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The percentage of Stocks in a Bullish Upswing for all Categories are
53% of the Dow Jones is on an Upswing
46% of the S&P 100 is on an Upswing
50% of the Nasdaq 100 is on an Upswing
43% of all Three Indexes Top Holdings is on an Upswing
The Major Indexes closed at the high end of the daily range and had somewhat of an upside reversal day. The Indexes are trading very choppy, moving in a sideways trading range. We are waiting for it to break out into a trend up or down it doesn't matter the direction.
The Market Breadth is still a little weak but trying not to fall apart. If the breadth gets worst the Major indexes may sell off.
The Adv.-Decl, Issues Diff Green Line is below the Zero Line but not by much. The Green Line is Very close to Zero and turning up. We need it to turn down and then move below the Zero line trending downward in order to feel strongly about going short
If the Green Line does break above the Zero Line then I will not be looking to Short Stocks with improving breadth.
A picture is worth a Thousand Words
Charts updated as of Friday 2-17-2023
Below is a Daily Structural Chart of the Dow Jones Index. Notice it is still trading below the Horizontal Resistance line at 34,243.85 and below the Downward Trending Trendline that has been in place all of 2022.
Price broke below the Support Level at 33,613.03 but quickly traded back above the level. This is clearly a Strong support level.
One thing to remember is the more times prices try to break this support level, the more meaningful it will be when prices do break this level and close below it. Prices have been finding support at this level for several days.
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Look at the Chart Below of the Dow Jones Index with Key Moving Averages. Notice that the Dow Jones traded below the 50-Day MA (Red line) and quickly got back above and closed above the 50-Day MA. We will need to see prices Break back below and close below the 50-Day MA with strong volume then we will be more comfortable with our Short positions.
The Dow Jones traded up to the 21-Day MA (Yellow line) and stopped. As long as prices stay below the 21-Day MA we should not lose much on the trade, and the stronger our chances become that the trade will become profitable.
Notice the upside reversal day, with prices closing in the upper end of the range, with Above Average Volume and Higher Volume than the Previous Day (Normally when you get this kind of 1-day pattern prices will trade up the NEXT DAY or TWO). This is not what we wanted to see when we are short.
Also, Notice that the Price Bounced off the 63-Day MA (the dashed line) which represents 1Qtr). This is a MA that we would want to see prices get below if we are short
Let's see if the 5-Day (white line), 9-Day (Green Line), and 21-Day (Yellow Line) MA's are going to hold as overhead resistance
Below is a Daily Structural Chart of the DIA (the ETF that tracks the Dow Jones Index).
As I stated before this will be the trading vehicle I'm using to follow the Dow Jone Index
We were looking for a break above and Close below the 343.50 Level (the Red Horizontal line) with good Volume before considering going long.
We were also looking for a break below and Close below the 338.70 1st Level then 335.58 2nd Level (red line).
We got a break below and close below the 338.70 1st support level, So we started a position in the DIA. If it continues to sell off we will add to the short position (Last Week).
The Index opened on the 335.58 level (Red Horizontal line) and traded below it for just a little while before rallying back above the red line and closing just below our entry point (from last week). The 335.58 level is proving to be a very strong support level. The DIA is clearly within a trading range with 343.50 at the Top Level and 335.58 at the Lower Level of the range
Look at the Chart Below of the DIA with Key Moving Averages. Notice that the DIA traded right down almost to the penny of the 63-Day MA (the Dashed Line. Representing 1 Qtr.) and bounced. Then traded back above the 50-Day MA, That's negative.
If this would have happened on Strong Volume the Short Trade would definitely have to be closed out.
Prices are now testing the 21-Day MA (Yellow Line) as resistance. If the price gets back above and closes above the 21-Day MA and also the Downward turning 5-Day and 9-Day MA's (white and Green Lines) then I will not be looking to short (or be short) the DIA
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Below is a Daily Structural Chart of the S&P 500 Index. The price action traded below the Horozantial Support Line @ 4060.79 also the upward-trending internal trendline but bounced off them to the upside. This is not what we want to see when looking too short.
The Price is still below the Consolidation area and trapped inside the triangle. We need to see a break below and close below the 4060.79 Horozantial level and the upward-trending internal trendline. If that happens it will be negative for the S&P 500
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Look at the Chart Below of the S&P 500 with Key Moving Averages. Notice that the S&P 500 opened below the 21-Day MA traded down, then reversed upward, and closed right on the 21-Day MA. The Volume was also higher than the previous day. This is actually positive price action (not what we want to see when trying to short stocks)
Just above that are the 5-Day and 9-Day MA's right around 4106.96. A Break above and close above these key moving averages will be positive for the S&P 500 and I will not be looking to short stocks.
Below is a Daily Structural Chart of the SPY (This is the ETF that tracks the S&P 500. This is the trading vehicle I'm using to follow the S&P 500 Index).
The important thing about this chart is the fact that prices traded down to the 404.00 level (Red Horozantial Line) almost to the penny and bounced. The 404.00 Level is a Weekly Support Level. Prices then trade back inside the lower end of the Consolidation area, just above the 406.93 Level. Price is also still stuck in the triangle
This is actually positive price action, not what we want to see if trying to short stocks
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Look at the Chart Below of the SPY with Key Moving Averages. (This is the ETF that tracks the S&P 500. This is the trading vehicle I'm using to follow the S&P 500 Index). Notice that the SPY opened below the 21-Day MA traded down then reversed upward and closed above the 21-Day MA, Just above the 21-Day MA are the 5-Day and 9-Day MA's right around 409.79 level.
