Ian Woodward's Investing Blog

Lesson learned:  It’s called “Buy the Rumor, Sell the News!”  Now the $64 Question is “Black Cross or Up, Up and Away?”  Well, I have to get my jollies sometimes, so as the highgrowthstock bb is mighty quiet here you go:

Although the “Market has Spoken” there is no Panic Selling since the volume is mediocre.  For what it is worth, I say again to Type 3 & 4 Long Term Investors “Keep your Powder Dry!”  Intra-Day Type 1’s play to your Heart’s content, since you are Nimble!  I leave you with my feelings:

Thanks to those who took the time to comment on my last note.  Best Regards,

Ian

The hour is late, but for my International supporters especially in the Far East they would like to get a feel for what is occuring on this side of the pond.  Bottom line is we are in Stalemate and bouncing up and down:

Let’s step back and put all that I do together using Impulse Indicators with both a Weekly and Daily Chart for the last few years.  I have kept you on the right side of the Market with Eurekas, Phoenix and Kahunas Up and Down:

%B has flip-flopped either side of the 0.5 line these last 5 days, so Bulls and Bears are in a tug-o-war:

More of the same showing the Stalemate:

Although there was a three Bucket down followed by a two bucket down day two days later, we are  near Stalemate:

…And here is the same thing using Accumulation and Distribution:

Last but not least, we are “All Quiet on the Western Front” with the VIX:

Best Regards, and Long Term Investors should keep your powder dry until this yin-yang settles down.

Ian.

With all the Fear and Uncertainty who would have thought the Market would be climbing up a Wall of Fear?  We shall see what today’s Greek Elections bring and as I write this the Late Breaking News is that “Greeks Back Bailout Party, and the New Democracy is the Projected Winner”.  It holds a narrow lead over antiausterity Syriza; they are expected to attempt to form parliamentary coalition, possibly with socialist PASOK party, projected to finish third.  Such a coalition could ease global tensions  by accepting bailout austerity, staying in euro zone.

The Market Indexes finished strong on Friday despite Options Expiration and all the uncertainty swirling from Europe.

At long last after three “Fakey’s” where the %B of the S&P 1500 has been turned back from reaching back up to the “Top Buckets” with strength for most of last week:

We immediately see signs of life in Grandma’s Pies after being in the doldrums for nine trading weeks:

This next chart is a relatively new one which is proving to be worthwhile.  I have focused on the 2x and 3x Bear ETFs for the last few Blog Notes to gain insight for an early clue as to which way the wind is blowing.  As you would expect, when the news is in favor of the Bears as it has been recently with four bad jobs reports in as many months, the %B spikes into High Ground Territory.  Conversely, when the Bulls are in control, %B for these ETFs drops BELOW the Bandwidth, and there it is shown ringed after Friday’s action:

Unless there  is a major negative surprise, the picture suggests that the Market will remain positive with %B holding below the Bandwidth red line for a while.  Below we have the twin picture that shows the Bears have lost ground with two days in the red:

Well that’s it for now as I turn my full attention to the U.S. Open where Tiger has faded and all my US and International golf friends are glued to the screen cheering on their respective favorites to win.

Best Regards,

Ian.

The Stock Market is neither Fish nor Fowl, waddling back and forth this past month with 12 Days down, 6 Days up, 3 Days down and 5 Days up so far…Only nimble Traders who are quick to turn on a dime may make money in this Market.

The Market Indexes are on a Cliff Edge waiting for either good or bad news…primarily from Europe this week with both Spain and Greece to contend with.  The Indexes are trying desperately to hold around the 200-dma with Inverse Head and Shoulders patterns to form before the hope is a New Dawning with a decent rally.

The Bulls cannot get too excited as seen by the next Chart.  Even if the Nasdaq breaks back up above the 2900 mark, there is stiff resistance where the 50 and 100-dma Moving Averages are joined by the respective Fibonacci Retracements at 2937, just a mere 8% up from the recent low…nothing to crow about!

The High, Middle and Low Road Scenarios are shown below:

I note that my new found Taiwanese Friends are enjoying the blog this weekend and leading the Worldwide audience, and hopefully appreciating how to get to what matters in terms of knowing which way the wind is blowing here in the United States of America.  They know full well that with at least two black clouds over our heads from Greece and Spain, any whiff of Bad News will open the floodgates downwards and send the Nasdaq towards 2600 for a -17% drop from its high as we had in Flash Crash and Debt Crisis days:

Last week I gave you the Game Plan for AAPL, and so far it is behaving well and according to Plan.  This week we need to see it break up through the 50-dma and then head for at least a double-top at 644:

The count in Trading Days up and down tells you how treacherous this market has been the last month, but there seems to be signs of life to the upside these past 5 days with hopefully a follow through day to come:

At long last we see some signs of life in the movement to the right of the Stocks into the green buckets.

…And on that strong up day on last Thursday we have a healthy 134 Kahuna Force Stocks UP showing signs of life:

This week we see the 2x and 3x Bear ETFs losing ground with three in the red zone as shown on the bottom right:

Here’s another view showing the 2x and 3x Bears have lost ground.  We have another three weeks of breathing room before we see the next Jobs Report on July 5th.

