Skip to main content

Stocks surge to resistance -- real momentum or just another head fake?

It's been over a month since the last time I wrote a post like this so I'm taking the opportunity today to provide an overview of this weekend's stock market BUY and SELL signals available at Alert HQ and to take a look at what our indicators are saying.

This weekend we had the following stock picks and signals:
  • Reversal Alerts based on daily data, we have 98 Alert HQ BUY signals and 1 SELL signal
  • Reversal Alerts based on weekly data, we have 7 Alert HQ BUY signal and 3 SELL signals
  • We have 72 Bollinger Band Breakouts based on daily data and 59 are bullish. We also have 101 Breakouts based on weekly data of which 86 of them are bullish.
  • We have 578 Cash Flow Kings
  • 31 Swing Signals --  every single one is a  BUY signal
  • 112 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 41 stocks that are new additions to the list and 14 that fell off the previous list from Thursday.
  • 81 Trend Busters based on daily data of which all but 1 are BUY signals. We also have 46 Trend Busters based on weekly data  of which 24 are BUY signals.
  • 136 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We see 45 downside gaps and 91 upside gaps based on daily data. We also have 39 Gap Signals based on weekly data of which 27 are bearish.

The view from Alert HQ --

The data for the following charts is generated from our weekly Alert HQ process. We scan roughly 6040 stocks and ETFs each weekend and gather the statistics presented below.

In this first chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We then plot the results against a chart of the SPDR S&P 500 ETF (SPY).

Despite how erratic the market has been lately, this chart looks like a slow uneven improvement has been underway since early July. As negative as many bloggers are on the prospects for the market, what we see here is that roughly half of all stocks are now above their 50-day moving average. That is certainly not a sign of a bear market.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.

This chart clearly shows the bipolar nature of the market these days. Almost every month, the number of stocks in down-trends surges to a peak and then, just as quickly, drops off while the number of stocks in up-trends surges. You couldn't have a better picture of a market that is stuck in a trading range. Be that as it may, it looks like another cycle started this week with the number of stocks in up-trends beginning to increase, reflecting a week where stocks racked up solid gains. This suggests at least one or two more weeks of bullish follow-through before the cycle turns again.

I kicked off this post by listing the weekend's results at Alert HQ. Pretty much every single screen was bullish. Some, like the Swing Signals, Trend Busters and the Reversal Alerts based on daily data were extremely bullish. The Trend Leaders list, which includes Aroon analysis in its combination of indicators, shows improvement but also shows that we are not yet at a point where the rally is exhausted.

So far, only one of the major indexes (the NASDAQ) has just managed to rise above its 200-day moving average while the others (the S&P 500, the Dow, the Russell 2000) are just below that important point. So with the backdrop quite bullish now, we'll see if the indexes can break through resistance and regain their important levels above the 200-DMA.

What other catalysts could provide the boost that stocks need? That's where the uncertainty lies. Earnings season is over, the economic calendar this week is relatively empty. Nevertheless, it seems the bias is now to the upside. It looks like "wall of worry" time again.


Popular posts from this blog

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street profess

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing wh

Interactive Ads - Google one-ups Yahoo again

Google's ( GOOG ) press release describing the expansion of a beta program for what are being called Gadget Ads has again shown that Google is unparalleled at melding technology and advertising to benefit its bottom line. Gadget Ads are mini-web pages or "widgets" that can be embedded within publisher pages. I have written in the past on Yahoo's ( YHOO ) Smart Ads and how, by more precisely targeting site users and adjusting ad content accordingly, they provide a much desired evolution of the banner or display ad format. Though Smart Ads and Gadget Ads are not really the same, I think it is fair to say that Google has seen the challenge of Smart Ads and has chosen to leapfrog Yahoo by rolling out its own update to the display ad format. The evolution of the Gadget Ad -- One of the trends on the Internet over the last year or so involves software developers creating "widgets" which can be hosted within web pages and blogs. Widgets can be pretty much any