Market Health Tracking

Investing Strategies Technical Trader's Sanctuary
223

4/8/25

Gundlach “wouldn’t use cash yet” “Odds favor a recession, at this point hard to see how we avoid it” “looking for 4500 on S&P since we broke down earlier in the year, would get a durable counter trade off of that”.

○ The CBOE Volatility Index, known as the VIX, spiked above 60 for the first time since August. The last time the gauge hit those levels was on Aug. 5 when the Nasdaq fell to its 200-day moving average before rebounding.
○ On Monday, the Dow Jones Industrial Average declined 0.9%, or 349 points, while the S&P 500 fell 0.2% and the Nasdaq edged higher.
○ But the jury is still out on whether the stock market has put in a bottom. As long as indexes remain below the 200-day moving average, risks abound. Tariff wars and upcoming earnings compound those risks and it is best to proceed with utmost caution.
○ Naz closed at 52% of the trading range.
○ Small caps on the Russell 2000 outperformed in the early going, rising 2.6%, but fell 0.9% at the closing bell.
○ Of the 11 sector SPDRS, tech had the best day and equal-weighted tech was even better.

Earnings season kicks off this week with JPMorgan Chase (JPM), Morgan Stanley (MS), Wells Fargo (WFC) and BlackRock (BLK) reporting their first-quarter earnings on Friday

**I appears I did not post this from yesterday.

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4/8/25 - an exemplary day…

it showed us what to expect for next few weeks or months. Any word, any rumor can cause a 4% move. Trump loves to be ambiguous, so it is really hard to invest on something he says. “we’ll just have to wait and see”, “there will be h3ll to pay”, “many people are calling me” (and saying what?)

Somehow, we are in day 2 of an attempted rally, but it is hard to imagine a reasonable scenario that gives us a good FTD in the next couple weeks. Is everyone going to cave? Is China going to cave? Are we going to drop the 10% all-around tariff? What is that positive news that gives us a V-shaped recovery we are scared to miss out on?

IBD:

But keep in mind that follow-through days can fail, especially when there’s not a lot of merchandise to buy. After the recent selling in some gold, insurance and utility stocks, leadership is even more out of focus now.

The cumulative Trump tariffs work out to nearly $1 trillion in tax hikes on U.S. importers. At 3% of GDP, that’s the biggest U.S. tax hike since 1942.

In the video, they mentioned this wise reminder…
David Ryan says as you go up, a lot of people are going to want to sell.

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225

4/9/25 - Delays from Trump, end market Slump.

[Once again, I forgot to summarize and post my notes last night, here they are in raw form]

• Brad Gerstner (Hedge Fund guy) talked to a number of Tech CEOs today and this is the kind of framework they needed to see. Important start but more work to be done. They were very concerned about Peter Navarro’s stance, (too radical and impossible).
• Gerstner says we are now in a better place than on April 2 yet prices still way below that.
• Does the market now believe that anytime it goes down enough, it will be bailed out, thus a Trump-Put like the old Fed-Put.
• Will importers now stuff their warehouses for the next 90 days so they can skate by the following 90 days? Or will there be so many concessions importers won’t feel that is necessary.

IBD: day 3 of attempted rally
○ Tariffs delayed 90 days
○ The Dow Jones Industrial Average leapt 7.9% in Wednesday’s stock market trading, its biggest gain since March 2020. The S&P 500 index vaulted 9.5%, its strongest performance since October 2008. The Nasdaq composite spiked 12.2%, the best gain since 2001.
○ Software Sector ETF (IGV) soared 11.65%, with Microsoft and Palantir stock key holdings, along with CrowdStrike. The VanEck Vectors Semiconductor ETF (SMH) surged 17.7%. Nvidia and Taiwan Semiconductor stock are two huge SMH members. ARK Innovation ETF (ARKK) raced 16.6% higher
○ If a follow-through day happens soon, enter gradually. The risks of a failed FTD are high given the sharp sell-off and headline-driven market. A FTD could fail right away or hit resistance at the 200-day line. Very few stock charts look healthy
○ CPI early Thursday
○ Wednesday was a classic relief rally, with investors clearly relieved that Trump tariff pressure eased somewhat. Will that momentum continue or will the market waver or resume a retreat as tariff concerns remain high?

