Ian Woodward's Investing Blog

When the number of hits on my blog are less in the United States than the rest of the world I can tell that investors are taking vacations and given up on this market until there is some exciting news one way or another to wake them up.  I say be patient as you have only ten more days to wait for fresh NEWS to jolt this market one way or another:

Still, my friends in Singapore, United Kingdom, Switzerland and Canada top the list from abroad this morning, so here is a mid week assessment of where we stand:

Here is an updated picture for the last week on %B for the S&P 1500 which shows that we are dwadling around waiting for news from Draghi, Jackson Hole and the Jobs Report:

…And here is the picture for the Accumulation and Distribution statistics, which shows more of the same:

So there you have it…can’t make a silk purse out of a sow’s ear as the saying goes, but an update is always worthwhile.

Best Regards,

Ian.

It’s Thursday afternoon, the Markets are closed and there was a mild shot across the bow, so I see my followers in Australia, Canada, Belgium and Egypt to name a few along with the US Contingent who signed in today are looking for more fodder.

So here we have the latest pulse of the Market hot off the press:

If you use Think or Swim (TOS), make yourself a Template for the ten 3x and 2x Bears I use to keep me a step ahead of the game and the whole world will be your oyster.  Note that on a three month chart you will see the recent Highs back in June and they all bottomed on 8/21/2012 and have started to head up.  It’s too early to call, but at least be aware that the sell off in the Market Indexes these last couple of days and especially today have given some hope to the Bears that we have put in a Double Top.  For those of you who are NIMBLE Type 1 or 2 Traders and can sit and watch your computer all day you know how to play the game, but for those who are Type 3 & 4 Longer Term Traders and Investors this tells us when the wind is at your back or in your face.  Just look at the Whallop the Bears theoretically had in these past three months playing this game.  However, when the numbers get so high, the Bears are just itching to nibble and that is precisely what they have started to do in the hope that they have caught the bottom.  Not for the feint of heart, but these give you a feel for the way the windsock is blowing to understand fear and greed and stay on the right side of the Market:

Now let’s look at the action of these ten in Real Time today with two snapshots in time, one at 11.00am PCT and the next at the close.  All these ten bears were positive and had a respectable day.  The Tables are in Rank order, so the two charts are not aligned…anyway you get the idea:

So now we are closing in on “Crunch Time”, with the Jobs Report only two weeks away.  The buzz in this neck of the woods is that Helicopter Ben is ready to drop leaflets again if need be, but I am sure the FED will wait to see if the report is good or dismal:

I hope you enjoyed this update hot off the press.

Best Regards,

Ian

We were spoiled with two solid weeks of the London Olympics, while the stock market has been slowly but surely inching up to the point that Double Tops are now in sight:

We now have all eight market Indexes in a tight channel, with even the Small Caps showing a burst of speed:

…And here are the High, Middle and Low Road Scenarios for the Nasdaq.  There is strong support at 2875 so if there is any untoward problem and the markets trundle down, that area should provide the stability, and if not run for the hills:

I haven’t used this chart for sometime, but there is a tremendous amount of information relating to Fear and Greed and I will always be indebted to my good friend Pat Turner for her thinking in depicting the ebb and flow of the Market, and in this case the S&P 1500.  Given that we have 12 years of history for this particular view, the colors of light, medium and dark green or rose represent 1, 2, and 3 standard deviations from the average.  In addition she painted the two extreme buckets with Pink to emphasize when the markets are either oversold or overbought.  I have been able to milk this view further by noting the statistics for the peaks and troughs. I am sure some of you remember that once a Peak is reached and expecially one as significant as 37% in Bucket >1.0 on 07/12/2012, it pays to start a count of “Twelve drummers drumming” and invariably within 12 to 15 Days the market will have drifted into a correction.  You can take that Rule of Thumb to the Bank!

Here is another one of Pat Turner’s Priceless Charts, which opened up a whole new vista for my work on which I continue to build.  As a result, I have recently been recognized for my work by the Market Technicians Association (MTA) in their August Newsletter.  I am indebted to Chris Wilson, who is a member of this group and a strong supporter of HGSI, and who won an auction and gave me the opportunity to have a luncheon with John Bollinger all of 5 Years ago. My sincere thanks to Michael Carr for spending countless hours developing the story of my contribution to you.  Through Chris’ generosity I have built a friendship with John who pays me the tribute of revitalizing his work with several new BB Indicators.  What goes around, comes around.

At times like these when there is a noticeable shift in the Market from Bearish to Bullish, I find that one of the clues is to examine the Bollinger Bands %B and Bandwidth using a composite Index of 2x and 3x Bear ETFs.  It stands to reason those who use these instruments are quick on the trigger to either pounce in with both feet or run for the hills when they smell trouble as is apparent in the following chart.  That should give us a clue as to which way the wind is blowing:

Now let’s turn our attention to the Accumulation and Distribution of the over 6620 stocks in the Database with a price over $5.  As I will show in the next three charts that Ratio of those stocks under Accumulation to Distribution is not as strong as we would like.  I have set another Rule of Thumb for you in that the ratio should be 3:1 or better.  Judge for yourself:

…And here is how you can get the same result using the Pie Chart Tool in HGSI:

Here are some more Internals of the Market with the % of Stocks for the Nasdaq above the 200-dma:

…And here is a chart of the McClellan  Osc. and Summation Index which shows we have a reprieve:

Finally, make sure to have a copy of this chart by your side in two plus weeks time, as we will be staring at the Jobs Report and you know how that goes when it is good or bad.  I have done my usual trick of taking a snippet from the past to show what would seem to be reasonable for the next three months:

Thanks to all of you who give me feedback and encouragement in putting these Blog Notes out…it does wonders to keep me going as I am sure you can see the work that goes into one of these.  Thanks also to the worldwide audience which is growing all over the world…let’s hear from you in the comments section at the bottom of this note.

Best Regards,

Ian

I’m busy writing the Newsletter for August which will be out tomorrow, and I thought you would like a preview of the Overview:

Overview:

 This Month’s Picture suggests that the Bulls are enjoying a little breeze to the upside despite the Market Indexes see-sawing every five days or so, on the Middle Road Scenario.  The respectable Jobs Report which met expectations kept the Markets up, though the RUT and S&P 600 Small Cap Stocks are lagging with Death Crosses looming. The ordinary investor has toddled off into the sunset to enjoy Graduations, Weddings and Vacations as overall volume has been dismal.  Hence the Low Volume has played right into the hands of the HFTs and they are having fun at our expense.

Besides discussing the High and Low Road Scenarios, my theme for this month is to respond to a set of stocks selected by a supporter to show points of view as to stock selection and timing entry.  Ron has focused on how we can combine multiple indicators to screen for stocks, ETFs or indexes.  These indicators include the Bongo Daily and Weekly, the DI+/DI- and ADX directional movement indicators, and the Force Indexes. The Round Table discussion is on Thursday, 16^thAugust at 4.30pm EST, where we will as usual expand on the ideas in the newsletter.

We look forward to seeing our faithful supporters at the Seminar on October 27 to 29 at the Palos Verdes Library and as always we will have fresh material to cover as we again raise the bar.  The Block Rate at the Courtyard Marriott has been raised $10 by them to $89/night, plus the usual Tax which in essence takes us to around $100/night.  Details are in the Newsletter.

Best Regards,

Ian.