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February was a month to remember. The short-term correction (-10%) that loomed over the market finally arrived in the major averages.  After new highs in January, now there is weakness in the tape appearing more regularly.  Volatility has more than doubled based on the Volatility Index (VIX). There has been a clear loss of momentum in some technical indicators that are starting to appear. Sometimes in the past, a precursor to lower stock prices down the road.

Our U.S. equity timing model remains on its October 31st buy.  This is normally a condition where historically risk has been below average and returns above average.  So far, the correction has been contained. With the latest decline, the short term is oversold from where potential rallies do develop.   However, the intermediate term charts are the opposite, they are overbought, suggesting the likelihood the market could have some difficulty having a substantial rise.

Keep a close eye on the movement in the Russell 2000 Index (IWM), a good measure for the broad market.

Figure: The iShares Russell 2000 Index (IWM) Weekly Price Channel and Upside Objective, and 19-26-9 Week MACD

The iShares Russell 2000 Index ETF (IWM) is made up of companies with a market capitalization of between $300 million and $2 billion.  The Russell 2000 (IWM) portfolio top sector holdings as of 02/21/18, is Financials 17.71%, Technology 16.61%, Health Care 15.13%, Industrials 14.58% and Consumer Cyclicals 12.23.  (Side note): Weekly MACD of Financials (XLF) has just given a fresh sell which is the top sector of the Russell 2000 Index

The top portion of the chart shows the weekly Russell 2000 Index (IWM) peaking at 160.62 on 1/24/18, failing to reach the equidistant channel objective (orange line) at 164.00 (purple circle). The IWM then turned down penetrating the uptrend (green line) that began in February 2016. This was the second time the uptrend was slightly violated, also in August 2017 (pink circles).  After penetrating the uptrend line, both times the IWM reversed higher.  This time could be a different story compared to the August 2017 rise when the IWM was moving sideways, much quieter, and the trading range was only about 1/2% a day.  In this market climate, there is more volatility, intraday swings are between 1 and 2 %.

The lower portion of the chart is MACD, a technical indicator that measures momentum.   MACD is in an overbought condition, momentum weakening, very close to generating a fresh sell signal.   MACD is also threatening to break a two-year-old uptrend that began in January 2016.  Risk is on the rise.

The SPDR S&P 500 (SPY) is also showing warning signs of a loss of momentum for the intermediate term.

Figure: S&P 500 SPDR ETF Weekly Price Channel and upside objective (SPY, top) and 12-26-9 MACD (bottom)

The chart above is the weekly SPDR S&P 500 (SPY) ETF and its weekly (intermediate) price channel (purple lines).   The S&P 500 (SPY) is made up of 500 stocks of the largest companies in the U.S. When you invest in the S&P 500 (SPY), you are getting a broad representation of large-cap U.S stocks with a moderate risk.

The S&P 500 (SPY) advance didn’t quite reach the upper channel objective at 308.00, peaking at 286.79.  During February’s sharp and quick decline, the two-year uptrend was slightly penetrated to the downside.  The SPY reversed sharply off its lows.   However, as of the writing the rally has stalled and a tight trading range between 268.00 and 275.00 has developed.   If the S&P closes below 268.00 the odds would increase a test of the lows is imminent.

MACD is in an overbought condition, very close to generating a sell signal along with breaking an uptrend from January 2016, over two years old.  For now, the benefit of the doubt goes to the bulls.  However, momentum is weakening. risk is on the rise, and caution is recommended

Summing Up:

The easy times are over.  A clear loss of momentum in the market averages has occurred in February.  Some technical damage did occur during the sharp decline in February.  Although the market averages have reversed off their lows, there is a good chance a test of the lows will occur over the next few weeks.  Intra-day volatility is on the rise which adds to risk.  For now, the bulls remain in control.   Even so, if you haven’t already you have a second chance to review your investment portfolio.   Be ready for the potential challenges that may be ahead, and be prepared for the potential opportunities that may arise in months to come.  If you need a second pair of eyes we are here to help you.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

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******Article published by Bonnie Gortler in Systems and Forecasts February 23, 2018

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

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January was a strong month for stocks. The Dow Industrials and the S&P 500 had their best January since the1990’s.  However, the indices have turned lower to end the month.  Investors appear to have stopped buying dips and have turned a bit more cautious. Investor optimism remains high, a contrary indicator.    Intra-day volatility has picked up. It looks like the days of half of one percent intraday ranges on the market indices now are a distant memory. I anticipate the daily trading ranges over the next several months to widen.

A short-term correction looms in the future.  There has been some short-term weakness in the tape, along with a loss of momentum in some technical indicators.  It was somewhat disturbing there were readings this week that showed a clear deterioration in the new 52-week highs and also an expansion of the new 52-week lows on the New York Stock Exchange Index.

On the contrary, a sign for the rally to resume would be for the opposite to take place: the new highs to expand and the new lows to contract to below 50.  The intermediate and long-term price trends on the major averages remain favorable.  Our U.S. equity timing model remains on its October 31st buy, a condition where historically risk has been below average and returns above average.

It’s too early to say the rally has come to an end.

Keep a Close Eye on the Russell 2000 (IWM)

What ETF to watch now for signs of a correction in the near term?  Answer: The Russell 2000

Figure: The iShares Russell 2000 Index (IWM) Weekly Price Channel, Upside Objective Channel, and 19-26-9 Week MACD

The iShares Russell 2000 Index ETF (IWM) is made up of companies with a market capitalization of between $300 million and $2 billion. The Russell 2000 (IWM) portfolio top sector holdings as of 01/30/18, is Financials 17.71%, Information Technology 16.77%, Health Care 16.16%, Industrials 15.22% and Consumer Discretionary 12.43%.  The top sectors in the IWM all started the year strong.

