Market Health Tracking

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Investors finally raise some cash in case Powell spoils the party tomorrow. Naz picked up its first distribution day and came to rest on the 50dma. Naz and SPY had outside down days.

Notably, Nvidia stock held above its 50-day line, while Tesla fell below that key level.

Tomorrow might be like a big earnings day.

Update: 8/24/24:
Yup, Fed day was like a big earnings day and they seemed to beat expectations. This big move on higher volume brought us the second “subsequent FTD” (more on this in a sec)

The S&P finished with the 21dma either overtaking the 50dma or becoming equal with it. When the 21dma makes this cross it is a sign of strength. The Naz still has a bit to go. The Naz daily low stayed above the 50dma, a good thing and the S&P has been doing so for longer.

Small caps up over 3%, they love falling rates and the Russell 2000 has lots of regional banks that want to see rates fall.

IBD’s analysis of all historic FTDs shows this…
• The first 3 days are important because if you see professional distribution on day 1,2, or 3, that is a yellow flag and rally will rarely be good. If 2 of first 3 days is distribution, there has never been a “Life Changer” rally after that. [no worries this rally]
• The first 25 days are also important, you want to see some subsequent FTDs, as major rallies average 2 to 3 subsequent FTDs and about 8 accumulation days. [We have already had 2 subsequent FTDs]

A subsequent FTD is 0.2% gain or more on heavier vol than the day before (the stronger the better). These show professional accumulation and correlate with better rallies. Heavier Vol and less than 0.2% rise is “stalling” [but I have not found out the difference between an accumulation day and a subsequent FTD]

Another powerful indicator is the “Power Trend”.
A power trend starts when these four events occur simultaneously on a major index:

  1. The [index] low is above the 21-day exponential moving average (EMA) for at least 10 days.
  2. The 21-day EMA is above the 50-day simple moving average for at least five days.
  3. The 50-day line is in an uptrend.
  4. The market closes up for the day.

looks like this could happen as early as next Friday now.

What I want to see next: NVDA earnings don’t hurt market. Naz 21dma rises above 50dma, a power trend starts on the S&P.

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8/27: everyone just hanging around waiting for NVDA earnings tomorrow night. Know what you want to do with your AI-related holdings if NVDA tanks or soars. What non-AI stocks do you want to pick up if the market tanks?

Update: 8/28/24: NVDA beats EPS, Sales, and outlook. Announces $50B buyback, so of course it is down and dragging the futures down with it. OKTA and NTAP beat, but also fell. No one wants to buy beats? Somone said NVDA is beating the estimates by less each time, so maybe that is the problem. You aren’t beating the estimates by enough! Bad Stock!

Is all the good news built into the market for a while? Everyone betting on 100 basis points in September? Will the Larry Williams precedent chart overlay come true and bring us to a bottom in September?

We can’t know, just take it day by day.

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8/31/24 (Friday). Market still looking good. The S&P 500 has entered a power trend, adding another sign of strength to the lucky charm bracelet. The Naz is forming a handle but it is vibrating around the 50dma. We need to see it start closing above the line and then we need to see the 21dma rise above the 50dma. Then a power trend would be a great sign.

AVGO is the important earnings report this week, though it should align with NVDA and other AI chip plays. They have said their non-AI chip product lines are putting in a bottom, so forward guidance may be better than that for NVDA.

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9/3/24 - Terrible Tuesday…
The market was bad today and it went beyond just having a big down day. This was an expectation breaker at several levels.

We got by NVDA earnings without much pain, then we got by PCE on Friday. Friday finished with a nice surge at the end, but that was most likely end of quarter fund rebalancing. We could expect a small decline to offset that artificial buying on Friday. What we got was a huge down day. We could also expect that the new S&P power trend would take us to new highs. The Naz opened below the 50dma and never looked back, ending with a 3.26% loss on higher volume. The S&P fell 2.12% but was able to find support at its 50dma.

This was a big expectation breaker and must make us rethink the near-term future. Will the decline continue? Will we retest the lows of 8/5? Will Larry Williams’ chart pattern prediction be right when it says we won’t rebound until mid-October? Or is it another 1-3 day correction?

