Stock Market Early Morning Insights – Special Weekend Edition – May 21st, 2016

The video shows the state of the market, and a system for HGSI that I am working on for my upcoming webinar series. The video is about 36 minutes long.

The stock indexes continue to frustrate traders. Friday was options expiration day and volume was heavier as expected, but not exceptionally heavy. The internals were strong with advancers leading decliners by about a 3.5 to 1 margin for the NASDAQ composite.

The NASDAQ and the other major stock indexes remain in a trading range, and as I have contended before, will not give us any confirmation of direction until either resistance or support are broken. Last week it seemed as if every advisory service was going short, Goldman Sachs recommended that clients go to cash, and then stocks rallied sharply on Friday. This does not mean that the rally will continue, but with the improved breadth and rotation back into the out of favor Semiconductor Devices and Biotech stocks, it could have legs.

Positive force indexes were generated for the NASDAQ, the S&P 400 and the S&P 600. The volume point of control 10/10 also turned positive, but it has been getting whipsawed like the short-term force indexes. A Kahuna was generated on Ian’s chart.

The top 50 GIR contains four Semiconductor Devices stocks, for Non-Wood Building Materials stocks, five Application Software stocks, and three Biotech stocks. All you need do is look below at the spectrum analyzer graphs to see where the strength and weakness was. These groups do a remarkable job of showing what is moving both up and down.

The SPD are ETF sectors view below gives a great snapshot of strength in the ETF’s and also the groups. Retail managed to bounce up 1.4%, but the biggest gainers were the Semiconductor, Biotech, and Pharmaceuticals, all of which were up over 2%.

If there is a lesson to be learned from all of the talking heads and the gurus, it’s that short-term market predictions are essentially worthless, and you should pay no attention to them. When the indexes break out of their trading ranges and establish a trend, then direction can be established and predictions may have some validity, but trying to pick the direction in this environment is an exercise in futility.

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