The top portion of the chart shows the weekly IWM made a new record high of 160.62 on 1/24/18.  The IWM has been in an uptrend (green line) since February 2016, with only one violation that lasted for three weeks in August 2017 (pink circle).  The IWM appears to have stalled, before completing its latest upper channel objective at 164.00 (purple circle), unlike the S&P 500 and the Nasdaq, which made higher objectives, not a good sign.  The IWM has been weaker than the other indices as of late.

Over the next several days, watch if the IWM stays above 151.00 keeping the uptrend intact. As of this writing the IWM is 156.69. In addition, if the IWM lags the S&P 500 (SPY), this would be another sign implying further weakness for the IWM that could potentially spill over to other sectors of the market in the near term.  On the other hand, it would be bullish if the Russell 2000 (IWM) index were to stop falling and take out the IWM high at 160.62, and penetrate 164.00 giving higher objectives.

The lower portion of the chart is MACD, a technical indicator that measures momentum. MACD peaked in January 2017, (left purple circle) confirming the price high.  The IWM stayed in a trading range as MACD moved lower until September when MACD turned up.  The rise in MACD has slowed since the initial thrust.  MACD has turned down, (right purple circle) forming a potential negative divergence from last January.  More strength in the IWM is needed in the near term for MACD to make a new momentum high.

Figure: The iShares Russell 2000 Index (IWM) Daily Price Channel, and 12-26-9 Week MACD

The top portion of the chart shows the Daily iShares Russell 2000 Index ETF (IWM).

The IWM has been in a daily uptrend since August 2017.   The short-term trend is in jeopardy to turn negative if the present decline continues. A close below 155.00 for two days will shift the daily trend from up to down suggesting caution near term.

In the lower portion of the chart MACD has given a fresh sell signal showing momentum is clearly weakening.  If the IWM continues to fall, the uptrend will also be broken, suggesting more selling is possible sooner rather than later.

Summing Up:

January has been a stellar month for the market.  In the past few trading sessions volatility has picked up and the tape action has become more unfavorable. Short and intermediate trend lines are intact for now.  However, further weakness would break the uptrends suggesting a short-term correction is possible.  I am watching very carefully the action in the Russell 2000 as it is one of the few indices that didn’t reach its upper channel objective and now has started to turn down.  Hold off on buying into the dip to see if the IWM remains above 155.00 on this pull back which would break the daily uptrend. A break below 151.00 on the IWM would violate the intermediate trend.   For now, continue to give the benefit of the doubt to the bulls. However, if the uptrends are violated more caution is recommended.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

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******Article published by Bonnie Gortler in Systems and Forecasts February 1, 2018

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

 

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The stock market has had an explosive start in January with the S&P 500 (SPY) and the Nasdaq 100 (QQQ) completing their upside objectives at 276.00 and 164.00 respectively. These are now levels of support if the market were to decline.

What to Watch Now For Direction?

SPDR S&P Financial Select SPDR ETF (XLF) Daily Price (Top), and MACD 19-26-9 (Bottom)

The top part of the chart shows the daily Financial Sector SPDR (XLF), an exchange traded-fund (ETF) that tracks a mix of diversified financial service firms, insurance, banks, capital markets, consumer finance and thrift companies. As of 01/217/18, the top holdings of XLF are Berkshire Hathaway B, (BRK.b) 11.50%, JP Morgan Chase & Co (JPM) 11.07%, Bank of America Corp (BAC) 8.61%, Wells Fargo & Co (WFC) 7.87%, and Citigroup Inc. (C), 5.79%. When financials are strong the S&P 500 (SPY) also tends to do well because the S&P 500 index has 14.85% of its holdings in the financial sector, second in weight only to the technology sector (at 23.96% as of 01/16/18).

Financial stocks made a low in September of 2017 and then stalled at the middle channel before breaking out in November 2017. The XLF then went sideways holding the middle channel.  In the start of 2018 the XLF has come to life, up 5.41% outperforming the S&P 500 (SPY), (as of 01/17/18), a bullish sign.  Historically, it’s a sign of a healthy market when financial stocks are strong; showing signs there is economic growth.  The daily upside target is 30.50, now only 3.6% away. Support is at 27.50.

The bottom half of the chart is MACD (12, 26, 9) a technical indicator that measures momentum.  MACD is rising, a positive sign. Keep an eye out for a potential break in the uptrend in MACD (green line).   An MACD turndown now would not favorable because MACD would fail to confirm the price high and instead would form a negative divergence.  This would be a warning the rally could be running out of steam.

The good news is the uptrend in MACD remains intact, and if the rise in MACD continues then MACD will confirm the XLF high.  A break above 30.50 on a closing basis would give higher upside targets to 33.50 coinciding with the weekly upside objective.  (See chart below).

SPDR S&P Financial Select SPDR ETF (XLF) Weekly Price (Top), and MACD 19-26-9 (Bottom)

The top part of the chart shows the weekly Financial Sector SPDR (XLF). The XLF has been in a steady intermediate uptrend since 2016.  The upside objective is 33.50, 13.9% higher from today’s close at 29.41.  Support is at 23.50.  MACD in the lower portion of the chart is still rising and its uptrend also remains in effect.  Therefore, the likelihood is for the XLF to continue to rise.

Just to Sum Up:

Stocks have started 2018 with a bang. Our U.S. equity timing model remains on its October 31st buy, a condition where historically risk has been below average and returns above average. The financial sector has been one of the leaders of the advance, which is a sign of a healthy market.  If the XLF closes above 30.50 then the next higher upside target would be 33.50.    As long as the XLF stays above 27.50 further gains in the financial sector are likely.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.


