This morning before the market opened I was watching the NASDAQ pre-market trading as I usually do and I saw it going up, up, up. The problem is the FTSI 100 at the same time was going down, down, down. I've mentioned before that when the FTSI goes down the U.S. market usually has a weak day and today wasn't an exception.
After I got back to my office this afternoon the first thing I looked at was the PC ratio. The first hour is usually the critical hour and again it was no exception. I've found that whenever the PC ratio opens above and closes above the previous day's open and close in the first hour the market is usually going to go down. That looks like this:
Now these are "rules of thumb" which means some times they don't work as well as others but most times they are pretty good indicators of market activity for the rest of the day. So add the FTSI 100 and the pcratio to your box of tools and you will probably be better off for it.
I'm still holding SYMC, WU got stripped away in the heat of the afternoon - actually before I left this morning I reset the stop order too tight and lost it. That was a mistake because my stop was swept.
I bought ORCL and Wells Fargo (WFC) at the close. Oracle was bought off a distressed list and WFC was bought because it popped over its 21-period EMA. I've got a 30 cent loss or 60 cent profit on WFC. ORCL has a 50 cent loss or $1.00 profit target - or 4 days whichever comes first.
The up/down ratio is in a nice place at 30% which is very low. The new 20 day highs barely made it to 354 and that is almost half of what it printed on Friday. The new 20 day lows on the other hand a way up at 714 and that is twice what it printed on Friday. The market sentiment as measured by the five markers we follow, DIA, SPY, IWM, QQQQ and GS (which you know what that is by now) all finished with strong white candles in the final hour of trading. Barring catastrophe or news of either good or bad persuasion we might have a tradable market tomorrow.
Poor magic coin - 37 and 29 having called a bull market for today. For tomorrow it says --- heads again - the bull will be running - I think it's right.
1 comment:
I like WFC here a lot. Great company and a low risk pick in my book.
Speaking of financials, I'd love to hear your take on USB's chart if you have a minute. I've owned it for 6 months and have made a nice little return on it without a whole lot of excitement or fanfare. What's interesting about it at the moment is that 3 of the past 4 days have been by far the three most volatile days (all up) in the time I've owned it. To what would you attribute sudden volatility in a boring stock? I can't find any major news...
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