Stock Market Early Morning Insights – September 16, 2016

Today is triple witching Friday, but options expiration days are not like they were in the past since the introduction of weekly options. There could be some added volatility, but after the past week, we are used to volatility.

Yesterday was a strong day for the NASDAQ Composite. An Effort to Rise VPA flag was generated as the index closed back in its consolidation area. Volume was above normal as the index closed at 93.51% of its daily range. Advancing stocks led declining stocks by a 2.75 to 1 margin and the Arms Index closed at .6376 which indicates heavy buying in some of the advancing stocks.

The S&P 400 mid-cap and the S&P 600 small-cap indexes also generated strong bullish candles, but volume was less than average on both. The past few days have been primarily a rally in big capitalization tech stocks with Apple leading the way. The most in demand group has been the Semiconductors Devices. Yesterday 63 of the 64 stocks in the group were up. The group itself generated a VPA flag, And Effort to Rise flag.

Semiconductor Devices led the way, as they have so often during this rally off the bottom which began in June. There was also strong support from Specialty Pharma, Biotech, Communication Equipment, and Application Software. Once again, the Top 50 Group Inclusion Report gives us great insight into where the strength was. This is confirmed by the pie charts from the Stocks and Groups Moving to the Upside SmartGroup.

Yesterday, I mentioned three stocks in my report. I hope some of you bought SUPN because it was up 7.2% yesterday. I forgot to enter my buy stop, so I missed the trade. The other two that I mentioned, IRWD was up 3.8%, and WB was up 2.3%. All three are in the Top 50 again, but yesterday was the ideal time to buy these stocks, but they could go much higher. WB is still setting up, and it appears like it wants to go higher. Another stock you may want to look at is CRY, which I bought yesterday. The problem with it is that it is a low volume stock, which can be a good thing if demand overpowers supply.

If you go through The Top 50 Group Inclusion Report you will find more candidates and you can trade; it is my go to list for prospecting and is unique to HGSI. I also prospect from the Stocks and Groups Moving to the Upside SmartGroup which helps keep me on the correct side of group rotation.

Today stock futures are lower along with crude light futures, but they are well off of their morning lows. I expect volatility to continue after what we have seen during the past week. I expect that most traders are nervous about market direction, but the VIX did subside yesterday. Gurus and market timers who have been calling the top are once again disappointed. Since the NASDAQ composite worked its way back into the consolidation area yesterday, I am neutral to bullish on the general direction of the market.

Have a good weekend.

STOCK MARKET EARLY MORNING INSIGHTS

Stock Market Early Morning Insights is a product of Ron Brown Investing. The complete report and all the charts are produced daily before the market opens and distributed by email to subscribers. Reports published on the HGSI Blog are delayed and do not contain all the charts.  For more information about subscribing use this link. MORE INFO