○ First, big up days by themselves do not guarantee an end to the bear market. Decades of stock market action prove this. Let’s go to the two-month period of March and April 2020. As the global Covid-19 pandemic shut down economies around the world, the Nasdaq plunged from a then-high of 9,838 to 6,631, a 33% shellacking. Near the end of that decline, the Nasdaq posted a flurry of huge up days. But none of them alone turned the market around.
○ On March 10, 2020, in the middle of the stock market’s selling avalanche, the Nasdaq composite jumped nearly 5%. But then the index dropped hard the next two sessions. The next day, bargain hunters propped the Nasdaq up 9.4%. Two days later on March 17, the index leapt 6.2%. Volume was intense. (None of these were the bottom)
○ Eventually, sellers got exhausted. The Nasdaq bottomed out at 6,631 on March 23. That session showed a big intraday swoon. But curiously, by day’s end, the tech-rich index finished only 0.3% lower. It also finished nicely in the upper half of the day’s trading range. Put another way, the tide began to show signs of turning from a heavy supply of shares from willing sellers to emerging demand from hungry buyers.

The CNN Fear and Greed Index, headed into Wednesday’s rebound, stood at the “Extreme Fear” zone at 3 on a scale of 0 to 100

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226

4/11/25 (Friday) Walking on Sunshine

A nice up day to convince us the coast is clear, but it is not. While the markets had a big day, the volume was lighter, so it does not count as Bill O’Neil FTD. Webby calls it an “FTD in Spirit”, but a dangerous one. He has had Swing Trader in cash for the ride down, and Fridy had them put on their first two 1/2 positions, the SPY and the QQQ. Nothing leveraged and no “heat” stocks. He warns us to be very cautious.

Naz and S&P are below 200, 50 and 21dma. Webby is waiting for three days above the 21dma before getting more aggressive.

IBD:

Friday’s action shows that markets are looking for a reason to rally, and Trump could provide one with a series of deals that resolve economic uncertainty by limiting tariffs on trading partners such as the European Union, Japan, South Korea, Mexico and Canada.
…
In the meantime, investors are advised to largely stay on the sidelines and focus on stocks that aren’t especially volatile, with an average true range of around 3 or below. That metric is available on IBD’s MarketSurge.
…
Late Friday, the Trump administration exempted Apple products, including the iPhone from the additional 125% tariff on Chinese goods and 10% baseline levy on imports from other countries. Also exempt: Other smartphones, servers, memory chips, solar cells, flat panel TVs and many other tech goods that are often made in China. That includes Nvidia, Dell Technologies (DELL), Hewlett Packard Enterprise (HPE) and Super Micro (SMCI).

Note from Friday Video with Webby

○ “Even if we had the volume Friday, the market is not in the right position and we would be a little suspect with it”. But we have some encouraging signs, but still very cautious.
○ That big blue up bar Wednesday was “normal and natural” in a market like this. Probably just a short squeeze. Thursday and Friday actions were normal as well. Want to see the price bars getting shorter as investors “decide” on a proper price.
○ 17,238 on Naz was a recent low and Webby says that is acting like a magnet and that is where the shorts want it to go (because they want to make it fail to break above that and thus be able to go short again)
○ Alli dipping her toe in with small positions in SPY and QQQ, nothing leveraged.
○ Webby had Justin go look for the biggest days in the market so we could see what happened afterwards. (See the 14 minute mark, really worth watching)
○ “When they work, you get above the 21dma and your low gets above it for 3 or more days” Pete notes that the Naz was turned away at the 21dma on Wed, but we could still overtake it.
○ Webby “There are a lot of double bottom bases out there, more than I’ve seen since probably 1998”
○ Webby is looking for stocks that did NOT test the 200dma in this decline (e.g. SPOT)
○ We might get a tradable rally here, but we are not going to take anything too seriously until we get above the 200dma because you could have a lot of damage"
○ Webby notes that the chance of a follow through working is 50/50, and he suspects the odds are lower here, but he has not done the work.