A Break above and close above these key moving averages will be positive for the SPY and I will no longer be looking to short stocks
Below is a Daily Structural Chart of the Nasdaq Index. The price action is below the heavy consolidation area and traded down to the 11.667.49 support level then bounced. The price also traded below the Upward Trending Internal trendline before rallying back above it. This is not what we want to see when trying to go short. We want to see the price break down below these levels on heavy volume
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Look at the Chart Below of the NASDAQ with Key Moving Averages. Notice that the Price traded down the 21-Day MA (yellow Line) almost to the penny and bounced (this is positive action). The Price is now just below the 5-Day and 9-Day MA's.
If the Price breaks back below and closes below the 21-Day MA with heavy Volume then that will be Negative, but if the price trades back above and closes above the 5-Day ad 9-Day MA's then that will be positive for the Nasdaq and we will not be looking for short trades
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Look at the Structural Chart Below of the QQQ. (This is the ETF that tracks the NASDAQ. This is the trading vehicle I'm using to follow the NASDAQ).
Notice that the Price traded below the Upward Trending Trendline and rallied back above it. Also, notice that the price traded down to 297.45 (Red Horozantial Line) and Bounced. This is not what we really want to see when trying to go short
Notice the upside reversal day, with prices closing in the upper end of the range. This is not what we wanted to see when we are short
Look at the Chart Below of the QQQ with Key Moving Averages. (This is the ETF that tracks the NASDAQ. This is the trading vehicle I'm using to follow the NASDAQ).
Notice that the Price traded down the 21-Day MA (yellow Line) almost to the penny and bounced. The Price is now just below the 5-Day and 9-Day MA's.
If the Price breaks back below and closes below the 21-Day MA with heavy Volume then that will be Negative, but if the price trades back above and closes above the 5-Day and 9-Day MA's then that will be positive for the Nasdaq and we will not be looking for short trades
Notice the upside reversal day, with prices closing in the upper end of the range, bouncing off the 21-Day MA with Heavy Volume. This is not what we wanted to see when we are short. Prices could trade up over the Next Day or TWO
Economic Reports
This Week has some Key Economic News that can really move the markets. There could be some wild price swings this week as the News comes out
Friday Is the PCE this is the Fed's Main gauge of Inflation. If PCE comes out High the market could take a HARD FALL
This can change quickly this week. Be Careful
Monday, Feb. 20, 2023,
The market closed for the Holiday
Nothing Important
Tuesday, Feb. 21, 20223,
@ 9:45 am Manufacturing PMI (Feb) (This could be a market mover)
@ 9:45 am S&P Global Composite PMI (This could be a market mover)
@ 10:00 am Services PMI (Feb) (This could be a market mover)
@ 10:00 am Existing Home Sales (Jan) (This could be a market mover)
@ 10:0 Existing Home Sales (MoM) (Jan) (This could be a market mover)
Wednesday, February 22, 2023
@ 2:00 pm FOMC Meeting Minutes (This could be a market mover)
Thursday, February 23, 2023
@ 8:30 am Continuing Jobless Claims (This could be a market mover)
@ 8:30 am Initial Jobless Claims (This could be a market mover)
@ 8:30 am Jobless Claims 4-Week Avg (This could be a market mover)
@ 8:30 am Core PCE Prices (Q4) (This could be a market mover)
@ 8:30 am PCE Prices (Q4) (This could be a market mover)
@ 8:30 am Corporate Profits (QoQ) (Q4) (This could be a market mover)
@ 8:30 am GDP (QoQ) (Q4) (This could be a market mover)
@ 8:30 am GDP Price Index (QoQ) (Q4) (This could be a market mover)
@ 8:30 am GDP Sales (Q4) (This could be a market mover)
@ 10:50 am FOMC Member Bostic Speaks (This could be a market mover)
@ 11:00 am Crude Oil Inventories
Friday, February 24, 2023
@ 8:30 am Core PCE Price Index (MoM) (Jan) (This could be a market mover)
@ 8:30 am Core PCE Price Index (YoY) (Jan) (This could be a market mover)
@ 8:30 am PCE price index (MoM) (Jan) (This could be a market mover)
@ 8:30 am PCE Price index (YoY) (Jan) (This could be a market mover)
@ 8:30 am Personal Income (MoM) (Jan)
@ 8:30 am Personal Spending (MoM) (Jan)
@ 8:30 am Real Personal Consumption (MoM) (Jan)
@ 10:00 am Michigan Consumer Expectations (Feb) (This could be a market mover)
@ 10:00 am Michigan Consumer Sentiment (Feb) (This could be a market mover)
@ 10:00 am Michigan Inflation Expectations (Feb)
@ 10:00 am New Home Sales (Jan)
@10:00 am New Home Sales (MoM) (Jan)
@ 10:15 pm FOMC Member Mester Speaks (This will be a market mover)
@ 3:30 am CFTC S&P 500 speculative net positions
The Bulls are fighting and the market is in a New Confirmed Uptrend, But the Major Market Indexes are at Key Levels on the Chart, This can change quickly this week. Be Careful
Thank You
Rod
BTA