Post Greece / China recovery

It has been a while since I've posted anything, but I have not had a strong signal in quite some time.  The market has trended sideways for a bit, but the chaotic environments in Greece and China have given the market a bit of a reset.  I'm seeing indications that the US equity market is poised for an advance over the next few weeks.

Percentage of US stocks above 20 day moving average:  37.9% (up from a low of 20% this week)

27 Jan

51% of US Stocks are above their 20 day average.

48% of US Stocks are above their 50 day average.

Market Bias: Slightly bearish

Predictability confidence:  Low

Tough day on the market for bulls today.  The swinging gyrations in the market have probably been pretty tough for those that have positions.  For my method, I have not had a solid entry signal so I'm still just sitting on the sidelines watching this whole thing unfold.  

21 Jan

37.6% of US Stocks are above their 20 day average.

41.3% of US Stocks are above their 50 day average.

Market bias: Neutral

Predictability confidence: Low, but improving

Another uneventful day today.  Still in all cash.  I now have 0/5 indicators bullish, but that could change pretty quickly.  I still feel that another run of selling is needed before I'm comfortable calling an entry point.

19 Jan

39% of US stocks are above their 20 day average.

43% of US stocks are above their 50 day average.

Market bias: Neutral, turning slightly positive

Predictability confidence:  Low, but improving

A sizable rally on the Dow today to stop the 5 day downtrend.  However, I only have one of five indicators favoring a bullish trend so I'm still not comfortable with an entry point.  The recent downtrend did allow my indicators to "sync up" with each other and I now see a more typical setup.  To trigger an entry point signal, the market will need to see another downward move following today's (and perhaps tomorrow's) rally.

17 Jan, Market bounce

39% of US Stocks are above their 20 day average.

43% of US Stocks are above their 50 day average.

Market Bias: Slightly Positive

Predictability Confidence: Low turning Moderate

The market took a positive bounce after many days of declines.  Below we can observe the price bouncing off the bottom Bollenger band, but there is still some downside potential on the slow stochastic.

Dow Daily.JPG

The Weekly Chart (below) gives us a candlestick that pierces the 20 day moving average with the lower wick, but there is nothing on the slow stochastic to suggest that we should expect a significant rally.

So, I think it would be reasonable to expect market conditions to moderately improve sometime next week.  2 of my 5 indicators (not pictured here) are in favor of a bullish turn, however it is not yet enough for me to declare it a good entry point.