Ian Woodward's Investing Blog

Yes, you guessed it, Uncle Ben did it again and the Bears are wondering what hit them.  Their turn will come sooner or later but for now we are back to New Highs and flying high:

We have now had several different occasions where Big Knee Jerks are followed immediately by huge recoveries in the Market Indexes but where Volume by and large has been relatively sluggish while the Indexes trot up to New Highs:

This next chart is an Eye Opener with explosive moves in all Market Indexes to the upside yesterday.  There are now seven Indexes in Overbought territory, and following through again today but as one would expect not quite the same enthusiasm:

Grandma’s Pies are back to being healthy with ~ 2:1 in Favor of the Bulls:

It is difficult to stay calm when we have these earth shattering days with big yo-yos in the Market Indexes, but it seems of late that when the %B Net Score is no worse the -5 it pays to wait for the next day before acting.  However, this is probably a situation of the times we live in where any bit of news around the world can cause the markets to go into a tail spin or reach for the stars almost on a day to day basis:

Uncle Ben used his magic wand again and drove the Market back up to Overbought in three days flat…we now show three Fakeys, all within the span of 3&1/2 months which leaves the Bears in a quandary…but one of these days their turn will come:

Naturally, with all this turmoil from day to day the Acc/Dist Ratio wobbles all over the place, but at present it shows bullish favor:

It goes without saying that the DJIA is riding highest of all the Market Indexes.  We can see from the following chart that it has now surpassed the Highest Jump Targets and that five more are only <1.5% of doing the same.

Of course, all good things eventually come to an end and few would disagree that we need some form of decent correction before one should reasonably expect to continue with a rally that is now all of four years old with corrections no worse than ~17% along the way.  Whether we shall see a Bear Market Correction of >20% is in the lap of the gods, but note that the Doom and Gloomsters are  out in full force touting the worst is yet to come.  I have added the line for a Bear Market Correction of -20% on the S&P 500 which is 1278 so we will make that a stake in the ground once the correction is underway.

Play close to your vest, and enjoy the move up while you can.

Best Regards,

Ian.

As expected the poor Jobs Report on Friday took the Market down big time at the open, but there was a respectable Bounce Play from the lows.  However, it was not nearly enough to stem the tide and with the S&P 1500 losing another 2.5 Buckets to the downside on top of the 5.4 Buckets two days previously, the Bulls are hanging on with their finger nails.  This next week will tell:

The knee jerk on Friday is obvious from the next Chart of the Market Indexes:

The Russell 2000 (RUT) has given up around 3% from its high and has shown its teeth with a drop of %B x BW to below Zero:

The turbulence is evident from our next chart of the damage done to the S&P 1500 these past three days:

I have picked up on a view which I introduced to you in my last Blog Note and hope you will use this to stay on top of the right side of the Market and to understand the shifting winds as we go into the next week using the HGSI software.  There is a lot on information at a glance with this view using the Major Market Indexes with the T1 view in Warehouse:

1.  We had 5 Indexes take a > -0.24 Hit on Friday, with the NASDAQ 100 going down over 4.25 buckets.

2.  We have two indexes, the NASDAQ and NDX, both below the lower Bollinger Band

3.  They ran for cover in the Transports and Utilities on Friday

Now for a look at the top two canaries, one gasping and the other healthy…AAPL and GOOG, respectively:

AAPL’s performance has been worse than dismal and is down about 40% from its high.  Maybe it is finding its bottom, but sad to say with this recent performance it has given up its leadership to GOOG.  However, you must still follow it as its weight on the NASDAQ and NDX Indexes is so out of proportion compared to the rest of the stocks that its movement will influence these Indexes both ways:

Now, let’s look at GOOG which is behaving substantially better, with the Canary still sitting up and chirping…it is the leader now:

We shall see if the Floodgates open wide next week or the Bulls come charging back to produce another Fakey!!

Best Regards,

Ian

Yes, this was a Major Shot Across the Bow as the Market Indexes dropped down for most of the day.  Net-net the Bears had control today, and we shall see if they can continue to take the Market down:

This next Chart shows the damage done today in the Major Market Indexes:

Most of the Indexes suffered greater than 4 Buckets to the Downside, and the RUT was one of them:

…and here is the picture for the LOW of the day with the RUT.  Richard B. from Thailand taught me back in November to keep a beady eye for the %B x BW to fall below “Zero”, so both these charts are a tip of my hat to him, as they don’t get below this level more than twice in any one year.

It’s now time to pay attention to the downside targets from the Highs.  I’m sure you know by now the natural targets are -4% and then -8%, so here are the Measuring Rods using the Nasdaq:

Here is the picture in a nutshell of the damage done today as portrayed by the HGSI Software:

This picture of Grandma’s Pies clinches the story for you with a 2:1 ratio to the downside:

That 5.4 Buckets down on the S&P 1500 says it all, and now we have to wait and see if the Bears can really take control and take this Market into a full correction, or whether this was only a flea bite:

It goes without saying that the road to the Highest Jump Targets were hit hard today and as a result we have only the DJIA Above the Higher Jump Target, whereas there were seven just a couple of days ago:

Please remember that the Jobs Report comes out on Friday and we shall see where this Market goes.

Best Regards,

Ian

Thank you for your patience as I took a well deserved “Pause to Refresh” after an invigorating 3-Day Seminar last weekend.  I will give you a couple of bonus snapshots to enjoy of the Leaders Index we always develop at such events.