The Nasdaq, which has been lagging for weeks, led Tuesday’s downside. The Nasdaq is now below the top of its Aug. 13 follow-through day. A close below the FTD low would be a very bearish sign.

Due to the Nasdaq’s weak price action, IBD lowered the recommended invested percentage to 40% to 60% from 60% to 80%.

That means it’s time to trim some holdings by taking partial profits in some of your winners. You could even take full profits in some stocks that are up at least 20% from your purchase price.

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Double-top on S&P weekly chart. Not looking good at the moment.

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9/4/24 Markets down a bit, but on lower volume. S&P holds at 50dma - critical. Naz almost undercuts the low of the FTD - critical. Look back at the early August plummet and you will see day two was much worse and much different from this day 2. Gives me a little hope.

Update 9/5/24:
Once again, markets up in the morning, but down by end of trading - shows weakness. The S&P closed below the 50dma - shows weakness
The Naz was up a bit, keeping it from falling below the low of the FTD, which historically a bad sign for a rally.
Labor number out Friday, can they change the market?
In the end, it seems certain we will get 100 basis points of Fed cuts by end of year, that has to put a floor on the market, but where is that floor?

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Friday 9/6/24 - Fugly Friday!

The S&P 500 tumbled 1.7% for the day, which slammed it below its 50-day moving average (finally joining the Naz). It also turned in a painful weekly drop of 4.3%, its worst since last year, while its year-to-date gain has atrophied to 13.4%.

The Nasdaq composite had the toughest time among the major indexes Friday, plummeting 2.6%. Its weekly decline of 5.8% was its worst since January 2022. It ended the week below the low of the Aug. 13 follow-through day and sits just 2.5% above its 200-day moving average.

SMH below 200dma. Russell falls 1.9%, slicing well below its 50dma.

IBD drops exposure to 20-40% from 40-60%, but I think in previous terminology they would have said “Market in Correction”. I suspect they want exposure at 0-20%, but didn’t want to jump to that correctly.

Look at the market charts for last fall. Are we looking like a 3-waves down again? Just keep that as a possibility. Is Larry Williams right - bottom around mid-Oct?

Eric Krull, a friend if IBD, once tool all their FTD-rally data and analyzed every FTD rally (I forget the time range, 1900? 1950?) He found they fell into 4 categories, as displayed in the graphic below. The lines are averages of each category and run into the 25th day of the rally. You know, but you can see that this rally (red line) is a bad one. It is tracking like a “Whipsaw” and is all but over. Not that we had hopes the Fed will do a surprise 50 point cut on Monday.

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Update: 9/9/24:
Positive day for SPY, NAZ, but still below 50dma, low volume and an inside day for each. Most likely an oversold bounce. Watch to see if they can move above their 50dmas this week.

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Is what I said on the big down day last Friday. Since then, we had two small up days then the big day today. Now if IBD had set exposure to 0-20%, then that would have been saying the market was in correction. The first small up day would have been day 1 of an attempted rally. This would be day 3. IBD dogma is you want an FTD in day 4-10, but it has taken more than 10 days in some cases and in one case day 3 qualified. In that case I recall the BID guys reminiscing about Bill walking around asking why they were not buying on a FTD. They said “Bill, it is day 3, you said that doesn’t count” and Bill said “Look at it, it is a FTD, buy something”. (I am paraphrasing my recollection of their recollection).

Anyway, today was very important. The reversal was on strong volume, the S&P is back above the 50dma and 21dma. The Naz is approaching the 50dma, but still below it. IBD raised exposure to 40-60%, but they warned us to stay cautious, saying…

You can choose to take some pilot positions, but keep overall exposure low and be ready to exit quickly.
There’s nothing wrong with waiting for real confirmation that the market uptrend is back on track. But don’t get stuck in a bearish — or bullish — mindset. As the market changes, you need to adapt.

We need to see higher volume gains and lower volume declines to make us feel properly bullish.

