A Trading Veteran's Market Perspective

A Trading Veteran's Market Perspective

We finally got the "required" breaks in Amazon (AMZN) and Netflix (NFLX), not to mention the Tesla (TSLA) fantasy. Also of note are Disney (DIS) and General Electric (GE) - key members of the equity cult. The big buy back announcement from GE, that got the idiots all fired up, fizzled (back below the pre-announcement level) and the straight up, mindless pursuit of "momentum" in DIS, got the "attention" of the robots when it broke - not a healthy sign when one of the key components of "The Dow" gets slapped hard (this gets the attention of all the soccer moms and bartenders who recently "discovered" the stock market.)

The hype surrounding the 200-day moving average (MA) is another ominous signal. The 200-day MA is a time tested support when in a bull market. There will be anywhere from two to as many as four or five VERY QUICK tests of that support. However, what all these "newbies" don't understand, is the fact that each "test" drains more and more firepower behind the bull move. 

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Market Insights from a Seasoned Professional

Market Insights from a Seasoned Professional

"I noticed your reference to a couple of well-connected analysts (Stack and Goepfert) who have been correctly positioned for the market's up trend over the past year or more. The fact that they are starting to get "twitchy" with a few  warning signs of overall market weakness setting in, suggests their opinion deserves some attention. However, that is not to suggest a bear market lies just around the corner. Before that happens, some signs of increased selling pressure, beneath the "cover" of manipulated "strength" in the big cap indices (DJIA, SPX, etc.) should show up. Short term, there persists some "overbought" profiles that could accompany further dips before year end.

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