold here, I'm referring to bullish percent charts. They become overbought when they reach 70% or higher, and oversold from 30% or lower. For instance - the High Low bullish % chart is now over 70% -- and therefore overbought (this is a short term indicator).
One must be selective in this market but when I see something I like, with positive point and figure relative strength in good sectors and a strong P&F individual chart, I buy it. Sure the market is high and we could pull back some here and go sideways for a while -- but, there are still a great deal of P&F charts NOT on a buy signal, and therefore the New York Stock Exchange Bullish % chart (the no. 1 leading indicator) is not overbought right now, and I ain't worried about it. What is is. I will have time to get out, when it's time to get out.
I caught all of last weeks run and then some. I'd be real upset if I had been sitting on the sidelines waiting for my secret black box indicator (or guru who has one) to say "Buy Now, Buy Now, Buy Now" -- and it hadn't!
Take care,
Eric
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