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Clearly, today’s price action is unhealthy following a poor
day on Friday. There are now eight
distribution days on the Nasdaq, and today will probably be the ninth. Given the elevated distribution count and the fact that the leadership is beginning to falter, the rally is more suspect, and it is time to be
more conservative and cautious. I can’t help but look at the Nasdaq
weekly chart and wonder how much further the market can go, given the substantial move its had since January 2013.
Follow Scott O'Neil at Twitter.com/WScottOneil
I see quite a number of Growth 250 stocks popping up on the MarketSmith "Down on Volume" screen today. I have already shifted my ETF strategy and sold the remaining 50% of the shares in my IRA today. Some of my recent buys have shifted after being up in the low double- and high single-digits, and I sold those issues as to not see those turn to losses. I'd bet dollars to doughnuts IBD editorial desk will shift the market outlook to "Market in Correction" in tomorrow's paper.
G250 down on volume had almost 300 stocks in the search. Market is having a tad of selling.
As of today, the number of funds in the William J O'Neil screen is down to 54. This from 61 as market was hitting intraday highs. Something is not adding up as I would expect the number to be much higher. Since I am new to MS, wondering if anyone tracks this number and has seen it as a possible leading indicator.
@salmig I do not track this particular number but track something similar. I look at the number of stocks added and deleted from the Growth 250. The WON screen seems more weighted towards fundamental analysis (EPS and sales growth) than technical analysis (chart specifics). The G250 includes technical indicators as well, but it only updates weekly.
Account equity: Down. Leaders: Down. Broader averages: Down. Seems obvious to me.
Scott brought up the weekly chart of the Nasdaq. The trend has been every time we have a week where it dips below the 10-week, it gets back above it the next week -- no more than one week below it. We'll see if we close below it this week and if the trend I pointed out changes. No doubt though the price and volume action in this index is awful. That all said though, it's a market of stocks and for now most leading stocks are still in uptrends above key support areas.
My model said the correction started on the 17th. So far it looks like the right call. Not buying a thing lately, not that there are any pivots in stocks with good fundies.
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