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*******Article published by Bonnie Gortler in Systems and Forecasts January 18, 2018

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

 

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Many have made wealth building one of their resolutions for the New Year, and for good reason, the stock market is in the midst of one of the best starts in history. There is certainly much excitement surrounding the stock market right now, and if you are invested you are probably also feeling good that you are making money due to the market moving to the upside. As any experienced investor knows, times like these can change quickly. Tell me, will you be ready if and when the market begins to fall or when the market feels like a roller coaster ride begins again? It may begin later than sooner but you’d be wise to start right now in planning with a watchful eye so you are prepared to take action when the ride becomes bumpy.

To be ahead of any change in the market you want to keep a level head. When challenging times arrive it’s important to your success to learn how to manage your emotions within the ebb and flow of investing. It’s only natural to become excited about the current state of the market but a wise investor knows that wealth and well-being go together. If you adopt this mindset throughout your wealth journey you will be more than ready for any adversity when challenging times occur. Staying calm with a spirit of balance can help you overcome any situation because you are approaching the ups and downs calmly and with a positive attitude instead of the feeling of anxiousness or overwhelmed by circumstances you have no control over. Keeping your emotional self together in a calm manner can make all the difference when seeking to make intelligent investment decisions.

Wouldn’t you like to feel great and to live a life without fear and anxiety? Emotions range from one end of the spectrum to the other and it’s quite easy to get lost in them if you aren’t aware of how yours impact your life. New Year’s resolutions are wonderful but taking care of mental and emotional health is important every day of the year. Building your wealth will require a systematic approach. What I’ve done within my own journey is to add a simple checklist in different areas of my life to help raise my awareness for what changes I need to make so that I continue improving when those anxious moments creep in. I’ve found just in the past few weeks that these moments have become shorter and shorter and the list has actually helped me increase my life balance and inner peace faster.

There are other steps you can take that will help you in gaining more inner peace you are seeking. You can also feel better by including daily rituals into your life. I have daily rituals I follow, such as journaling, working out, and listening to music.  So, how do you start?  Picture your ideal self, and then break down the steps needed to get from where you are now to that ideal person you picture. You want to stay realistic and create a plan that will help push through each step and through days of overwhelm without stress. Don’t make things more complicated than they need to be or you may find yourself not sticking with your plan. You want to approach each of your goals in a manner that will empower you.

When it comes to your wealth journey, you will want to view your finances in a way that doesn’t cause stress or anxiety and will allow you to map out a plan that works with your vision not against it. If you approach your plan in this manner you will place yourself in a position of strength and become able to make difficult decisions easier; which, in turn, will increase your ability to handle any change within the investment climate in a calm strategic manner thus moving even closer to your investment goals. This ideal may seem out of reach at times but stick with it. A well thought out investment plan along with good investment habits and a strong money mindset will be the tools you need in order to meet challenges without stress, frustration, and overwhelm. The feeling of more inner peace will be well worth all of your effort.

Nothing is beyond your reach when learning to shift your money mindset. First, learn to focus on what makes you feel good and help keep your spirits up for doing so will keep you from feeling uncomfortable or confused. When you are relaxed and confident you are in the flow and can’t help but feel good especially when you remember that you can accomplish anything you set your mind to.

I thought it would be good to share some of my thoughts and a few investment tips on how to handle a stormy stock market environment when large up and down swings so you can keep avoiding that feeling of being out of balance.

A great place to start is to become informed about your investments. Where do you get your financial updates? Are you confident that your current investment strategy will do well when the stock market is not rising?  By reviewing your portfolio now, you can be more comfortable with your investment holdings and avoid unnecessary stress. Now is not the time to walk away and hide. Now is the time to take a sincere interest in what is happening so you can make informed decisions about what needs to change.

If you oversee your own investments then you want to have an investment strategy in place that will meet your needs over time. Begin with a diversified portfolio that suits your needs within a time frame that will help you meet your goals and objectives.

A good investment strategy also starts with a clearly defined objective. Your strategy needs to be flexible and allows you the ability to exit quickly in order to reduce your exposure if the stock market starts to fall.  Lock in some of your profits. You never go broke taking a profit.

You also could seek the personalized advice of an investment professional to answer your specific questions one-on-one.  What is the review process that you have in place for your investment portfolio?  Do you have a strategy to manage risk? You can review your portfolio or have a professional do this for you.  Simple changes in your current portfolio can help you cut your risk and increase the potential return.

Below are some investment tips to start you on the right path for building wealth.

11 Simple Investment Tips To Increase Your Investment Success

  1. Be willing to invest in you for your well-being and inner peace. Work on you as part of your everyday life and reap the benefits.
  2. Track your investments to see how they are performing on your phone or the internet. One of my favorite free resources is Yahoo (yahoo.com). If you have an iPhone download the application “Stocks”. You can follow the market activity easily, your favorite ETFs, stocks and mutual funds to see how much they are rising or falling.
  3. Diversify your investments that include a broad mix of stocks and bonds. As you grow older it’s a good idea to move your assets into less-risky investments. A quick rule of thumb is to have an allocation to bonds that is equal to your age.
  4. Don’t let one investment make or break your investment account. Something you didn’t expect could occur at any time.
  5. Make your investment decisions with the current trend of the market. Your risk is larger when you go against the trend. If you do, don’t marry your investment. Get in and get out quickly.
  6. Have a flexible portfolio that is liquid. Keep your entire portfolio in mind when making changes in your investment portfolio.
  7. Manage Your Risk. Know in advance how much risk that you are willing to take.
  8. Have a plan to protect your winning investments. With a simple exit strategy of raising your exit point as your stock moves higher, you will let your profits run.
  9. Avoid big losses to achieve consistent gains.  Cut your losses quickly so they don’t get out of control. Make it a priority to protect your investments before they move too far against you.
  10. Don’t get into the mentality of not wanting to take a loss. It takes 100% profit to cover a 50% loss.
  11. Review your investment portfolio to see if any individual stock, an exchange-traded fund (ETF), or bond position exceeds 5% of your overall portfolio. If it’s not performing, or it’s too volatile consider reducing at least part of your investment.

