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CHARTIST buys 4/24/2019
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CHART 10/30/19 STOPPED OUT
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CHARTIST STOPPED OUT TRADES 9/9/19
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10/3/19 Since closing within 0.63% of record high
territory on September 19th, the S&P 500 has
given up 3.2% over the last 10 trading sessions
and is now only 2.5% away from its August lows.
The rising 200 day line of the S&P 500 is now
closely in line with the August lows. The August
lows are where key support should come into play
for most of the major indices. The majority are
within 1 and 2.5 percent. The Russell 2000, Dow
Transports, Value Line Geometric have already
taken out their 200 day moving averages (DMA)
while the NYSE Composite and S&P Midcap
Index have crisscrossed their DMA over the past
two days.
As we go to press, the chart pattern of the S&P
500 is still positive, despite the recent damage, as
long as the August lows continue to contain it.
Having said that, it was not a good sign to see this
benchmark average try and fail over several
sessions to take out overhead resistance in
CHARTIST STOPPED OUT TRADES 4/24/19
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9/12/19 The odds favor a near term breakout into record
high territory for both the S&P 500 and Dow.
As far as we are concerned, the big story has been
the breakout of the Advance/Decline (A/D) Line
into record high territory. This places the odds
heavily in favor of the S&P 500 and Dow
following suit. On top of this, the Russell 2000,
which had been lagging, has surged 7% over the
last seven trading sessions, as well as moving back
above its 50 and 200 day moving averages.
CHARTIST 9/9/19
Monday September 9, 2019
Chartist Hotline, Monday, September 9th, 3:00 p.m., West Coast Time.
Whenever the Dow rises or falls by 1% or more or when we have recommendations, we update this hotline. Currently, our two real money accounts are in an approximate 100% invested position. The following eight recommendations (with mental stops) are for Traders with cash on the sidelines.
The Blackstone Group (BX) 45.28
Costco (COST) 262.71
Ebay (EBAY) 35.44
Home Depot (HD) 205.30
KLA Corporation (KLAC) 130.43
Lam Research (LRCX) 197.16
NXP Semiconductors (NXPI) 93.85
Western Digital (WDC) 54.34
There are no changes in the Actual Cash Account or Aggressive Account.
Traders Note: Twilio closed below its mental stop in today’s session and should now be sold.
Please Note: There will be no hotline tomorrow so our next regular hotline is scheduled for Thursday, September 12th, 3:00 p.m., West Coast Time. The next edition of The Chartist will also be published on that date.
CHARTIST STOPPED OUT TRADES
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8/27/19
Chartist Hotline, Tuesday, August 27th, 3:00 p.m., West Coast Time.
Stocks sold off today with the yield curve inversion deepening to levels not seen since 2007. The Russell 2000 (-1.48%) led the way down, finishing narrowly below its May lows, while the Dow Transports (-1%) ended almost at its May lows. The Dow lost 120 points (-0.47%), finishing narrowly above its 200 day line.
The path of least resistance continues to be to the downside with the Russell 2000, S&P Midcap Index, Value Lines Geometric and Dow Transports all below their respective 200 days lines. The Dow and S&P 500 are within striking distance of their 200 day lines as well. Declining stocks led by almost 2:1 on the NYSE and well over 2:1 on the Nasdaq.
The Actual Cash Account lost $7,760 (-0.60%).
In the Trader’s Portfolio, there were 4 winners vs. 5 losers. Roku and Shopify led on the upside, both gaining 2.8%. On the downside, Mercado Libre (-1.41%).
All of the stocks in the Trader’s Portfolio are still comfortably above their mental stops. Traders are now advised to raise the mental stop on Roku to 117.56. Also raise the mental stop on Shopify to 347.55. Roku and Shopify have gained 139% and 81% since they were recommended last April.
Our advice for investors who are following our real money accounts is to continue to maintain a fully invested position for the time being. The bears continue to have the upper hand.
Our next regular hotline is scheduled for Thursday, August 29th, 3:00 p.m., West Coast Time.
CHARTIST buys 4/24/2019
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8/26/19
While we are still on the verge of taking some defensive action, our advice is to continue to stay fully invested for the time being.
CHARTIST buys 4/24/2019
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CHARTIST It is interesting to note that at the peak of the last bull market on October 8, 2007 the A/D Line had already recorded its highs of the cycle on June 1st of that year and was in a pronounced down trend.
