Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Market Sending Mixed Signals

By Keith SchneiderStock MarketsJan 19, 2021 12:39AM ET
www.investing.com/analysis/market-sending-mixed-signals-200556258
Market Sending Mixed Signals
By Keith Schneider   |  Jan 19, 2021 12:39AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

I have been reviewing lots of graphs and charts that I come across and many others that people e-mail to me.  I am always intrigued by all the statistics that people put together showing what might occur in January and how it foretells the remainder of the year.

I also enjoy seeing the graphs and tables showing what should occur if we come off two good quarters, like the 3rd and 4th of 2020, and what should happen the following 6 and 12 months after.

Yet, my long tenure in this business tells me stock performance and the market is about earnings, inflation, and interest rates. Even more important to us is the technical picture of stocks, which determines risk control and trade management.

We look at many variables, including volume, advance-decline lines, buying or selling pressure (accumulation and distribution days), moving averages, and many more. To sum it up, we incorporate the skills of a macro economist with the timing of a floor trader.

Our company was founded and continues being managed by three traders who all traded for themselves on the Floor of NY Exchanges.  We developed our models and technical strategies with risk management as one of our highest priorities.  Over the past 15 years, we built powerful investment models that are constructed to deliver alpha over benchmarks that have superior risk-adjusted returns.

The highlights of this week’s market action are as follows:

  • Risk gauges are still bullish.
  • Large-cap stocks and technology stocks (QQQ) have lost steam and are sitting on the fringe of turning cautious.
  • Utilities (XLU) were strong versus stocks, another sign of preliminary weakness.
  • The number of Distribution days are picking up with IWM and QQQ having four over past two weeks, another sign of weakness.
  • Three out of 4 key US equity indexes (SPY, DIA, QQQ) retreated to under their respective 10 day moving average and have negative Real Motion divergences.
  • These 3 indices, large-cap weighted, had negative performance for 5 days while small-cap stocks were positive.
  • The McClellan Oscillator flipped once again to a slightly negative reading
  • Volatility holding above 20 and indicating that fear is still simmering below the surface of the markets.
  • Value gaining verses growth and growth diverging from leadership over SPY.
  • Positive movement in Banks (finance) and Energy (rising crude prices and Oil Services) are propelling value’s resurgence.
  • Emerging markets (EEM) one of few country ETFs that are above the 10 DMA.
  • Soft commodities (DBA) were very strong and are breaking out on our triple play indicator versus SPY on both weekly and daily charts.
  • Gold (GLD) and precious metals have issues as Gold broke down yet again under the 200 DMA.
  • Long bonds (TLT) are bouncing off oversold levels.
  • Clean Energy (PBW) and Solar (NYSE:TAN) ETFs having kept extreme leadership position the past six months, but lost steam or is mean reverting and went negative for the past 5 days.
  • Mixed Signals in sectors performance this past week as there was a positive week in retail (XRT), energy and semiconductor stocks (SMH) while consumer discretionary (XLY) and technology (XLK) were down for the week.
Market Sending Mixed Signals
 

Related Articles

Anna Coulling
Where Next For Tesla? By Anna Coulling - Nov 26, 2021 1

In the pause point of celebrating Thanksgiving and a four-day weekend, I thought it would be a good time to review some stocks and have decided on the daily chart for Tesla...

Market Sending Mixed Signals

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email