It’s unfortunate that the Market Indexes are still showing the “Wibbly Wobbly” phenomenon of a few weeks ago, but not to the same degree.  Of late it has been a one day up and the next day down affair with no serious spikes down.  To say that this Rally is long in the tooth is hardly an exageration, but hopefully we will eke out a couple of weeks more to the upside to achieve the Highest Jump Targets for the Market Indexes, except for the laggards…the Nasdaq & NDX:

The Market Sectors are still holding up, with a very recent perceptible shift to Defensive Sectors as shown on the next chart.  Materials have been totally trashed, but Telecom Services which was the laggard has shown signs of life especially with VZ and T showing progress:

The Nasdaq has shown signs of new life as it has poked its head out of a tight 14 Day Base, but there is no conviction with volume remaining very placid.  If this is to be the last hoorah for the Market we need a burst of enthusiasm by the Bulls in the form of a Kahuna as hopefully in the next two weeks the Leading Market Indexes reach their Highest Jump Targets which on Average is only 2.24% away discounting the NASDAQ and the NDX.  However, for there to be irrational exuberance we now need to see the likes of AAPL and GOOG burst upwards with some sparkle.  More on this when we review the Spreadsheet of the Higher and Highest Jump Targets, a few charts down:

The Russell 2000 essentially took a breather this past week which was a result of the Cyprus Banking kerfuffle, but hopefully will plough through to New Highs this week, to catch up to the lead by the Mid Cap S&P 400:

Hopefully the minor back and forth last week has been resolved with Friday’s action, but unfortunately any little bit of disturbing news, especially out of Europe can set this Market into a tailspin.  Barring that, I sense the Market still wants to go up, in which case a strong move can lead to a climax run and hopefully achieve the Highest Jump Targets.  Please note the tiny red arrow I show at the bottom right of the next chart, which cautions us that the Bandwidth of the S&P 1500 is once again in a tight squeeze at a reading of 0.03, which invariably implies that a Correction is not far behind:

Please note that the %B of the S&P 1500 is at 0.87 (87%), while the %B of Stocks >0.05 is 69%…this invariably implies that the Buckets can still improve to the Upside being pulled up by the sudden burst of enthusiasm in the Index itself.  If that does not occur, we can again expect that %B will fall back.  Please also understand that with a reading of 0.87, %B would jump into overbought territory if we were to get a Kahuna to the upside which is unusual at this level.  In which case “Overbought” on either the %B and/or %B >0.5 would signal the rally days are numbered, especially at this late stage:

The %B Net Score stays healthy at 6, and as I caution you the time to worry is when this trots down to 4 as the early warning sign that the internals are giving up the ghost and we can expect a Correction or another Fakey!

Folks, we spent a good deal of time understanding Fear and especially Greed at the Seminar, and I hope you now realize that this High Jump mumbo jumbo (good stuff), will keep you on the sunny side of the street.  The Spreadsheet you have come to know and love shows that 7 out of the 9 Market Indexes are now past the Higher Jump Target, and if we IGNORE the Nasdaq and NDX, the rest of the Indexes are but 2.24% away from their Highest Targets.  As I mention on the bottom of the chart it has taken us 8 weeks to achieve ~14% up since 01/25/2013, so with any luck the Targets can be reached within the next two weeks.  Notice that the S&P 400 and the DJI are leading the charge by looking down column N20 to N28.  The only thing preventing this is a SURPRISE negative piece of News…we shall see.  I have to make that Caveat since that is the world of investing these days which is all News Driven.  But let me tell you that in all the years we have given seminars, we have never witnessed so many tight Lower Left to Upper Right Charts (LLUR) in our life!  Ultimately they die through profit taking, but for now this is a very healthy market:

Here are the couple of bonus snapshots to enjoy of the Leaders Index we always develop at the Seminar, which will give you insight of what we learned at the Seminar as mentioned above:

Well, that’s it for today…I hope all of this is of value to you and helps to see through the fog!

Best Regards,

Ian.

Wonders Never Cease…We are now into New High Territory after the spate of Wibbly Wobbly which is forgotten and behind us.  We are at an interesting stage where we are but 1% away for all but the Nasdaq and NDX Market Indexes from the “Higher Jump Targets” I set seven weeks ago, so it is Up, Up and Away again:

The DJI and NYA are flying high and have set New High Records above the Higher Jump Targets set over seven weeks ago:

The Russell 2000 (RUT) has bounced back nicely and is into New High Territory with a 4% cushion to support so all is hunky dorry for now.  Another 10 points higher and we would have met the Higher Jump Target of 951.

Now here is a bonus for Longer Term Investors that shows what to look for with regard to buying and selling:

The Lesson learned is to always watch the High Jump for signs of when the Markets and Stocks are overbought.  We are now nearly into a four month rally and in another week we will be celebrating the Ides of March!  The beauty of the current situation is that we have ample cushion and early warning before catastrophe sets in:

Grandma’s Pies are not soggy any longer and looking very healthy once again:

…And now, I finish with the real Gem on your gateway to the stars as you review the progress against the targets I set for the Market Indexes to reach the Higher Jump Targets way back on 01/25/2013.  The top half is where to look and concentrate on Columns “L” and “N”.  Always take things a step at a time.  Let the Indexes get past the Higher Jump Targets (if they do) before worrying about the Highest Jump.  Note however that only the Nasdaq and NDX are lagging while all the others are either above the target (DJI and NYA) or no more than 1% below, which is reachable if the rally continues.

My thanks to all my supporters around the world, who pop in to see what the latest news is and for some of you who have even taken the HGSI Product to follow along and more than that have come across the pond to attend a seminar.  The next one is in two weeks time so hurry and sign up.  Ron and I  have raised the bar one more time.

Best Regards,

Ian