AD LINE peaked in June 2007
MARKET PEAK was 4 months later in OCT 2007
7/11/19 THE CHARTIST the Advance/Decline (A/D) Line is in a powerful uptrendconfirming the recent push by the benchmark S&P 500 into record high territory. As you know, theA/D Line has a history of topping out ahead of the major averages during the final stages of bull markets.In the current instance, it hit record highs on June 13th while the S&P 500 followed suit on June 20th.A/D volume also broke out at the same time. If history is any guide, this is quite bullish for the stockmarket’s prospects. It is interesting to note that at the peak of the last bull market on October 8, 2007the A/D Line had already recorded its highs of the cycle on June 1st of that year and was in a pronounced down trend.
Most Chartist stocks are in up trends.
As you can see from the above activity in the Actual Cash Account that over the past 3 plus years the portfolio went from a fully invested position without any changes for 28 months (06/02/16 to 10/25/18) to seven changes over the past 6 months. The changes highlight our real time strategy as it unfolds over the course of a buy signal to a sell signal. When our models turned positive (6/2/16) we went to a 100% invested position with an initial stop loss of approximately 7 – 10% below the invested amount. The stop is based on the entire portfolio and not on each individual position. If our stop is violated we sell the invested amount. If our sell signal is successful which it was from the 6/2/16 buy the second part of our sell strategy comes into play. The second part of our sell strategy is when we raise the stop on the portfolio. When the stop is eventually triggered we sell part or all of our positions nailing down our profits. This happened on two occasions (10/25/18 and 12/17/18). As you can see above we utilized our Volume thrust indicator and 90% Rule indicator to add invested amounts to the portfolio. On 4/24/19 our long term momentum models again turned positive in which we went to a 100% invested position. Unfortunately, we were stopped out of a portion of the portfolio just a little more than one month later. When this happens we receive emails from some of our subscribers that are not happy about being stopped out at a loss. With 50 years of investing experience and publishing the Chartist letter we realize that there is a small space between a pat on the back and a kick in the pants if your strategy undergoes periods of underperformance.
CHARTIST STRATEGY (06/02/16 TO PRESENT)
06/02/2016---Chartist long term models turned positive and we moved from a 7% invested position to 100% invested.
10/25/2018---Chartist recommended taking profits by selling 50% of the portfolio. This left the Actual Cash Account in a 50% invested position.
12/17/2018---Chartist recommended taking additional profits by selling 50% of the existing positions leaving the portfolio at 25% invested.
01/10/2019---Chartist Volume thrust indicator turned positive and we recommended taking a 15% position in the Russell 2000 (IWM) which increased our invested position to 40%.
02/21/2019---Chartist 90% Rule indicator flashed a buy signal and we took a 10% position in the S&P Midcap 400 (MDY) moving the portfolio into a 50% invested position.
04/24/2019---Chartist long term models turned positive and we recommended a 100% invested position.
06/04/2019---Chartist issued a sell signal and reduced the portfolio by 50% leaving the Actual Cash Account in the current position of 50% invested.
06/20/2019---Chartist momentum models turn positive and we advise a 100% invested position.
6/3/19 Special Chartist Hotline, Monday, June 3rd, 3:00 p.m., West Coast Time.
We now advise investors who are acting in sync with our real money accounts to reduce
their equity exposure by approximately 50% by taking the following action:
Sell 100% of the stocks purchased on 4/24/19 from the Actual Cash Account as well as the Aggressive Account.
5/31
The Overbought/Oversold indicator closed at -4.40 which we consider heavily oversold,
but that number got to -9.78 at the lows of the December sell off.
5/30/19
The market is acting accordingly because, as you know, inverted yield curves have preceded all of the recessions that have taken place over the past 60 years. However, the lead time can be anywhere between six months and two years. The yield curve has been inverted since March; however, it has gotten increasingly pronounced over the past month.
Question: How much more downside are you going to allow before cutting the recent losses?
Answer: If we don’t get an almost immediate rally, we could be taking action in the next day or two.
When the S&P 500 set all-time highs on May 23rd, it was the first time it had finished in record high territory since September 20th of last year, a period of 215 days.
Historically, a span of 215 days or more has proven to be a prelude to additional gains.
The table on page 2 tracks the performance of the S&P 500 after all of the times it went at least 215 days between all-time highs going back to 1954.
As you can see, it then proceeded to gain 2.4%, 5.9%, and 13.4% over the next 3, 6, and 12-month periods.
Not one bear market took place over the next 12 months. In fact, the S&P 500 finished higher 14 out of 15 times.
The percentages in the table are without dividends.
When dividends are factored in, the gains over the following 12 months averaged 16.5%.