Mike Webster wants to see the S&P above high of 8/1 (start of last decline). It made it right there today, so if it goes above tomorrow, we may see exposure increased.

Next week the Fed cuts, that will resolve some uncertainty one way or the other.

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9/12/24 - another good day.
Markets added to their positive action with up days that saw Naz (and NVDA) retake their 50dma. S&P closed above 21dma yesterday and powered up another notch today. This influenced IBD to raise exposure to 60-80%, a day before I thought they would.

In addition, we are seeing leading stock breaking out or setting up in bases.

9/13/24 - another nice day. NAZ low was above the 50dma. Breakouts are working. Fed cuts rates Wednesday. Exposure Recommendation stays at 60-80%

||○ The stock market ended the week in bullish fashion, with indexes recouping most of their September losses. However the next Fed meeting and a slew of economic data await investors in the coming week.
||○ The Nasdaq composite had another solid session Friday, rising nearly 0.7%. Its muscular weekly gain of 6% was its best of the year and means it is now down just 0.2% in September, quite the turnaround in fortunes from just a week ago. It ended the latest week back above the 50-day moving average, a bullish sign. The tech-heavy index now holds a gain of 17.8% so far in 2024.
||○ The S&P 500 rose 0.5% It pulled further clear of its 50-day line and ended the week above its short-term moving averages to boot. Its own weekly lift of 4% means it now has a loss of just 0.4% for the month. It also holds a meaty year-to-date gain of 18%.
||○ Small caps rallied furiously, with the Russell 2000 jumping 2.5%. This allowed it to recapture the 50-day line. Growth stocks also popped.
||○ Nvidia (NVDA) CEO Jensen Huang said demand for the company’s AI chips is incredible and said production of its next-generation Blackwell chips is in full swing. Nvidia stock surged, lifting other AI plays and the broader market.
||○ Arista Networks (ANET), Interactive Brokers (IBKR), Shift4 (FOUR), DoorDash (DASH), Royal Caribbean (RCL), Meta Platforms (META), Sea (SE) and Microsoft (MSFT) are flashing buy signals
||○ The Federal Reserve meets on Tuesday-Wednesday. An official statement is due at 2 p.m. ET on Wednesday. Fed chief Jerome Powell will speak at 2:30 p.m. ET.|
||○ A small Fed rate cut or Powell signaling that future moves will be gradual could disappoint markets.
||○ The stock market rally was a positive expectations breaker this past week after the prior week’s ugly, expectations-breaker sell-off
||○ The S&P low of Wed was testing Friday’s lows and the lows of 7/25. Bears and algorithms would be trying to push it below that level to cause a freefall, but they could not do it and it reversed up.

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9/18/24 Buy the rumor, buy the news, sell the news.
For a six minutes there, the markets loved the 50bps cut, but then they did not. Was it the algos killing it or humans? Doesn’t matter, we had an ugly reversal that added a distribution day to S&P and one to the Naz. So Naz has 6 and S&P has 4 so traders need to get a little more cautious. The Friday close will likely be an important indicator.

Eight stocks in the IBD MarketSurge 250 index topped buy points; in all cases, they finished below their entries

9/19/24 - Market makes up for yesterday in spades. Some say it was foreign investors getting their first crack, some say the algos and day traders just made the market goofy yesterday. Either way, today was very bullish with big gains and lots of breakouts. Naz well above 50dma and above the 18,000 round number. S&P strong, I think vol was high so it might be a subsequent FTD.

The Nasdaq’s Sept. 3 distribution day dropped off the overall count. When an index moves up 5% from the closing price of the distribution day, then it is considered no longer relevant to the current count. Now we have 5 distribution days for Naz and 4 for S&P.

Thursday’s rally was more evidence of stock market strength following Wednesday’s hesitant action. That results in IBD’s recommended market exposure level being lifted from 60%-80% to 80%-100%.

This is when investors should be looking to step on the gas, moving toward fully invested or even on margin if that’s your risk tolerance. Don’t accelerate like you’re in a Tesla, even if you own TSLA stock. Add exposure — which already should have been significant heading into Thursday — gradually.

