Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

Is it put time by the next fed meeting or earlier, probably.

Dow, S&P and Nas gapped down this morning but rallied strongly on higher volume than yesterday to close near their highs. They all made bullish candles. Nas took out the 10/17 high on slightly less volume. Dow and S&P did not take out the 10/17 highs.

NYSE 5 day arms 5.04 - neutral
Nasdaq 5 days arms 3.26 - bearish

Vix 31.18
VXN 56.93

Ticks -824/+1175, closing tick +907 - the -824 downtick gave us our bottom today, but the high uptick and high closing tick are bearish

Put/Call .75 bullish (that is usually contrarian for me)

A close on the high is usually bullish for the next day (but we are very extended with no apparent reason in tech sector) Technically this means higher highs. Dow and S&P may want to go up and test the 10/17 highs. Nasdaq looks quite overextended.

I do expect a tech pullback and/or entire nasdaq. If you put a Fibonnaci grid across the nasdaq, the next fib is at 1857. Are we going to 'pause to refresh' and then take out higher highs? Not completely convincing because the technical analysis is only part of the picture. There is so much money coming into the market especially the nasdaq simply because lots of money on the sidelines, new traders coming into the fold, and maybe a mixture of patriotism, a desire to get in the bottom (that is funny we are almost at a short term top) yet money keeps flowing into the market. Nothing fundamentally has changed to justify this rising accumulation, so its a bit of a concern to hold full positions on the long side here (especially in companies that have NOT SHOWN their earnings report to be encouraging).

I would and still am focused on nasdaq for the short term (so far about 2-3 weeks) and the fundmentally sound companies like BRL, CTIC, BPRX, MYL, TARO, THOR, FINL, HELE, SLE etc. and a few dozen others as 'buy the dip' or buy the first move above the dip. For nasdaq I rarely take home more than a call position and usually the intraday moves on my favorites are so strong, there is no real temptation to keep holding overnight (i.e. CCMP, NVDA, TECD, CERN, etc)