As scary as the ticker tape looked yesterday, I must point out that at least on the weekly chart of the S&P 500, the recent market action is barely noticeable. The uptrend has not been violated, the Stochastics aren't indicating a major selloff (so far), and the high volume on the weekly chart comes mostly from last Friday's quad-witching. Since then, volume has been slightly above-average each day (1 up-close and 3 down-closes), but not like we get when panic takes hold.
There are stocks that are clearly in trouble. Apple (APPL), likely the most widely traded tech stock, is in danger of falling into the lower 90's. The volume pattern shows clear distribution:
But the consumer staple Coca-Cola (KO) couldn't set a 4-day low, and volume was below average:
Historically, the tech-laden NASDAQ Composite starts rising this time of year.
Even the S&P 500 has an upwards bias.
We're just going to have to wait and see if a larger pullback is in store for us. But this is the time of year institutions typically enter new positions and add to existing positions. At some point they will see bargain prices on the quality stocks they have been considering. Strong volume on multiple up-close days may help identify when this process is starting.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
Copyright (C) 2014 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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