NUM SYMBOL 5/10 4/23 % 4/23 STOP % > STOP
1 NOW 274.9 243.55 13% 209.99 31%
2 MELI 557.84 500 12% 436.55 28%
3 WP 118.27 113.47 4% 100.39 18%
4 TWLO 134.28 129.27 4% 111.52 20%
5 CMG 705.44 702.46 0% 604.64 17%
6 SHOP 258.83 258.83 0% 194.75 33%
7 SPY 288.1 292.88 -2% NA NA
8 LULU 173.68 176.78 -2% 158.67 9%
9 NFLX 361.04 383.89 -6% 338 7%
10 MRVL 23.51 25.12 -6% 21.6 9%
11 AMD 27.96 29.97 -7% 24.55 14%
12 TQQQ $61.14 66.05 -7% NA NA
13 CTRP 40 43.84 -9% 38.53 4%
14 TTD 183.51 210.73 -13% 178.3 3%
4/25/19
XILINX (XLNX) 122.45
For Trader’s only–please note that Xilinx (XLNX) violated its mental stop today and should be sold.
XLNX
http://schrts.co/CsBdCSvy
The chartist added 15 stocks today.
Below is comparison with TQQQ
with %GAIN since 2/28/19
TQQQ is the winner.
NUM SYMBOL 4/23 % 2/28
1 TQQQ $66.93 31%
2 CTRP 43.84 28%
3 MRVL 25.12 26%
4 AMD 27.97 19%
5 WP 113.47 18%
6 SHOP 223.44 18%
7 LULU 176.78 18%
8 CMG 702.46 16%
9 ANET 321.06 13%
10 XLNX 137.15 9%
11 MELI 500 9%
12 TTD 210.73 7%
13 NFLX 381.89 7%
14 TWLO 129.27 6%
15 SPY 292.88 6%
16 NOW 243.55 2%
17 ROKU 61.53 -7%
SPX PEAK = 2940.91
4/18 But, if the S&P 500 breaks out, we will have no choice but to deploy the remaining 50%.
2/14/19 THE CHARTIST 90% RULE The Chartist 90% Rule, which was one of our proprietary indicators revealed for the first time in the June 5th, 1980 edition of The Chartist, flashed the latest rare buy signal on April 19, 2016. Only ten previous buy signals have been generated since 1970 with the last one taking place on October 13th, 2010. Thus far, all of the previous Chartist 90% buy signals have proven to be successful.
Here’s how it works. Whenever 90% or more of the stocks on the NYSE manage to rise above their respective 50-day moving averages, it is a strong indication that the market has managed to generate enough thrust to continue rising for several more months. As you can see from the chart on page three, 86.71% of the stocks are currently above their 50-day moving average. Note: As you can see by the printout, there have been eleven previous buy signals since 1970, and they were all generated during periods when the market was overbought and appeared to be
vulnerable, which was certainly the case at the time of the recent signal. Again, in reference to the printout, all of the previous Chartist 90% buy signals resulted in gains of 7.7%, 13.4%, and 15.7% by the S&P 500 over the next three, six, and nine months.
Wednesday, January 09, 2019
Special Chartist Hotline, Wednesday, January 9th, 3:00 p.m., West Coast Time.
Our momentum thrust indicator flashed a buy signal today. Investors who are acting in sync with the Actual Cash Account or the Aggressive Account are now advised to buy iShares Russell 2000 (IWM), increasing their equity exposure from 25% to approximately 40%.
Our next regular hotline is scheduled for tomorrow, January 10th, 3:00 p.m., West Coast Time.
CHARTIST HOTLINE
Tuesday, January 08, 2019
The market posted another impressive session with the small and midcaps leading the way. Since the December 24th lows, the Russell 2000 has surged 12.6%. This is reflected in the advance/decline numbers.
Advancing stocks led by close to 3.5:1 on the NYSE in today’s session. This marked the third consecutive day in which advancing stocks led by 2:1 or more and the fifth time in the last six trading sessions. The ten-day moving average of advancers vs. decliners is now up to 1.92.
A reading of 2:1 or more would trigger a momentum buy signal. There is a very strong possibility that it will occur tomorrow. Advancing volume has also been exceptionally strong.
The Chartist momentum indicator has such a great record that we are going to be hard pressed not to increase our exposure.
In the event of a momentum buy signal, we will have a special hotline tomorrow.
Our next regular hotline is scheduled for Thursday, January 10th, 3:00 p.m., West Coast Time.
12/20 The Chartist overbought/oversold indicator closed today at -7.09 which is the greatest oversold reading since August 22, 2011. The one thing missing for some type of effective bottom is the lack of panic selling.
The S&P 500 has fallen 11.6% in the last 12 trading sessions. But the VIX is only up to 28.30. It hit 30.30 intraday.
In comparison, the S&P fell 10% over eight trading sessions last February with the VIX hitting 50.30 intraday. We think it’s going to take a similar reading that vicinity of to reach some type of effective bottom. We’re close, very close.