Has The Market Topped Out?

The market has a very subtle way for signaling a change in its major trend direction. Sometimes it will set off the alarm using the Dow Theory and other times it will set off divergence amongst the market indices.

Recently, the latter was the method the market has decided to use for signaling it has reached an intermediate top and it is preparing to change direction. Here is a chart showing how the divergence occurred, notice the new 52 week closing high for the DJIA, SP500, Nasdaq 100 and the Russell 2000 did not occur on the same date.



Furthermore, the SP500, Nasdaq 100 and Russell 2000 have peaked before the DJIA reach its peak on 9/20/2012. This indicates the DJIA made a new non-confirmed 52 week closing high on 9/20/2012.

The Nasdaq advance/decline line and the daily net new high-new low indicator have also peaked on 9/14/201, days before the Nasdaq 100 index closed with a new 52 week high on 9/19/2012. By not having the market breadth indicators to confirm the new closing high is a sign an internal top has been made. Here is the chart of the Nasdaq 100 and its breadth indicators:



Similarly for the DJIA, the New York Stock Exchange advance/decline line and the daily net new high-new low indicator peaked on 9/14/2012 and the DJIA made another new 52 week closing high on 9/20/2012.



Notice how small the difference between the 9/14/2012 closing high and the 9/20/2012 closing high, it is only 3.56 points (13593.37 vs 13596.93)..subtle!

Although the market gave off various divergence and non-confirmation signals, it does not necessary mean an immediate beginning of a new bear market or a big sell off. But it does signal a major correction could be in the offing, and one should be very cautious on initiating new long positions and be very defensive on existing long positions. After the market has reached an internal top, a sudden change in direction can happen when it is least expected. Therefore, trade cautiously and defensively until the market establishes a new trend.

Is The Dow Theory Sending A Sell Signal

With lot of talk about possible sell signal for the market due to the non-confirmation between the DJT and DJI recent price level. The Dow Theory is based on the premises that as long as the DJT makes a new high along with the DJI, then the present trend will continue. But if the DJI makes a new high while the DJT does not, then this divergence between the DJI and DJT signal a possible market top.

Recently, the DJI made a new 52 week high while the DJT didn't even get above the previous peak which is below it last high.

In this video, I explain how to use the Dow Theory along with other market indices to detect a possible market top.



If you do not see a video player on your screen, click on the title for this post and it will take you to the blog page where you can view the video.

2 Consecutive Eventful Day

After today's AAPL Iphone 5 announcement, another big day for tomorrow. The Market is expecting QE3 from the Fed tomorrow. Will the Market be right, and will it sell off on the news? Check out the video for possible clues.

Here is the video on the financial.





And this video on AAPL and FB.




Click here if you do not see a video player on your screen.

Disclosure: long FB

Is It Time For FB To Move Up?

Here is a video on FB, and some of the upside possibilities.



Click here if you do not see a video player on your screen to view the video.

Disclosure: long FB

Video Posted During The Weekend of 9/8/2012

Here are a few video posted during this weekend on the market and some stocks to watch.

If you do not see a video player on your screen, click here to watch the video.

Some stocks to watch IBM GLD SLV GS MS JPM ANF CHRW R



AAPL and the market continue to moving higher. SPX NDX DJI RUT



Video update price targets analysis for JNPR



CMG shorts being squeezed?



Some price targets for BAC and GS

BAC & GS - 9/7/12

Here are some price targets for BAC & GS. Watch the video for details.

Market Hit New High

Here is a video review of the market hitting new 52 weeks high



and another video reviewing AAPL and other stocks.

Market Consolidation Continues

The market continues to consolidate while AAPL is pulling back from its new all time high above 680. Watch the video for market review and AAPL price action review.



Click on the title if you do not see the video player on your screen.

A Web 2.0 IPO Breakout?

Here is a Web 2.0 stock that could have the potential of breaking out to the upside, Zillow (Z). Check out the video.

Price Levels To Watch On AAPL

Here are some price levels to watch for the next week on AAPL. Video posted.




If you do not see the video player on the screen, click the title and it will take you to the blog page to view the video.

Natural Gas & Coal

After a prolong downtrend, the natural resources sector appears to have bottomed. Here is a look at some natural gas and coal stocks.

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Market Show Sign Of Pull Back

The market is showing sign this uptrend is due for a rest. The SP500 and Nasdaq 100 printed a bearish outside day (engulfing candle). In addition, AAPL IBM GS and many other stocks are showing exhaustion to the upside. But, gold and silver are breaking out.

Here are the video highlighting today's price actions and the possible support levels.

Click on the title to view the video if you do not see a video player on your screen.

Market Review & Outlook - 8/20/2012

Here is a video reviewing the indices and some of the market moving stocks: AAPL GOOG AMZN IBM GS MS JPM MU NVDA SNDK GLD SLV

AAPL Breakout

AAPL finally broken out and took out the previous all time high. Looking at the head & shoulder or the cup & handler price pattern, the measure move is pointing toward 700+ level. Watch the video for more details.

Caution Flag For The Market

So far for the month of August, the market has been trending higher and getting near the 52 week high made in April of this year. But, the market is putting up a caution flag as it attempts to make a new 52 week high.

Here is a chart of the SP500 showing the Advance/Decline line is confirming the upward trend as the index and the A/D line both trending higher. The caution sign for the SP500 is the lack of expansion on the number of new high as the market is getting close to the 52 week high. This uptrend could come to an end unless the number of new high starts to expand.



For the Nasdaq, the caution sign is more concerning. Not only the number of new high is not expanding as this index is approaching to breach the 52 week high, the A/D line is showing a negative divergence.




Until these technical cautions have been resolved, tighten up the stops and be patient on buying dips.

Mid-week Update : 8/15/2012

Video Posted.

Stocks On The Move Video

Here are couple video highlighting some of the stocks and ETF on the move.

Market Continues To Move Higher

As the US economy continues to limp along with the backdrop of unresolved Euro zone financial meltdown, and a slower growth China, the market continue to move toward a possible new 52 week high.

The SP500 has been chopping higher and now it has reached the 1406 resistance level. The rising 20 EMA, 50 & 200 SMA, and a higher MACD are providing technical strength to help push this index toward a potential new 52 week high.



The Nasdaq 100 is also coming up to test the 2750 resistance level. Having a rising 20 EMA, 50 & 200 SMA, and strong rising MACD, it appears it will likely break the 2750 resistance and move toward a potential new 52 week high above the 2795 level.



The DJI is only less than 160 points from a new 52 week high.



The Russell 2000 is the only laggard amongst these major market indices. But if it breaks above 810, then it could be completing and breaking out an inverted head & shoulder, and this could potentially lead to a much higher level than the 52 week high near 848.



Even though the market has been moving higher, there is still a high degree of skepticism on the recent market rally. But the technical picture is clearly indicating the market want to head higher.

Market Movers To Watch

Here is a video reviewing AAPL, GOOG, AMZN, IBM and PCLN price action.

Market Recap - 8/4/2012

Here's a video recapping the market activities and what to expect for the coming week.