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Market Top
- Thread starter vanzandt
- Start date
I am not so sure about shorting here but I agree the market looks toppy for different reasons. I typically do a scan for potential trades every day or 2. Yesterday my trade scans turned up only about 52 potential stocks to trade and NONE fulfilled all my criteria. I can't remember EVER having that happen. When I looked at charts for longs I found most all charts showed we were at the top edge of a bullish uptrend channel with weakness showing on weekly, daily, and hourly charts and ALL 3 time frames showing signs of being overbought. Lastly, this last leg up has been on very low volume. I suspect a pullback soon too. Ended up getting out of most all my positions waiting for another trade to develop. So I'm about 80% cash right now after locking in profits. I don't short uptrends but I will be keeping powder dry to reload on pullbacks. Good luck all.
The market is also 30+ days from the big lows around 6/27...It looks and feels to me that the "short squeeze" fuel exhausted itself around mid-July...Earnings season kept things range bound with all of the indicies trading in their own little world's...VIX/SPY were diverging late last week and Monday, usually a decent tell that the market is about to sell off a bit, but the price action has been pretty abysmal for awhile now.
Home Depot comes out with a great earnings report and the volume is anemic and the stock is heading down.
HD has always been a bellwether stock for the general direction of the DOW.
I think its safe to say, based on this fact alone, we are at the top. Keep an eye on the VIX, ... The market top is forming. -vz
van, every time I think the Market is about to sell off buyers appear to absorb the Dow and Nasdaq composite. Its totally a stock picker's market, I agree HD usually fades after earnings unless they had something beyond Whisper Numbers total blow out. HD failed at $137-$140 attempts to remain so can we infer a Market Top from HD's lack of follow through? I am reading a book on Volume showing a chart of GM in 2004-2006 when GM was stuck between $18-$25. It took almost a year to absorb all the shares because of the buyers were so picky on price.
It days like these you find stocks that have amazing power because I've lived through several Bear Markets we learn to short and find pockets of strength or "Pools of Safety" like the day of Brexit Meltdown.