Start using just a few of these tips now, and see how your perception about money starts to change. Make it a practice to spend some time watching your money so that you will be prepared for changes that occur and you are ready for potential decisions that may arise so you are able to make those informed decisions with a calm spirit. Even small changes in your portfolio can have a positive impact. When you take care of your inner well-being your ability to handle the ups and downs of the market will become easier over time. Changes don’t have to be all at once and can easily be broken down into even smaller tasks over time. If you find that you are still feeling a bit unsure of your path to wealth, remember you can step away and get some help to guide you through the process. Stop hiding or avoiding talking about money. You don’t have to feel stressed or overwhelmed by it, you truly can build your wealth with confidence and inner peace.  Decide today that NOW is the time to feel good about money. I’m here to help you on your journey to wealth.

If you like this article you will love my free ebook Grow Your Wealth and Well-Being.

 

 

 

 

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The Dow, S&P 500 and Nasdaq completed its best year since 2013.  Many global markets broke out from long-term down-trends igniting interest among investors, achieving gains of over 20%. In addition, 2017 was one of the least volatile years I have witnessed in my over 35-year career.   Technical indicators have confirmed the highs made in the major averages, and uptrends remain in effect.

The question remains can the rally continue in 2018?

The probabilities are high that further gains are likely.  Our models indicate a positive market climate for the start of 2018.  The bulls remain in control for now.  However, optimism is at extreme levels, (a contrary indicator), investor’s cash is at levels that are the lowest since 2000, and interest rates are rising.

The Moment of Truth for the S&P 500 (SPY): Intermediate upside objectives are close to being met.

The SPDR S&P 500 (SPY) Weekly Price And Channel

The S&P 500 (SPY) is comprised of 500 stocks of the largest companies in the U.S. When you invest in the S&P 500 (SPY), you are getting a broad representation of large-cap U.S stocks with moderate risk.

The top portion of the chart is the weekly (intermediate) SPDR S&P 500 (SPY) ETF and its price channel (purple lines).  The upside channel objective is 276.00 (orange line).  The S&P 500 (SPY) has been in a weekly uptrend since February 2016 (black line), with only a minor penetration.

Until the upside trendline on the S&P 500 (SPY) is broken, where the SPY breaks below 256.00 on a weekly close, no serious threat of a major decline is likely.

The SPY declines in 2017 were less than 3%, much lower than normal. In 2018 look for declines to be larger as volatility picks up and investors decide to lock in some of their profits.

Notice how the SPY is very close to its upside objective. If penetrated it would be bullish and suggest the rally can go significantly higher.   A turn down in the near term without reaching the channel objective at 276.00 would suggest the SPY is ready to pause and potentially pullback to support at 244.00.

The lower portion of the chart is the 12-26-9 MACD, a measure of momentum.   MACD is rising and has confirmed the recent price high made by the S&P 500 (SPY), (orange circle), suggesting the final top has not been reached.   MACD is showing strength instead of weakening momentum.

Summing Up:

Stocks continue their advance to start 2018 after completing its best year since 2013.     There is no serious threat of a major decline unless the S&P 500 (SPY) intermediate uptrend is violated.  Watch for a shift in trend if the SPY breaks below 256.00 on a weekly close.  For now, continue to celebrate and enjoy the ride as the bulls remain in control and the bears remain in hibernation.

I would love to hear from you.  Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

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*******Article published by Bonnie Gortler in Systems and Forecasts January 05, 2018

 

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

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When was the last time your investment advisor or you hae reviewed your portfolio?  Have you noticed the wider intraday fluctuations in the major averages?  The quiet days of the major averages moving less than ½ of a percent appear to be over.  There are wider swings in the movement of stocks and the market averages each day.  Volatility in the U.S. and international markets has started to pick up.

The good news is our stock market models indicate a positive market climate. Also favorable seasonality remains supporting the stock market, along with the intermediate and long-term trend being up.  However, a bumpier ride may be in store for the next several weeks.

A shift out of technology appears underway. 

Technology stocks have been much more volatile as of late. The selling pressure started before the news that the Senate would approve the tax bill, and further intermittent selling has continued since the bill passed.  Investors have recently rotated into telecommunications stocks, consumer discretionary, staples, financials, and industrials after the approval of the tax bill.  The shift out of technology may be only temporary, but I believe risk has increased substantially in the technology sector since the beginning of the year.

I recommend reducing your technology exposure if you are heavily invested.  The Nasdaq relative strength is now weaker than the S&P 500 and is losing momentum. This could be a warning of a possible short-term pullback in technology that could carry through to the overall market.  In addition this could affect other sectors that are also extended in the near term.   It’s a good idea to keep an eye on the top holdings in the Nasdaq 100 (QQQ), to confirm the shift away from the technology sector. It’s a little early to tell if it’s profit-taking or the start of a larger move lower.

 

 

 Figure: PowerShares QQQ ETF (Nasdaq 100 Index) Weekly Price and Trend Channels (Top), and MACD 12-26-9 (Bottom)

The top part of the chart shows the daily Power Shares 100 (QQQ), an exchange-traded fund based on the Nasdaq 100 Index, and its operative trend channel (purple line). The QQQ includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq.  As of 12/5/17, Apple, (AAPL) is the largest holding comprising 12.19%, Microsoft Corp (MSFT) 8.75%, Amazon.com, Inc. (AMZN) 7.63%, Facebook, Inc. Class A (FB) 5.70%, Alphabet Inc. Class C (GOOG) 4.86%, and Alphabet Inc. Class A (GOOGL), 4.23 % totaling 43.36%.