Edit: Futures are up since Trump exempted some items from tariffs. We will want to watch how the market closes Monday, will it reverse the gains or finish near top of the range. That will be expository.

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4/14/25 - No FTD for you!

Markets couldn’t pull out price and volume. Good, I don’t think it would be a successful one at this moment. Trump says he is reducing some tariffs, the Lutnick says, but just for a minute. Market up, down, up.

Naz was once again turned away by its declining 21dma and S&P is still trying to move up and test it. I would prefer to see them creep above the 21 and stay there, then have an FTD. But you don’t always get what you want.

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4/15/25 Forever, no Never 21

Turned away at the 21dma again. Tomorrow will be a good day to watch. Nvidia late Tuesday said it would take a $5.5 billion charge related to exporting H20 GPUs to China, so NVDA was down 6% after hours, dragging futures with it. (QQQ down 1.24% after hours).

How bad will it be? Will there be an upside reversal?

Lots of good stocks in double-bottom bases, which IBD says are common bases in choppy markets. PLTR, CRWD, MELI, NFLX, SPOT

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229

4/16/25: I fell into a burning ring of fire.

NVDA drags market down, then Powel kicks it in the nads. Powel essentially told the “market” that there is no Fed put, the “market” did not like that. The problem with inflation from Tariffs is that is cannot be controlled by interest rate changes, the Fed does not have as much power to fight it.

Naz went below the bottom of the 4/11 upside reversal day, S&P did too, but only by 2 cents. This is a place where swing traders might have had stop losses in. Maybe Naz can hold 16,000 and S&P 5,000. Just grasping at straws.

One day soon, Trump might come out with a big deal on tariffs with Japan or Europe and we take off again. Very hard to invest in this market. Maybe Gold is the easiest.

Market Closed on Friday. Good!

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4/17/25 (Thur) NFLX and Chill?

Naz and S&P faded off highs today. The S&P 500 rose 0.1%, while the Nasdaq composite slipped 0.1%. Also, the small-cap Russell 2000 gained 0.9%

Both still below 21dma. Still in day 9 of attempted rally.

NFLX up 4.4% after hours in earnings report, is this enough to spark a rally. Hope not, it would sucker me in and there is too much doom in the air.

IBD:

The market may simply need more time, perhaps even another leg down, before a sustained uptrend takes hold. That could involve a tradable rally, with the S&P 500 running up to, say, the 200-day moving average before falling back.

What investors need is a clear market uptrend, emphasis on trend. One good day or intraday bounce off lows is not a trend.

The risks of a failed follow-through day are high

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4/21/25 - I will paste in later

4/22/25 - FTD, but lots of weaknesses to worry about.

Dow Jones Futures Jump On Trump’s China, Powell Comments;

  • Trump: “I won’t fire Powell”.
  • Bessent: China tariff war is unsustainable, expect resolution in near future (is this knowledge or stating the obvious)

The tech-heavy index surged above the 16,000 level, rising 2.7% in higher volume. Also, the Nasdaq marked a follow-through day on the 11th day of the rally attempt, along with the S&P 500, which jumped 2.5% in higher volume. Russell 2000 small-cap index each rose 2.7%.

But a follow-through day is supposed to convey power and strength, and that was missing to some extent Tuesday. The Nasdaq briefly poked above its 10-day moving average but eventually closed below it. The S&P 500 closed right at its 10-day line. Overhead supply is still an issue for both indexes after sharp sell-offs. Both still below 21,50,200dma

Naz and S&P are both below 21, 50 and 200 dma. Need to get that fixed.

CNBC talking head chatter:

  • Lowest EPS beat rate in a long time (but early in the reporting cycle)
  • Expectations are very low
  • Weak dollar helps mitigate tariffs (charged on our goods, but makes imports even higher?)
  • Wealth effect is negative
  • Bessent: China tariff war is unsustainable, expect resolution in near future (is this knowledge or stating the obvious)
  • Market is overpriced if we have a recession.
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4/23/25

The markets gapped up on the open, with Naz up 4.5% at one point. This put them above their 21dma, but it was all downhill from there. They finished with a gain, but also finished below the 21dma and gave up nice gains in a show of weakness. Still lots of work to do. Remember the Webby review of past big downtrends like this, we need to see daily swings get much smaller before it really starts a sustainable run.

