Daily Market Snapshot
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| There is now a stand-off stalemate between the bulls and the bears |
Market Direction Model
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| Yesterday's upside action was strong enough to paint our impulse indicator line mostly blue. We refer to these as Kahunas, a bullish sign. |
NASDAQ Chart View
With yesterday's big up day, the bulls and bears are now on roughly equal footing, a stalemate situation, so to speak. The victor of this skirmish will serve as our sign post, whether it will be a continuation of the trend higher or a further move to the downside.
You can see from the above chart of the NASDAQ that our blue and red impulse indicators, at the bottom of the chart, provide useful insight as to the likely direction of the market going forward, blue bullish and red bearish. You can see that the occurance of blue Kahunas in the past has been a reliable indication that the market's least path of resistance was to the upside. The occurance of a red Kahuna is just the opposite.
The left side component of our Market Direction Model provides red and blue impulse indicators for the nine major US Markets. This part of the MDM acts as an early warning system giving us a heads-up, alerting us about potential reversals in the market.
In the last week or so we have had alternating red and blue Kahunas (impulse indicators). This represents confusion on the part of investors and has resulted in a big slide in investor sentiment and a substanial increase in volatility.
This is all exacerbated by the fact that Apple now is owned by nearly all mutual funds, hedge fund managers and individual investors. Additionally, the money flows in and out of Apple exceed that of any other security. Consequently, Apple exerts an inordinate amount of influence on the markets and the NASDAQ in particular; hence, so goes Apple - so goes the market. Apple reports earnings on April 24th. I am sure their earning will be terrific; it will be their guidance that will be highly anticipated. Comments from the management will be finely parced and could potentially have a great impact on the market as a whole.
Until we get a clearer take on of the markets, my preference is to keep position sizes small and to limit losses when and if they occur. I would rather not try to be a hero and gamble when the market is in a stalemate situation. My preference is to wait for more clarity and have the wind at my back when investing. Overall account stability and capital preservation are among of the primary goals of the Golden Years and In-Betweener Model Portfolios.
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| Large moves represent institutional sponsorship and our impulse indicators (Kahunas) confirm the strength of the move. |
With yesterday's big up day, the bulls and bears are now on roughly equal footing, a stalemate situation, so to speak. The victor of this skirmish will serve as our sign post, whether it will be a continuation of the trend higher or a further move to the downside.
You can see from the above chart of the NASDAQ that our blue and red impulse indicators, at the bottom of the chart, provide useful insight as to the likely direction of the market going forward, blue bullish and red bearish. You can see that the occurance of blue Kahunas in the past has been a reliable indication that the market's least path of resistance was to the upside. The occurance of a red Kahuna is just the opposite.
The left side component of our Market Direction Model provides red and blue impulse indicators for the nine major US Markets. This part of the MDM acts as an early warning system giving us a heads-up, alerting us about potential reversals in the market.
In the last week or so we have had alternating red and blue Kahunas (impulse indicators). This represents confusion on the part of investors and has resulted in a big slide in investor sentiment and a substanial increase in volatility.
This is all exacerbated by the fact that Apple now is owned by nearly all mutual funds, hedge fund managers and individual investors. Additionally, the money flows in and out of Apple exceed that of any other security. Consequently, Apple exerts an inordinate amount of influence on the markets and the NASDAQ in particular; hence, so goes Apple - so goes the market. Apple reports earnings on April 24th. I am sure their earning will be terrific; it will be their guidance that will be highly anticipated. Comments from the management will be finely parced and could potentially have a great impact on the market as a whole.
Until we get a clearer take on of the markets, my preference is to keep position sizes small and to limit losses when and if they occur. I would rather not try to be a hero and gamble when the market is in a stalemate situation. My preference is to wait for more clarity and have the wind at my back when investing. Overall account stability and capital preservation are among of the primary goals of the Golden Years and In-Betweener Model Portfolios.
This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.
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