The technology sector has been one of the strongest areas of the stock market this year. The QQQ has made new highs with only a few small pullbacks along the way. The declines were sharp, but never broke the uptrend and were able to recover to new highs.  This time could be different. If investors continue to rotate out of technology, the selling pressure will be magnified and money may flow into other sectors of the market.  If this indeed is the case, a sign would be if the QQQ weakens during the late afternoon trading hours especially in the last hour of trading.

The intermediate price trend remains up as long as the QQQ is above its uptrend line (orange).

Support is at 147.00 and the upside channel objective is at 164.00.  If the QQQ falls below support at 147.00 on a weekly close, the intermediate trend would change from up to down, implying weakness potentially to the middle channel at 140.00 followed by the lower channel at 117.00.

The bottom half of the chart is MACD (12, 26, 9), a measure of momentum. In June, MACD made a high.  The difference between now and June is MACD not confirming the price high made in QQQ.  The negative divergence is spread over 26 weeks.  Time is no longer on the side of the bulls.

On the other hand, MACD has not yet generated a sell, so it’s still possible for MACD to turn up and move higher to confirm the QQQ high.  I am recommending lightening up on technology stocks now.  If you are overly invested in technology stocks, lock in some of your profits before a decline occurs.  An old adage I have learned over my 35+ years “You Never Go Broke Taking a Profit”.   If you do decide to wait, I recommend keeping an eye on the top holdings in the QQQ.  If they start weakening again, have a plan ready in case further selling pressure occurs.

Figure: Daily Price of Microsoft (MSFT), Amazon (AMZN), Facebook, (FB) Apple (AAPL), and 12-26-9 MACD

In the past few trading sessions, technology stocks have been under some selling pressure. Uptrends are in effect for Microsoft (MSFT), and Apple (AAPL).  Since November daily MACD patterns on all of these stocks are weakening, a warning sign a decline may be imminent.  MACD is not yet oversold, below 0, or in a favorable position to support an extended rise.  MACD uptrends (purple lines) have been broken in Microsoft (MSFT), Apple (AAPL) and Facebook, (FB).  Only the MACD uptrend in Amazon (AMZN) remains in effect.

If the top holdings in the QQQ continue to weaken, further gains for the overall market could be jeopardized in the short-term.  For aggressive investors and traders, here are some key levels of guidance.

Microsoft (MSFT) filled its gap from October and has risen the past two days.  Further decline would not be a good sign.  Support is at 77.00 followed by 72.00.  Resistance is at 88.00.

Facebook (FB), has the most disturbing pattern of the group.    FB broke its daily price uptrend this past week.  What is different now?  The weekly uptrend (not shown) has also been violated.  Therefore, the short and intermediate term is now down.  In addition, MACD is now on a sell with a negative divergence in place.  The risk is higher than at any time this year based on the charts.  During the recent quiet market environment where pullbacks have been contained, investors have been profitable buying quickly into weakness. Now selling strength could be a better strategy.   Resistance is 179.50 followed by 184.00.  Support is at 165.00, followed by 161.00.

Amazon (AMZN) peaked in late November, also under some selling pressure, but its chart pattern is more constructive because it remains above its breakout level in October. Resistance is the old highs at 1003.00 followed by 1029.00.   Support is at 1108.00 followed by 1012.00.

Apple (AAPL) made a new all-time high on November 8 at 176.24.  Apple (AAPL has pulled back in a quiet decline but remains in an uptrend. Support is at 163.00.  Resistance is at 175.50.   Many times Apple is a leader in the technology sector.  A break through resistance would imply potential to 185.00. If this were to occur it could boost the entire sector.

Summing Up:

The market as a whole has been extremely resilient. The daily range of the major averages has widened, suggesting volatility could pick up, with an increase in risk compared to earlier in the year. Weakening momentum patterns are clear and spread over time which normally doesn’t work out well.  However, 2017 is not an ordinary market; it’s one that is defying the odds. The short-term and intermediate-trend remain up for now.   If you are overly invested in technology stocks, I recommend you lock in some of your profits before a full-fledged decline occurs. If the QQQ falls below support at 147.00 on a weekly close, the intermediate trend would change from up to down, implying weakness sooner rather than later.

I would like to wish you and your family a happy holiday season full of joy, health, and prosperity.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

Sign up for a FREE 3 issue trial of Click Here: The Systems & Forecasts Newsletter

*******Article published by Bonnie Gortler in Systems and Forecasts December 07, 2017

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

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Fun video with the Maccabeats and a tasty recipe of Low-Fat Potato Latkes

One of my favorite times of the year is the Jewish holiday called Chanukah also known as the Festival of Lights. Time moves by quickly. Our children have grown into wonderful young adults,  I’m so grateful and thankful our family keeps the tradition going each year getting together, sharing our love, and having fun celebrating Chanukah together.

Chanukah in 2017 starts at the sunset on December 12 and will continue for 8 days until the sunset on December 20th. Chanukah is a tradition to give young children gifts for eight nights.   As with other major Jewish holidays, candles are lit, appropriate blessings are made, followed by a festive meal with loved ones.

Wishing all of you who celebrate a very happy Chanukah.

Chanukah celebrates the triumph of light over darkness, of purity over adulteration, of spirituality over materiality.

Chanukah Customs:

  • Eating foods fried in oil — latkes (potato pancakes) and sufganiyot (doughnuts)
  • Playing with the dreidel (a spinning top on which are inscribed the Hebrew letters nun, gimmel, hei and shin, an acronym for Nes Gadol Hayah Sham, “a great miracle happened there”);
  • Giving of Chanukah gelt, gifts of money, to children.