IBD:

A pause around current levels could be constructive, letting more stocks catch up or forge handles. But a close below the lows of Tuesday’s FTD would be highly bearish.

Despite two days of strong gains for the indexes, IBD’s recommended exposure stays at 0%-20%, mostly because of a lack of buy candidates at the moment.

Useless prediction: pretty flat day tomorrow.

.

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4/24/25

Naz and S&P mark third consecutive up days. The S&P 500 index popped 2%, its first three-day streak of 1%-plus gains in two years. The Nasdaq had its third straight 2%-plus gain, the first time that’s happened since April 2001. With that and the strong moves above their 21dmas, IBD has raised exposure to 20-40%.

IBD:

Investors can be adding more exposure, doing so gradually. If the stock market rally has legs, it won’t take long to go from, say, 20% invested to 90% even with incremental buys

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234

4/25/25 (Friday) - Forever 21

Markets kept their low above 21dma, with that and recent strength, recommended exposure goes to 40-60%

50dma looking like a magnet, but 200dma could be a bridge to far for this rally. Watch for 3 closing lows above the 200dma before you get too excited about being above it, should that happen.

Friday video with Webby
○ The 200dma has rolled over and the 50dma is still declining. That is a problem (or worry) Getting above 200day “is a really big deal” "we will want to scale some back around 200dma because there can be a lot of bouncing around that.
○ Bear markets can have rallies that can last weeks or months but then fizzle out. [one scenario is tariffs talks look good for a while, then there is a big failure]
○ We are in wave 2 and we don’t know if there will be a wave 3. In 1998, wave 3 down started when the rebound was stopped by the 200dma. We are now headed to the 50dma, and then next would come the 200dma.
○ They also looked at Jun 2008 market. At that time there had been a nice tradable rally (with lows above 21dma). It was able to poke above 200dma for a day, then below for a couple weeks, then started heading to new lows. It never had lows above the 200dma, much less more than 3 days with lows above it. [Great indicator for us to remember]
○ Remember, with the IBD methodology, the power trend is where you make most of your money.
○ If you have been in all cash, and did not buy this week, then trading up here is “out of position”, you want something to trade against [like a move above the 50dma]. Using the low of the FTD, is way too far way. Even the 21dma is getting a little far.
○ Right now you are not trying to make money, you are trying to preserve mental capital.
○ MELI: Webby building a position, but will sell before earnings if he does not have a cushion RS blue dot.
○ SPOT: Ali has a position, Webby sold his to concentrate on a different trade (PLTR). On a double bottom, you want to see the second leg up with good power “straight up” because shorts are getting squeezed by the support at the double bottom. RS blue dot.
○ PLTR: Ali reestablished her position on Wed when it moved above the recent high and the $100 level. (sounds like she went all in knowing she could sell if it fell below that point) RS blue dot.
○ During a power trend, Webby might try the shotgun approach, because that is when it works. When you are getting a “turn” like right now, he will concentrate on the leader, if you can spot it. Webby bought PLTR basically the same as Ali He will exit below $100.
○ Next week we want to see the market building on this week or having and “inside” week. If we see a low below the start of the week, that will be bad news.
○ Look for stocks that never fell below the 200dma and then look for good entries. Don’t get FOMO. Make a game plan for next week.

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Help me understand, are you saying that they are saying we are in a power trend?

I haven’t really found much in the Market School stuff specifically identifying a power trend, but from other IBD stuff I have seen:

Blockquote How To Recognize A Power Trend

300×161 14.7 KB

A power trend starts when these four things take place simultaneously on a major index:

  1. The day’s low is above the 21-day exponential moving average (EMA) for at least 10 days.

  2. The 21-day exponential moving average is above the 50-day simple moving average for at least five days.

  3. The 50-day line is in an uptrend (one day is sufficient).

  4. The market closes up for the day.

A power trend typically ends when the 21-day crosses back below the 50-day.

We’ve got a bit of a ways to go to be in that position. Would love it if we get there.

Lakedog

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236

NO! They are reminding that the money is made once you are in a power trends. So maybe they are implying not to get FOMO because you don’t really miss out until then.

