Stock Market Early Morning Insights – October 20, 2016

Ron Brown HGSI Insider Club Webinar – Tuesday, October 25, 2016  More Info and Registration

NOTE:  This HGSI Insider Webinar was originally scheduled for Thursday October 20, 2016. Due to presenter illness with the flu the webinar has been rescheduled to Tuesday, October 25, 2016 4:30 PM ET.  If you are already registered for the October 20, 2016 webinar you do not need to re-register for the October 25, 2016 webinar.

The major market indexes have no sense of direction. They remain within their consolidation areas, but much closer to support than resistance. Energy was one of the stronger groups yesterday was oil hitting a multi-month high, but oil is falling back today.

A week ago today I pointed out to a group in San Francisco that Airlines are beginning to emerge. Look at the Airline group in the top 50 GIR and the stocks and groups moving to the upside SmartGroup, you will see that Airlines are the dominant group. In addition to Airlines, Restaurants, Banks and Application Software showed strength. In the one dollar to $15 range, several Exploration and Production and precious metals And Mining stocks appeared.

Earnings season is beginning to accelerate. 81 stocks are due to report today, and the numbers will just continue to grow from here. I prefer to stay away from stocks whose earnings are imminent, because it seems like over the years, I have lost more than I have made by holding through earnings. With longer-term holdings that have a fat profit, it’s not as critical because you have plenty of cushion, but I would never initiate a trade going into earnings. Even with longer-term holdings, you must have an exit point to preserve your profits.

This is a dangerous directionless market, but there are opportunities if you play close attention to group rotation. I mentioned a few of the opportunities above, but one must be disciplined if you’re going to play.

A look at the NASDAQ composite chart shows the spread of the candle is very narrow, and volume is still running below average. This illustrates lack of conviction. Maybe it is the election, but the indexes have done nothing for 2 ½ months.

STOCK MARKET EARLY MORNING INSIGHTS

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