Stock Market Early Morning Insights – March 8, 2016

TECH TALK… This is the 2nd webinar on the HGSI Volume Price Analysis Suite of Indicators. “HGSI VPA Support and Resistance Lines” Wed, Mar 9, 2016 4:30 PM – 5:45 PM EDT  REGISTER HERE

A Volume Price Analysis (VPA) Look at 4 Stocks-March 5th, 2016 by Ron Brown- VIDEO 

Relative Strength Ranking in HGSI by Ron Brown- VIDEO

The small cap stocks are the most bullish stocks in the database. Banking stocks continue to have a strong upward bias, and dominate the S&P 600.

The Health Care and Energy sectors were the strongest sectors yesterday at that level, and oil prices dictate the swings of the intraday S&P futures. This morning is another example because when I began gathering the material for this report crude light was slightly negative, and has suddenly shot up over 1% positive. The S&P E-mini futures have followed oil’s lead. At the low point overnight the E-mini futures were trading at 1980.75, and are currently trading at 1992.75 following oil’s lead.

Yesterday was not a good day for the large-cap tech stocks that every traders focuses upon. Only Tesla was positive in the Canaries index with Netflix leading the way down at -6%. The group as a whole looks like it may be rolling over with money flowing into other sectors such as Energy, and maybe Biotech. The Materials sector is also doing well, and gold futures are at what would be a new closing high if they closed at the 1276 level where they are currently trading.

The Steel group which is currently overbought made further progress yesterday, but once again the VPA indicator Transfer of Ownership suggests that the smart money is selling into the rally. This is an image of US steel which I featuring my weekend video, and you can see that it is clearly overbought with two transfer of ownership VPA signals the past two trading sessions. Cannot continue higher? Of course, but the odds are against it without some more profit-taking in backing and filling. X closed up 120.7% from its 52-week low.

Energy and Precious Metals dominate the stocks in groups moving to the upside smart group, but I am seeing a few Biotech and Specialty Pharma stocks in the list. These are beaten-down groups, and if this market continues higher, this group may provide some opportunities for us. Some of the large-cap biotech stocks which look like they are building a cause to go higher are Biogen, Celgene, Gilead, Ligand, and Regeneron. Intrexon has broken past short-term resistance and has had multiple Pocket Pivots over the past several days. It is up 110% from its 52-week low. The industry group line has turned up for these stocks.

 The beauty of HGSI investor is that we can see the rotation of these groups and stocks when they start to move. I didn’t notice it at the time, but Intrexon Corp. provided some beautiful VPA alerts as the stock was bottoming. The most powerful signals were on January 15th with multiple signals at the very bottom on a sharp reversal day. The symbol is XON.

 Yesterday was choppy but ended on a bullish note after an afternoon selloff in the S&P’s. As I mentioned yesterday, stocks are overbought, but this is not slowed the momentum to the upside other than in the large-cap Canary stocks. I see many more bullish candles than bearish candles, but the SPX is up against resistance around the 2000 area.

 The NASDAQ Composite and the NDX were two of the weaker indexes yesterday, so we may be seeing some rotation out of the tech sectors. The S&P E-mini futures are bouncing around following crude oil’s lead.

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