…And that’s my Story for this Week!

Best Regards,

Ian

I am sure you remember the slogan back in the President Clinton era of “It’s the Economy Stupid”.  Sad to say we are back in the mire with a twist to “It’s Jobs, Jobs, Jobs, Stupid” and I will show you why the Stock Market is beating to that drum!

Slowly but surely the Bears have eaten away at the precious cushion we had by bursting through the twelve year barrier of 2900 on the Nasdaq and peaking at 3134 back on the week of March 26, 2012.  Seminar attendees will recall that was the last day of a fruitful learning experience where we developed a list of Leaders that would potentially give us an early warning of a peak in the market.  They are now believers as it happened that very week!  My friends Kevin and Robert from Qatar and Switzerland will know that from when they attended previous seminars that drove that point home…Well this Market has Nasal Catarrh from the drip-drip process:

The chart above speaks for itself as we can now see the drip-drip process we have endured each month at the beginning of the month when the US Jobs Report comes out, and that is the theme for this Blog.  With only the NDX hanging on by a thread we are now in an Intermediate Correction of -12% down from the highs of March.

The floodgates, Price-wise but not Volume as yet, opened wide on Friday with the miserable Jobs Report, and all signs point to a follow through on Monday with hopefully a fully oversold situation and then a Bounce Play.  At times like these, it pays to look at a Long Term Weekly Chart to see where long-term support might be:

We find that by using a Long Term Trend-line from the Low of March 2009 that support is at 2600, which is comparable to the drops in Flash Crash and Debt Crisis of ~-17%.  Heaven help us if we trot down to Black Swan proportions.   My motto is to never jump too far ahead…have three scenarios, never fall in love with one, and always let the Market tell you which one it is on.  However, one must evaluate the underlying clues for Fear and Greed so that one knows when to run for cover depending on your stomach, not mine.  They are different.

Let’s now look at the Underlying Clues to establish the theme we are Marching to…Jobs, Jobs, Jobs!

Pretty miserable.  There comes a time when the Market falls of its own weight, and although the Surrogate for the Market is AAPL, that slogan has now got a trifle stale, unless there is some miracle of GOOD and FRESH News to prop the entire market up, not just AAPL.  But for my friend Becky who is an avid AAPL follower and promised me her first million when she made her third which she is working on, here are the “Must Have’s”:

Now for those “Underlying Clues of Fear and Greed”, I will show you that the first week of the month is the most important and it is the day that the US Jobs Report comes out.  The next four charts demonstrate the underlying theme of the grip the Market is in with the Monthly Jobs Report.  You short term intra-day type 1’s might make a note of this winky-winky:

That’s a new chart where my good friend and Partner Ron Brown and I are joined at the hip with a Dash of Bollinger and Elder to lean on.  You oldies know that our whole concept is to measure Fear and Greed through Impulse Indicators.  The stronger the signal the more the meaning.  Well, with my good friend Chris White of EdgeRater fame, I have the tools to measure the extent of Fear and Greed through using the Kahuna Force Indicator which Ron and I have developed.  What we see on the chart above is Kahuna Force Up signals in Green and conversely KF Down signals in Red plotted against the S&P 1500.

The readings are daily KF Up and Down, respectively, and it doesn’t take one two minutes to see the most recent big “down counts” were on Jobs Report Days!   A reading of -300 (say) means that 20% of the S&P 1500 had a major down day.  This past Friday was ugly.  Compare the readings now to Flash Crash and Debt Crisis and you can see that until we see similar signals to the upside indicating strength, we will wallow around in the mire.

Here is an oldie you haven’t seen for sometime.  It shows the same situation:

Now here is a new idea and picture.  It uses the 2x and 3x BEAR ETFs to show how things have changed between the intervals of the Monthly Jobs Reports.  Since this is a chart for the BEAR ETFs the colors are topsy-turvy.  When the colors are Red, the BULLS are in control and when they are Green the Bears have it.  Don’t worry about the numbers…it is the impression you get with the colors that make the point.  We have gone from Bulls in Control to Bears in Full Control:

A picture of the 2x and 3x BULL ETFs produces the reverse picture and both should be watched for the quickest clue that change is in the wind.  Now for those who are numbers oriented, here is a closer view of the last two Jobs reports and this picture gives one a further clue.  Once the BEAR ETFs are essentially all above the Upper Bollinger Band, it takes 3 to 5 days for the euphoria to wear off to the downside, so watch for this affect this time around.  The symbols for the ETFs I used are shown at the top of this next chart:

Please note that we now have 31% of the S&P 1500 Stocks in %B Bucket <0 and we are Oversold to say the least:

The rest is up to you depending on your stomach:  Foxhole, Short, Dabble, but wait for the QUALITY of the Bounce if you are already out, using these concepts to stay on the right side of the Market.  Don’t forget we need Eurekas and Kahunas to the upside.  No excuse now after my last blog note of a Glossary of Terms used.

I haven’t heard from Akiva in Israel of late, but I am sure he is lurking in the wings.  Many thanks to all the US Followers who gave me words of encouragement who appreciate this “Good Stuff”, which I write while watching Tiger try to find his old winning form.

Best Regards,

Ian.