Also consider rotating out of defensive and even defensive growth names to make room. There’s been a clear shift into growth and aggressive growth, especially into AI and other tech plays

Options expire Friday.], might cause some oddities.

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Friday 9/20/24

A lot of churning Wednesday, possible algorithm turmoil after Fed spoke. Looks like institutional investors digested all the data Wed night and came back strong Thursday. Friday was a normal small decline after a large up day. Market is bullish, keep and eye on the 21dma as your primary indicator.

IBD (Dist N6, S4) Naz adds a distribution day to take it to 6 with S&P at 4. IBD recommends 80-100% exposure.

○ The Nasdaq composite fared worst among the major indexes Friday, falling 0.4% and adding a distribution day. But it posted a solid weekly increase of 1.5% and a monthly lift of 1.3% thus far. The tech-heavy index sits comfortably above its 50-day moving average and its year-to-date gain now sits at 19.6%.
○ The S&P 500 dipped 0.2%, but it was fractionally too low to count as a distribution day. The benchmark index notched a weekly rise of 1.4% and it, too, is now positive for the month. The index is sitting pretty above its short-term and major moving averages and also shows a 19.6% move higher thus far this year.
○ Small caps were mauled by the bears, with the Russell 2000 falling 1.1%. Still, it was not enough to stop it posting weekly gain of 2.2% though
○ A pause at current levels would be normal and healthy, perhaps allowing leading stocks to forge handles or other entries.
○ Broadly speaking, there’s been a shift from defensive sectors into growth, including aggressive growth. Homebuilders and financials continue to do well, along with aerospace and other industrials.
○ So this is a good time to be heavily invested and perhaps focus on aggressive holdings. If you’re still modestly invested, there are still opportunities to add exposure, but do so gradually.
○ But always have an eye to exit. If the Nasdaq falls back toward the 50-day line and growth falters, perhaps dragged down by Nvidia, listen to the market.

Fridays with Webby…

○ “feels like we are starting on a new leg higher”

○ S&P weekly shows what looks like a cup with handle that we are just launching out of. So now we expect a move higher.
○ Back on 9/11/24, the market was going down and nearing both a recent bottom and some important support from back in late July. The bears gave it all they had to push it below that point, and if they succeeded, we probably would have gone down to the 200dma. But they did not have enough ammo. The market had an upside reversal and at that point Webby knew we were in for a strong rally.
○ Webby always says the Thursday and Friday after the Fed are the days that show the true reaction. Big investors have contemplated the impact overnight and adjusted all their estimates and know what they want to buy or sell.
○ Friday was quad-witching day, which can be an odd trading day.

○ Webby being cautious because we have had a number of expectation breakers. He is very bullish, but investing more carefully than that feeling.
○ Does not want us to whoosh up too fast.
Remember, on 8/30, we started a new power trend on the S&P. But the next day we had an expectation breaker and the market fell 2%. A couple days later we sliced below the 50dma. The 21dma was still above the 50dma, so the trend was “under pressure” but not ended. If the price low stays above the 21dma for 10 days, then the power trend is in full force again, and we are almost there.

9/2524: slogging along. Would like to see a couple boring weeks of consolidation vs a 3-day plunge like recently. That would give stocks time to consolidate, finish bases and build handles. But you never get what you want.

One more up day on S&P and we are back in a power trend. In the chart below, the straight red lines are periods of the last two power trends…

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War, what is good for? Absolutely nothing.

The market sold off on threats of war as it always does. No one knows how bad it will get, so they just sell. Modern wars have tended to have short term impacts on the market.

This latest attack on Israel seems to be different than the others. I believe Israel is ready to go after the Iranian nuke program. Last time the US said “take the win” (i.e. don’t retaliate). This time the US said we got your back AND we will participate. There is a good chance that it makes it a one-time response and Iran gets put in a box because they will finally be afraid of the US again.

The Naz was down 1.5% and added a new distribution day. It did find support at the 21dma. IBD notes that only 2 of the 6 distribution days are big down days of more than 1%.