 

Listen to the Maccabeats, Chanukah

potato latkas

Enjoy this delicious recipe for Low-Fat Potato Latkes

Low-Fat Potato Latkes

  • 3 teaspoons vegetable oil, preferably canola
  • 2 pounds russet potatoes (about 4 or 5), peeled
  • 3/4 cup finely chopped red onion (about 1 medium onion)
  • 1/4 cup all-purpose white flour
  • 1 teaspoon salt
  • 1/4 teaspoon freshly ground black pepper
  • 1 large egg, lightly beaten
  • 1 large egg white, lightly beaten

Set oven racks at middle and lower positions of the oven. Preheat oven to 450° F. Prepare 2 baking sheets by brushing with 1 teaspoon oil on each sheet.

Grate potatoes using hand grater or shredding blade of food processor. Place in a large bowl and add onions, flour, salt and pepper; toss to mix well. Add egg, egg white and remaining 1 teaspoon oil; toss to mix.

Drop onto prepared cookie sheets by the tablespoonful and press lightly to form cakes. Bake for 10 minutes, or until golden brown on the bottom. Flip latkes, switch position of baking sheets, and bake about 5 more minutes, or until golden brown.

Transfer to a platter, arranging browned-side up, and serve with no-fat sour cream or applesauce, or both. May be made ahead and stored overnight in fridge. Reheat at 350° F for 10 minutes. Makes about 24 latkes.

Tip: Use the grater attachment of a food processor to simultaneously grate both the potatoes and the onion. Set the shredded material in a colander over a bowl to catch the dripping liquid. When the grated potato-onion mixture stops squishing combine with the egg, egg white and remaining teaspoon of oil as above. Carefully pour out the liquid collected from under the grated potatoes and onions, taking care to save the white cake which has formed at the bottom of the bowl (the potato starch). Add this white stuff to the latke mixture and mix well. Complete the above recipe as written.

Source: http://www.chabad.org/library/article_cdo/aid/773110/jewish/Low-Fat-Potato-Latkes-I.htm

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Happy 2018! I hope you enjoyed the holiday season with your family and friends. My family and I had a great time traveling and it ended all too soon. The time away re-energized my spirit and had me thinking about shifting beliefs and the impact it has on one’s life and overall well-being. My experience has taught me that making even a minor adjustment can result in major changes. How much of a difference do you think that shifting your beliefs and creating change would help you enjoy life more?  The answer is different for everyone. Whether it’s during the holiday season, the start of a New Year, or just another normal day making your well-being a priority is one of the most important decisions in your life. Do so by starting simply by investing in YOU! This can be done all year long, not just during the holiday season, a weekend, or for a special occasion. Taking care of your well-being helps you and everyone around you to live a full and prosperous life. The road can be overwhelming at times so know that I am here to support you.  Together we can seize the moment and create real change in your life.

What about you? A new year with a new beginning signals the perfect time to take small steps toward your goals, desires, and dreams in a consistent way. Throw away the thought of resolutions and think more in terms of making better life choices. Doing more doesn’t always make things better. You approach real change in a strategic manner mixed in with a dose of reality. You will be surprised how good you feel when you focus on one area at a time and with the desire of obtaining what you want. Take charge of your actions, instead of making a bunch of excuses.

You want to make practical decisions based on facts, not opinions or the old played out beliefs that you might have.  Avoid getting caught up in your emotions and reacting to everything and everyone around you. You are the master of your ship. You can learn to respond to others without overreacting. It takes some practice to raise your awareness and keep your composure when things are not going your way. Try pausing and to count to 10 before you respond. Those 10 seconds can seem like forever but believe me, you will be grateful that you waited.

What is the one action you can take that will create the biggest impact in your life? Well, I’m glad you asked.

You have the power to create the changes in your life that will instantly improve your wealth and well-being. Don’t make drastic changes all at once since that will only overwhelm you and could cause you to give up before you have even given yourself a chance to succeed. You will also discover how much your energy will rise and how much easier your day will flow.  By choosing one action step and following through with focused attention will start the ball rolling so you can have a life that is happy and fulfilling while you enjoy inner peace like never before.

11 Simple Ways to Create Change and Improve Your Well-Being

  1. “Believe You Can”.
  2. Take baby steps towards your goals.
  3. Create some quiet time in your day by getting up 30 minutes earlier than normal.
  4. Listen to your favorite music and relax your mind.
  5. Choose something you love to do that you are passionate about.  For example: writing in a journal, prayer, meditation, or exercise. By doing what you love to do you will shift your thoughts into a more positive frame of mind. (I love my time I create for journaling, writing, and exercise, listening to music in the background).
  6. Do less, not more.  Stop now and remove one item that you do often but are not getting the results you want.  Your day will flow better and you will get more done without feeling stressed and not miss what you were doing.
  7. Create a morning and evening routine to begin and end your day that makes you feel good.
  8. Open your arms to change, stretch yourself, and leap out of your comfort zone.
  9. Be kind and compassionate. Be thoughtful of how others feel. Think about what the other person might be going through. Don’t judge them. Remember there are two sides to every story, and sometimes even three.
  10. Be patient and kind to yourself instead of being hard on you.  If you had a little too much to eat or drink, don’t beat yourself up.
  11. Give your body some love.  Create a daily habit to move your body.  Go for a walk or exercise. Start with 5 minutes each day. Expand the time when you can. Exercise not only helps you lose weight, but it can empower and relaxes you so you feel so much better, (like it has done for me).

This time of year is very exciting and can be even more impactful when you learn to set goals to inspire you.

You have the power to create change when you make the conscious decision to have an open mind and to take advantage of all the opportunities that exist around you. This is your life and you can have everything you ever dreamed of. Reach out and make the adjustments so that the best of everything can be yours.

