Market Timing and Stock Trading Strategy for the week of 1/29/2018
Topics in this weeks edition:
- Stock Market activity in review
- Weekly Market remains strong
- Daily Market remains strong
- Suggested market posture for next weeks trading & 100 best stocks
1) Stock Market activity in review
This Market is not providing many pullbacks for investors to get in the game.
It seems every time there is a pullback or even a “flat” day, the bulls rush in an take advantage of perceived “bargains”.
This is exactly the action that took place this week.
Monday’s market was up, Tuesday, Wednesday, and Thursday’s market was flat.
Friday trading pushed the headline indexes to new highs – again.
But lets’ not get carried away.
By many measures the market is overbought – but there are many buyers including institutional buyers that are not yet invested as much as they want to be.
So as long as the supply/demand balance is heavier on the demand side I’ll be looking for stocks to buy.
But not just any stocks.
- Look for profitable buy points as explained in the how to buy stocks strategy.
- Only buy stocks suggested on the best stocks watchlist.
While looking for stocks watch the Market Timing Indicator for signs of weakness. Any weakness will show on the daily time-frame first.
Here is the current analysis of market strength on the weekly and daily time-frames.
2) Weekly Market remains strong
Contrary to media stories of an impending meltdown in stock prices, I just don’t see it – yet.
Take a look at the weekly chart.
I don’t recall a weekly chart that looks technically stronger than it is now.
- The OBV is strong
- Upward price momentum is strong
- Price action is strong
Further, moves outside the Bollinger bands usually indicate future moves in the same direction.
And, we are about halfway through earnings season and broadly speaking, earnings have been improving.
How about the strength on the daily basis?
3) Daily Market remains strong
Index action on the daily time-frame shows as much strength as the weekly.
The potential weakness that I mentioned in the alert post early in the week has been completely erased by this week’s market action.
But let’s not get complacent.
At some time in the future – who knows when, I certainly don’t – this market will reverse.
At that time I’ll look to go short with mostly contra ETF’s.
Until that time occurs enjoy the rally but keep tabs on the market timing indicator and this site for the early warning signals. Visit here to receive stock market alerts when they happen.
4) Suggested market posture for next weeks trading & stocks to watch
In last weeks update I stated:
I think this week will be a time period to sit back and watch the action.
I even sent out a special alert reviewing potential weakness showing in the charts.
But all that was reversed by midweek.
I started reviewing the best stocks watchlist for purchases at profitable buy points as explained in the profitable investing strategies.
But with the exception of (Primerica) PRI on Monday, I didn’t find many. I much prefer to wait until profitable entry points present themselves instead of chasing stocks upward with the crowd.
However, during the week I sold several positions that had good earnings announcements but were pushed down below my sell price by profit-taking.
You can get the details the profitable investing portfolio link.
This weeks strategy will be to continue to review the best stocks list for stocks exhibiting above-average profit potential.
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