As of 9am, the market futures indicate a small decline.

10/2/24: sleepy day. Naz tested 21dma again and reversed up. Major indexes closed slightly up. Waiting for Israel to respond??

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10/8/24

○ The Nasdaq jumped nearly 1.5% in higher volume, picture-perfect price action for the bulls after the index marked a distribution day Monday. The Nasdaq is back above the 18,000 level with its sights now set on its late-September high of 18,327. A decisive move above this level would qualify as a bullish breakout.

○ The S&P 500 added 1% in lower volume, while the Dow Jones Industrial Average and Russell 2000 small-cap index lagged with gains of 0.3% and 0.1%, respectively.
○ The major indexes remain in a tight range. That’s allowing a lot of quality stocks to set up again. A new batch flashed buy signals Tuesday, offering an opportunity to add or reshuffle exposure.

○ In a note to clients on Monday, Ed Yardeni of Yardeni Research called S&P 500 operating forward earnings per share the best leading economic indicator, one that captures analyst consensus estimates for index constituents during the current year and coming year. While this leading indicator doesn’t anticipate recessions, it is available weekly and closely tracks actual quarterly S&P 500 operating EPS, he said.

○ And, he added, it is flashing bullish signals ahead of another S&P earnings season: Forward earnings rose to a record high during the Oct. 3 week. It dipped during (the) second half of 2022, bottomed in early 2023, and has been rising to record highs since late 2023.

○ in a note to clients on Monday, a Bank of America analyst team called the Fed’s emerging rate-cutting cycle a positive for U.S. banks. Rate cuts that lead to rebounding customer activity and a positively sloping yield curve (are) structurally bullish for bank stocks, they said. That rebound would drive positive EPS revisions and a further re-rating higher in bank stock valuations. The analysts added they prefer regional banks on potential to defend net interest income.

○ For banks… A (Donald) Trump win likely seen as positive for relief on the regulatory and M&A fronts. Whereas a Kamala Harris-led Democratic sweep could be the most negative outcome, raising the specter of higher taxes and more regulatory upheaval.
○ Meta says something that makes investors think NVDA will have a great 2025. TSM reports Wed.
○ Chinese stocks sold off as policymakers didn’t announce fiscal stimulus, disappointing investors.
○ Lots of banks reporting this week and next.

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10/11/14
Good week with a strong finish. Indexes above 21dma. RSP acting very well, shows growing breadth. Cooling inflation and some bank earnings helped push the market up.

○ The Nasdaq composite rose mildly Friday, yet its 0.3% gain padded the tech-heavy index’s recent advance. At 18,342, the tech-fortified index chalked up its highest close since July 16. The Nasdaq now stands less than 1.8% away from its all-time peak of 18,671.

||○ The S&P 500 firmed up 0.6% for its fourth gain in six sessions, while the Dow Jones Industrial Average blasted nearly 1% higher to 42,863. Both indexes etched all-time highs.

○ U.S. Producer Price Index data showed mixed surprises. Yet inflation overall continued to revert closer to the Federal Reserve’s long-range target of 2%

○ The Russell 2000 coasted 2.1% higher Friday, raising its weekly gain to 1%. That snapped a mild two-week slide, and the Russell recouped all of that two-week loss and more. Still, as seen on a weekly chart, the Russell 2000’s relative strength line continues to fall. This means it’s lagging large caps.

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10/15/24
First “uncomfortable” down day for Naz since 10/1 (-1.53%). On 10/1, it touched the 21dma and found support with a bit of an upside reversal. Today the Naz did not even make it that far down, but it did close at the bottom of its range so I would expect it to try and test the 21dma tomorrow. The 50dma is not too far away. NVDA down 4.7%, ANET, MRVL, ARM and other AI-related stocks sold off. Was it because ASML earnings report show an unexpected drop in bookings (50%) and it sold off 16%?

Russell was up 1% but faded to barely finish positive, which is negative action.