Sending wishes of joy for you and your family.

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The major averages, Dow, S&P 500, and Nasdaq were in a consolidation phase within a low volatility environment. However, in recent weeks intra-day volatility has picked due to concern about tax reform.  When the S&P 500 (SPY) is down 0.5% in one day, it gets your attention, especially since there have been many daily changes of no more than .38% on the up or downside. This leads me to believe it’s only a matter of time before daily trading ranges will begin to widen.   However, with support levels holding and the intermediate and long trends favorable, the odds favor the bulls.

After weeks of consecutive gains, there was some weakness in the tape, along with a loss of momentum in some technical indicators.   Losses for the major averages were minor and much more forgiving than compared to individual stocks.   Many stocks this quarter fell 5% or more and sometimes double digits, especially after earnings misses or modest projections of future sales or earnings.

I continue to believe the Russell 2000 Index (IWM) is a clue to signaling the trend of the overall market.

During the last few weeks, the Russell 2000 (IWM) had been losing momentum, weaker than the Dow, S&P 500, and the Nasdaq, not even able to break the hourly downtrend.  However, a shift in relative strength in favor of the Russell 2000 over the S&P 500 started on 11/16/17, and the Russell 2000 (IWM) is now leading the advance.   This is overall bullish.

Figure: Daily iShares Russell 2000 Index (IWM)/S&P 500 Index (SPY) Ratio (top) and 12-26-9 MACD Ratio (bottom)

 

 

The top part of the chart on page 5 is the daily Russell 2000 Index /  S&P 500 Index ratio (IWM/SPY).  A rising line means the IWM is stronger, and if falling, the SPY is stronger.   After outperforming the S&P 500 (SPY) from the August lows, the IWM/SPY ratio peaked on 10/02/17.  Since then, the IWM/SPY ratio had been trending lower with a series of turn ups (green circles) that were unsuccessful as the IWM moved lower. However, the IWM has broken its downtrend (pink line), after forming a low, implying the IWM will resume its out performance like earlier in the year over the S&P 500 (SPY). This is a positive sign the next leg of the advance may have begun. It also aligns with the fact that historically small caps rally into year end.

In the unlikely event another failure takes place, and the IWM starts to lag, this would not be a good sign for the overall market.

The lower portion of the chart is the MACD of the IWM / SPY ratio.  The IWM/SPY ratio MACD has been on a sell in a steady downtrend from its peak.  However, it’s very positive that MACD has turned up generating a buy and confirming the price turn up in the IWM/SPY ratio (top chart).  In addition, the daily MACD of the Russell 2000 (IWM, chart not shown) is oversold and has given a fresh MACD buy.

Figure: S&P 500 SPDR ETF Weekly Price Channel and upside objective (SPY, top) and 12-26-9 MACD (bottom)

 

Key uptrend and intermediate support remains intact for the S&P 500 (SPY)

The chart above is the weekly SPDR S&P 500 (SPY) ETF and its weekly (intermediate) price channel (purple lines). The upside channel objective is 276.00 (orange line).  The S&P 500 (SPY) is comprised of 500 stocks of the largest companies in the U.S.  When you invest in the S&P 500 (SPY), you are getting a broad representation of large-cap U.S stocks with a moderate risk.

The SPY remains in an uptrend that began in February 2016 (green line).  The declines this year in the SPY have been minor and brief.  If the SPY falls below 245.00, the area where the SPY broke out of its most recent trading range, this would turn the intermediate trend negative and imply weakness towards the middle channel at 212.00.  Until the upside trend line is broken, no serious threat of a major decline is likely.

The bottom half of the chart shows the Relative Strength Index, a measure of momentum developed by Welles Wilder.  RSI is based on the ratio of upward price changes to downward price changes. RSI is 77.15 confirming the high made by the SPY.  When RSI gets above 70 it’s a sign of underlying strength.  It’s bullish the uptrend in RSI from 1/16/16 remains intact.  Short-term weakness is perfectly normal after a large run-up in prices to alleviate the overbought condition.  However, market tops rarely occur when RSI gets over 70- 75.

In Sum:

As long as the S&P 500 (SPY) uptrend remains in effect above 245.00, the SPY is likely to work its way higher toward the upper weekly channel at 276.00.   If the downtrend is broken (green lines) on either price or RSI, a warning sign would be given for a potential change in trend and a short-term correction to begin.

Further evidence higher prices are likely.

Figure: S&P 500 SPDR ETF Monthly Price (SPY, top) and RSI 14 (bottom)

 

The long- term uptrend in the S&P 500 (SPY) that began in 2009 (purple line), remains intact. There was only one false overshoot for two months below the line in 2016 (pink circle).   If the SPY falls below 225.00 this would turn the long-term trend negative.  For now, the bulls remain in control until proven otherwise.

The bottom half of the chart shows the Relative Strength Index.  The monthly RSI is also confirming the underlying momentum in the S&P 500 (SPY).   It’s bullish the uptrend in RSI from 2009 is clearly intact.  It’s also bullish that RSI is at 80.34 (green circle), still rising and showing strength with a higher reading than the previous peak of 77.01 the S&P had in June 2014 (red circle).   It’s highly unlikely a significant decline will occur now with the long and intermediate term trend favorable.

The first decline in the S&P 500 (SPY) of more than 3-5 % will likely be a buying opportunity with at least one more rally attempt before a market top would be reached.

Summing Up:

This is a broad rally that has started after a period of consolidation. Small caps have come to life, now stronger than the S&P 500 (SPY).   Market internals that were weakening and losing strength are now improving. Support levels remain intact.  The intermediate and long-term trends on the S&P 500 (SPY) are up.   As long as the S&P 500 (SPY) remains above 245.00, the SPY is likely to work its way higher towards 276.00.

