Higher Than High

GSRTrades Weekly Market Report

Higher Than High

Market Bias
 

Buyer’s Caution

Our market bias is based on a combo of Fundamental and Technical evidence. Economic and earning trends are matched against our analysis of price and volume charts, giving us an inidcation of how friendly the market is for our beloved Breakout Growth Stocks.

This is active trading, not investing. Our holding periods can las a day to months. The idea here is to keep it simple. The goal is to accumulate as many trading profits as possible.

 

Where We Are

“What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.” – William O’Neil

Who hasn’t been expecting some type of pullback or correction in the market?

Just as things seem like they’re finally set to rollover – out of nowhere comes  a sharp reflexive rally, catching shorts in its net.

The amount of bullish evidence in the market has been overwhelming the past few weeks.

Steady accumulation of shares from institutional grade buyers has given little breathing room for sellers.

We’ve also watched just about every sector rise convincingly above its major moving averages.

Even the lackluster performing Banking Index eventually settled into this dominant trend.

It should also be noted that the Biotechnology Index has formed an impressive looking one-year base.

Breakouts from top-rated growth stocks have also stuck.

But if they’re any indicator that things have slowed down, they’ve been telling us for a couple weeks now that buyers may be a little tired.

We also need to keep it in perspective that volume in general hasn’t been too impressive. It’s summertime after all.

It’s more than likely a new tone will set in sometime in September, when heavy hitters play a larger role in the action.

Until then we’re waiting for a pullback or correction – just like everyone else.

The market can play head-fake games for weeks, but ultimately the odds are that the 50% rally the broader market has given off its March low will revert to lower ground.

How and when that happens, and for how long, is anybody’s guess.

 

 

Technically Speaking

 

MAJOR INDEX PERFORMANCE
BIAS
Index
Change
Wk. %
Action
+
DJIA
+184.56
+1.98%
New High for year
+

Nasdaq
+35.38
+1.78%
New High for year
+

S&P 500
+22.04
+2.20%
New High for year
+

Russell 2K
+17.61
+3.12%
New High for year

Arrows denote sector’s position above or below its 40-week exponential moving average. + indicates 50-day moving average above 200-day moving average.

 

FOUR-WEEK VOLUME INDICATORS
   
Accumulation
Distribution
BIAS
Index
Major
Minor
Major
Minor
DJIA
4
1 3 1

Nasdaq
3
2 2 1

S&P 500
5 1
4
1
Russell 2K
5 1 1  0
Accumulation = Day when index is up with volume above previous day’s. Distribution = Day when index is down with volume above previous day’s. This is how we measure institutional interest in market. Major days = when volume stronger than 50-day average. Minor days = when volume below 50-day average.

 

SECTOR PERFORMANCE
BIAS Sector Wk. % Action

U.S. Dollar -$DXC
-0.97% Consolidates below 50-day MA
+

Gold & Silver Miners -$XAU
+1.01% Regains 50-day MA
+

Consumers -$CMR +2.96% New High for year
+

Cyclicals -$CYC +1.53% Shy of New High for year
+

Technology-$DJUSTC
+1.79% New High for year
+

Semiconductors -$SOX +2.26% Shy of New High for year
+

Software -$GSO -1.03% Shy of New High for year
+

Telecoms -$XTC +2.42% New High for year
+

Banks-$BKX +2.84% New High for year
+

Broker Dealers -$XBD +1.21% Shy of New High for year
+

Retail -$RLX +1.29% Shy of New High for year
+

Healthcare -$HCX +2.89% New High for year
+

Biotechnology -$BKX +2.40% Shy of New High for year
+

Pharmaceutical – $DRG +2.82% New High for year

REITs -$DJR
+8.32% Rallies above  50-day MA
+

Homebuilders -$DJUSHB +3.73% Shy of New High for year
+

Transportation -$TRAN +1.67% Shy of New High for year
+

Airlines -$XAL
+1.88% Two-week consolidation
+

Defense -$DFX +2.97% New High for year
+

Energy Index -$IXE +3.42% Rallies above  50-day MA

*Arrows denote sector’s position above or below its 40-week exponential moving average. + indicates 50-day moving average above 200-day moving average.

 

Potential Market Movers This Week

Earnings releases:

  • MONDAY: none
  • TUESDAY: Big Lots, Inc. (BIG), Burger King (BKC), Chico’s FAS, Inc. (CHS), Medtronic Inc. (MDT)
  • WEDNESDAY: Dollar Tree Stores (DLTR), Williams-Sonoma (WSM)
  • THURSDAY: Bebe Stores (BEBE), Toll Brothers (TOLL)
  • FRIDAY: Tiffany & Co. (TIF)

Economic data:

  • MONDAY: none
  • TUESDAY: Durable Orders, Consumer Confidence, S&P/Case-Shiller Home Price Index
  • WEDNESDAY: New Home Sales, Crude Inventories 
  • THURSDAY: Initial Claims
  • FRIDAY: Q2 GDP Prelim, GDP Deflator, Core PCE, Personal Income, Michigan Sentiment Revision

 

This Week’s Work On Discipline

“Once you try to control or discipline your anger, then eventually even big events will not cause anger..” — Dalai Lama

This Market Report is our broad analysis that is the foundation for our Growth Stock Report, which highlights trading opportunities in individual stocks.

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