Despite the stiff selling on the Nasdaq, decliners only had a tiny edge over advancers. But volume rose sharply from Monday, giving the index a distribution day. If distribution days start to cluster over a short amount of time, it could cause problems for the stock market uptrend. For now, it’s a manageable count on the Nasdaq and S&P 500.

All cruise ship stocks did well for some reason, Leaderboard stock Viking (VIK) reversed higher for a gain of nearly 2%. Viking is still in the 5% buy zone from a 37.25 buy point. But after five straight weekly price gains — and another taking shape this week — Viking could be ready to pause and consolidate.

For now, an invested percentage of 80%-100% still makes sense as major stock indexes stay on strong uptrends. Take stock of your current holdings by identifying the strongest performers and weaker ones. Funnel money into your winners when alternate entries arise, and pare down the laggards.

China stocks lagged badly in the MarketSurge Growth 250 as investors wonder if recently announced stimulus measures out of China will be enough to reignite growth. Futu (FUTU), JD.com (JD) and Trip.com (TCOM) all cratered around 9%. The latter erased a 20% gain from its 58 buy point.

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Minervini on the market.…
Bull Market Is Strangest In Years, Says This Top Trader. Here’s When To Get Aggressive. | Investor’s Business Daily (investors.com)

This is the Thursday Podcast that lasts about an hour, here is a snippet or to from the summary article…

“This is really strange,” Mark Minervini, two-time U.S. investing champion and founder of Minervini Private Access, tells Investor’s Business Daily’s “Investing with IBD” podcast.

He points to the volatility index, or VIX, remaining at elevated levels even as the stock market shows strength. “You can see now we’re hitting new highs (in the market), but the VIX is at those correction levels.”

The VIX is considered Wall Street’s “fear gauge,” and shows expected near-term price changes in the S&P 500. While volatility typically spikes during a pullback or correction in the market, volatility has recently remained elevated as a bull market continues.

“I haven’t seen that many times — if ever — in my entire career of 41 years of doing this,” said Minervini. “For me to get really aggressive, I’d like to see volatility come down.”

Minervini says the wider environment doesn’t need to be perfect to create a bull market.

“What can happen is you get a rotation, and get a bull market in midcaps or small caps, and that’s where the alpha is and the low standard deviation while you’re getting volatility in some other areas and it becomes more of a stealth continuation of a bull market,” Minervini said.

A strong bull market can also mask potential problems in stocks, Minervini says. Investors should always consider the performance behind the headlines, making sure a stock’s chart action supports an appearance of strong fundamental metrics.

Reviewing the charts is a key safeguard to finding the best stocks in a bull market. “If the earnings are great, the sales are great, the management is wonderful and it’s the best brand or biggest company in the world, I’m not buying that stock unless the chart confirms that,” he said.

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10/22/24

○ After a sharp drop Monday, the Russell 2000 eased 0.3% and held support at its 21-day exponential moving average. The Nasdaq composite reversed slightly higher for a gain of 0.2%. The Dow Jones Industrial Average and S&P 500 dipped less than 0.1%. And volume rose on the Nasdaq while it fell slightly on the New York Stock Exchange.

○ Despite a mixed and mostly unchanged performance for the major stock indexes, there was some selling below the surface on the stock market today. On a day that saw the market cap weighted S&P 500 edge lower, the Invesco S&P 500 Equal Weight ETF (RSP) lost nearly 0.5%. The Nasdaq 100 inched up 0.1%, but the First Trust Nasdaq 100 Equal Weight ETF (QQEW) gave back nearly 0.4%.

○ 10 year yields continue to rise. Small caps seem to be acting like bonds, going down when rates go up.

Update 10/23/24
Markets take a hit, only finish a little off their lows. 10 year rates up again. Naz stays above 21dma and lower volume prevents another distribution day. S&P stays at 3 distribution days because one fell off due to age (25 trading days) but it gained one on today’s increased volume.

Election soon. Lots of earnings soon.

IBD:

Investors should assess their portfolios. How much exposure are you comfortable with given so many risk events on the horizon. Do you have too much exposure to a specific sector or to speculative plays? Are your individual holdings looking damaged? Do they have sufficient cushion for upcoming earnings?

