Back on February 8th I wrote about the negative divergence I noticed in one of my favorite indicators - the percent of stocks above their 50-day moving averages. If the market is having a healthy advance you should see a lot of stocks participating. That inidcator should be making higher highs along with the indices. The divergence in that indicator is a sign of a rally on poor breadth.
That divergence has been nagging at me since January but I've felt like I had to be a bull given the indices' stubborn advance. Well today it felt like the music stopped in a game of Musical Chairs and people were scrambling to sell. I thought last week's Fed decision to raise interest rates might have been the catalyst for a selloff but that didn't happen (and perhaps that was too obvious). Thankfully my nervousness had me keeping tight stops and I shorted some QQQ ahead of the Fed meeting. I was actually thinking about covering that short after this morning's gap up -- good thing I didn't!
I thought I'd follow up on that previous blog post by showing again how one can get a read on the market's health via some of the site's features. As I've mentioned, it's crucial to get a feel for the broad market's health & direction. I'm often asked which scan/signal is the best one -- but there's no one anser to that. Different things will work in different phases of the market. (I wrote a bit more on that topic in the FAQ) So I've put things on the site to help me do just that.Read More ➞
I've been noticing this while reviewing the Genreal Market Overview page for several days now and wanted to highlight it. I've written several times about how I use the "Percent of Stocks Above their 50-Day Moving Averages" (similar to Worden's T2108 indicator) as an overbought / oversold indicator. And I like it much better to signal oversold than overbought.Read More ➞
I created this site to help me manage and speed up my nightly stock research. Here I'll share how I'm currently using the site as a way to help others see how everything here ties together. My process consists of a few general categories:
- Analyzing the broad market
- Finding new trading candidates
- Managing positions that I currently hold
- Managing / monitoring my watchlist