I would love to hear from you.   Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

Sign up for a FREE 3 issue trial of Click Here: The Systems & Forecasts Newsletter

*******Article published by Bonnie Gortler in Systems and Forecasts November 22, 2017

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

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Who would have thought the major average averages would be in a steady uptrend since late August?  There has been no decline of more than 3% on the S&P 500 index as the market climbs the wall of worry to record highs. Short term price uptrends and support levels remain intact in the major averages.

The Russell 2000 (IWM) has been in a consolidating pattern since October 4. Several times the IWM has tried to break out to the upside.  However, it’s a bit worrisome the latest rally attempt failed this week. Also a point of concern, investor sentiment is showing very high optimism. In the past, at these levels short-term declines have started.  On the other hand, the Volatility Index (VIX) that measures fear is near its lows, a positive sign, and favorable seasonality has begun.

Watch the Movement of Small Caps Closely

Weakness in the Russell 2000 (IWM) or sudden weakness in Technology stocks (QQQ) would be a sign a short term pullback is likely.  A bullish sign would be if the Russell 2000 (IWM) index were to stop its present decline, reverse and take out the highs made on November 1.  In addition, if the Russell 2000 (IWM) could outperform the S&P 500 (SPY), new 52-week highs begin to expand, and volume increases on up days, while new 52-week lows contract, this would be positive for the market.

The iShares Russell 2000 Index (IWM) Weekly Price Channel, Upside Objective Channel, and 19-26-9 Week MACD

The top portion of the chart shows the weekly iShares Russell 2000 Index ETF (IWM) which is made up of companies with a market capitalization of between $300 million and $2 billion. The IWM made a high of 150.68 on 10/09/17, breaking out above its upper channel.  A consolidation followed with the IWM confined in a tight trading range, but has since turned down.  Even so, IWM is holding above an important support area.

The good news is during the short-term decline, the IWM remains above the weekly uptrend (pink line) while the other major averages are holding their ground.

The lower portion of the chart is MACD, a technical indicator that measures momentum. MACD peaked in January 2017, confirming the price high. The MACD sell turned out to be premature. The IWM consolidated while MACD weakened but didn’t get oversold, and go below 0. In September MACD turned up, broke the down trend (black line) not confirming the October high, and is now starting to roll over, showing a sign of a loss of momentum.  It’s a little early to know if MACD will continue to decline or if MACD will turn up and have enough strength to make a new momentum high.

The Russell 2000 (IWM) support is at 143.00. Resistance is at the old highs at 150.68 with an upside objective of 162.00.

Summing Up:

With our models in the most favorable condition and favorable seasonality, I am looking for the short term decline in the IWM to reverse and at least challenge the old highs at 150.69 and potentially reach the upper channel at 162.00.  If the IWM were to close below the lows made on 08/18/17 at 134.12 (circled in orange), this would negate my bullish view.

Intermediate Uptrend Continues In Technology Despite Slowdown in Momentum

 

PowerShares QQQ ETF (Nasdaq 100 Index) Weekly Price and Trend Channels (Top), and MACD 12-26-9 (Bottom)

The top part of the chart shows the weekly Power Shares 100 (QQQ), an exchange-traded fund based on the Nasdaq 100 Index, and its operative trend channel (purple line).

The QQQ includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq stock market based on market capitalization.  As of 11/7/17, Apple, (AAPL) is the largest holding comprising 12.47%, Microsoft Corp (MSFT) 8.96%, Amazon.com, Inc. (AMZN) 7.45%, Facebook, Inc. Class A (FB) 5.90%, Alphabet Inc. Class C (GOOG) 4.96%, and Alphabet Inc. Class A (GOOGL), 4.33 % totaling 44.07%.

The QQQ breached the middle channel after a 9-week consolidation (red circle) on 04/24/17 and continues to make new highs with only small pullbacks along the way.  The intermediate price trend remains up as long as the QQQ is above its uptrend line (orange).  Support is at 145.00 and the upside channel objective at 162.00.  If the QQQ falls below 145.00, on a weekly close, (an unlikely event), this would change the intermediate trend from up to down, implying weakness potentially to the lower channel at 116.00.

The bottom half of the chart is MACD (12, 26, 9), a measure of momentum. There has been no MACD confirmation of the highs made in QQQ as it did in June.  However, it is a positive sign MACD has turned up, after the negative divergence in MACD (green circles) and the uptrend is broken. I recommend keeping an eye on the top holdings in the QQQ over the next several weeks for an advanced warning of a trend change.

In Sum:

Technology continues to be in favor, outperforming the S&P 500.  As long as the QQQ is above 145.00 on a weekly close (orange line), more gains are likely toward the upper channel objective at 162.00.  Our models are positive and price uptrends are intact so there is a good reason to expect a year-end rally. Be aware of a short term decline to start if small caps remain weaker than the S&P 500, the top holdings in the QQQ begin to falter, and the uptrends are violated.  However, the trend is your friend.  Continue to enjoy the ride.

I would love to hear from you. Please call me at 516-829-6444 or email at bgortler@signalert.com to share your thoughts or ask me any questions you might have.

Sign up for a FREE 3 issue trial of Click Here: The Systems & Forecasts Newsletter

*******Article published by Bonnie Gortler in Systems and Forecasts November 9, 2017

Disclaimer: Although the information is made with a sincere effort for accuracy, it is not guaranteed that the information provided is a statement of fact. Nor can we guarantee the results of following any of the recommendations made herein. Readers are encouraged to meet with their own advisors to consider the suitability of investments for their own particular situations and for determination of their own risk levels. Past performance does not guarantee any future results.

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