Yes, you correctly identified the criteria.

For now, we need to get above the 50dma and hold that. Then the 200dma will be a looming barrier that could easily crush our hopes.

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237

4/28/25: Flattish day.

Still have lows above 21dma, but a nice quite day. We have had a good run up, don’t want to run too far, too fast.

Still waiting for a big tariff announcement to help put a floor under the market.

Lots of econ news this week.

Tuesday from the Conference Board’s consumer confidence report for April, and U.S. job openings and turnover data, or JOLTS, for March. Wednesday’s ADP report follows, with economists estimating job additions of 125,000 for April. Also on Wednesday, first-quarter GDP is expected to remain unchanged in February after a 0.4% monthly increase in January. On Friday, the U.S. employment report for April is due. Consensus estimates indicate the world’s largest economy added 130,000 jobs after March’s 228,000 adds.

Big earnings:
First-quarter earnings season heats up this week, with results from Apple (AAPL), Aazon.com (AMZN) and Meta Platforms (META), along with Exxon Mobil (XOM), Chevron (CVX), Caterpillar (CAT), Pfizer (PFE) and Eli Lilly (LLY).

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If tomorrow is above the 21 ema that is 3 days above. That is a big deal and the market is proving it’s strength.

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239

I agree. While it is true that the candles are showing progressive weakness, that is fairly common and this maybe a quick breath. The hard part is that hangman and dragonfly doji’s that we just got on the indices are most often looked at as bearish. Often indicating reversals. However, they can represent strength in that the attempt to sink by bears was rejected by the bulls with a return back to the “top.” The bottomline is that it amonts to indecision, so we are most likely at the whims of earnings and White House verbage. Personally, I’m positive, especially about my stops.

Lakedog

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240

4/29/25 - 3 little birdies, above my trendline, singing this is my message to you-ooo-ooo-ooo

Naz and S&P closed with lows above the 21dma for third consecutive day. I think I heard them say Webby wants the third day to be an up day to really count. (and it was)

Markets up, got a little boost at end with rumors that a trade deal is agreed upon with India, just waiting the Indian parliament to approve. We shall see. This is a good domino to be the first to fall. Getting UK would be nice, getting Japan or EU would be major. Could get us above 50dma where we await 3 more birdies.

Sounds like the “big beautiful bill” is making good progress as well.

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241

4/30/25 - The Sun Will Come Out Tomorrow

Market started bad, but tame core PCE inflation eased concerns from negative Q1 GDP and weak April job growth. This allowed the S&P and Naz to rebound off their 21dma and closes at session highs. Looks like the S&P had a low slightly below the 21dma but Naz seems to have stayed above it. MSFT and META drove up futures and may take the indexes above their 50dma tomorrow.

In the batter’s box..
weekly jobless claims data at 8:30 a.m. ET, with the April ISM manufacturing index and the March construction spending report at 10 a.m. ET.

Fed meeting next week.

SPOT and PLTR had very good action today. HOOD had a nice upside reversal as well, but finished slightly negative. NFLX is strong like bull.

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242

5/1/25 - Close, but no cigar

Markets got off to a great start after META and MSFT beat earnings and had upbeat forward guidance last night. However, the Naz went from a 2.7% gain down to 1.5%. S&P and other indexes also faded. We almost had an additional FTD, but volume was lower than day before.

The S&P and Naz gapped up above their 50dma, and managed to stay above them at the close. S&P was close to resting on top of the 50. META shot above 50 and 200, but finished below both. NVDA moved above 50 and then closed below. A disappointing result for the bulls. With AAPL and AMZN disappointing after hours tonight, indexes may fall below 50dma tomorrow.

The Aerospace/Defense group (4th out of 197) showed gap up and breakouts on earnings for HWM, DRS, and OSIS. TDG had a weak breakout but will report earnings in 5 days.

The Labor Department will release the April jobs report at 8:30 a.m

IBD:

With the major indexes gaining ground and leading stocks acting well, investors can keep adding exposure. Be careful not to get too exposed to a particular sector or theme, or focusing exclusively on stocks with high average true ranges.

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