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10/29/24
Naz hits new high, S&P up, small caps fade, but finish positive and above 21dma.
Google up 5% after hours, pointing to an up open tomorrow morning. Lots of Big tech earnings to come this week.

The Nasdaq gained ground after the 10 a.m. JOLTS reported showed September job openings well below views.

But yields could be approaching a tipping point for stocks. Adam Turnquist, chief technical strategist at LPL Financial, finds the 4.3% level in the 10-year yield a line in the sand for equities. A foray above that seems to be pretty problematic for equity markets to absorb.

Traders are seeing a 25-basis-point cut during the Fed’s meeting on Nov. 7

Notes from Friday’s video with Webby…
○ QQQ tried to hit a new high and was turned away, so the assumption is we go back into the trading range. Of course we have massive earnings news this coming week, then the election.
○ Webby recalls that Bill would never look at interest rates and does not recall him ever discussing it. Bill wanted to keep it simple, if you are trading stocks, look at them and not bonds or interest rates.
○ SPY reversed to near 21dma on Friday and “it feels like it wants to test Wednesdays low”
○ Google “has been a dog”, but today it closed at highs while market closed near lows. Webby calls this a “setup day”. “Looks like money is starting to flow into this space”.
○ XLI was looking strong coming into the week, but had 5 down days “avoid it for now”
○ ISRG, not a classic short stroke, but similar.
○ ONON chart looks better than DECK (hoka) chart and you trade what looks best. Hoping it breaks to new highs, would “back off” if it fell below 50dma. Earnings in 18 days, so there is time to build a profit buffer.
○ Webby is NEVER worried about buying back a stock after getting shaken out. “That is something people should get over” If it provides buy signals, he will buy. He would have bought it (ONON) on Tuesday as it went above 50dma, but sold it on Wed when it closed below (expectation breaker), but would have bought if again on Friday (and he did buy today). If you keep your losses small, then you can make it all back with a good move.
○ DUO was strong at end of day when market was weak, Webby bought a little bit.
○ Homework: search for stocks that ended Friday in the to 25% of trading range and look through those for ideas.
○ ALAB: recent IPO. Not a textbook setup, but looks like an unusual cup with handle. Could have the “spirit” of a flag pole. Yesterday was a setup day and Webby bought some and added today, but does not like the way it sold off, closing at lower part to trading range, but is up 3% when market was off. Earnings soon.
○ TSM looks interesting as well. It had a gap up and then consolidated down. Moved up above downward trendline Friday. So expectations are that it stays above $200 and moves to new highs.

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10/30/24: Market took a break by fading a morning rally to end lower. Never like to see that, but SPY, Naz and IWM still above 21dma (or right on it). MSFT and META reported after hours, both down over 3%. MSFT plans big CapEx spending, but NVDA not up on that news yet.

While the stock market has softened a bit, IBD continues to recommend 80%-100% exposure. The number of distribution days is manageable.

Election uncertainty will end soon. Market generally like grid-lock. A single part controlling WH, Congress and Senate can do whatever they want, especially with the budget bills which do not need 60 votes in the senate.

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10/31/24 The hobgoblins of earnings came out early today and spooked the market. MSFT and META did seem to lead the charge down and the market charts got a bit ugly. S&P fell below the 21dma and then found support at the 50dma. The Naz also fell below the 21dma, but has a bit to go before testing the 50.

There have been huge earnings moves up and down this week. RDDT up over 40%, SN down 17%, TEAM up 18% after hours today, HOOD down 17%. Not a good time to head into earnings with a small cushion.

We have had a couple bad days, but AMZN was up 4.5% after hours on its earnings, perhaps this will stop the bleeding. But the main cause may be the yield on the ten-year, as it is up around the critical 4.3%. From April to mid-Sept it was steadily falling and the market was very happy. Since then it has gone up from 3.6% to almost 4.3%. The markets were able to ignore it for a while, but it seems like we are at an inflection point. New economic numbers almost every day and the election is Tuesday. I would not be placing big bets.

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