Stock Market Early Morning Insights – October 26, 2016

Stock Market Early Morning Insights – October 26, 2016


I will be conducting a new multi-week webinar educational series right around November 1st and be live trading my money not just be dealing in theory which is what many “educators” due. I am concerned with the right side of the chart, not only with what has happened in the past. I’ll  be putting out a video later this week about what I plan to cover, but as usual, I will be flexible. Contact me directly at if you are interested in attending.  HGSI software is a requirement.

The NASDAQ Composite and the other indexes failed to follow through on Monday’s rally. I pointed out yesterday that Monday’s 1% gain in the Composite was not confirmed by either the internals, a measly 1.5 advancers vs. decliners, or the substandard volume. Generally, I like to see strength internally on strong volume on a strong up day.

The lack of conviction will immediate yesterday with the NASDAQ opening slightly down from Monday’s close, and it drifted down through most of the day closing at only 15.24% of its daily range on below average volume, but higher than Monday’s. Internals were weaker than Monday’s, even though the index only gave back .50% of Monday’s gain. Yesterday was a disappointing day for the bulls, who were counting on a positive day to add to Monday’s gains.

The indexes of the SP 400 mid-caps and the SP 600 small-caps look even worse. The SP600 is getting close to testing what I consider major support of a 1 ½ month trading range. The index only managed to close at 9.67% of its daily range.

This morning futures are under pressure again on AAPL’s anticipated earnings going forward, and a fall in crude oil futures. At least those are the headline events, but there seems to be a malaise about commitment to stocks in either direction based on the indexes, even though they are trading near all-time high.

With yesterday’s pullback, Precious Metal and Mining stocks were up 2.4% as a group, and money flowed into other defensive groups including Gold and Utilities. Semiconductor Devices were mixed after their strong move up on Monday. Educational Services made a strong appearance in the Top 50 GIR with four representatives. EDU was up 9.6%, and out to an all-time high on strong earnings. EDU appeared 3 times in the Top 50 GIR in October prior to yesterday. Application Software. Banks, and Steel Producers continue to show up in the Top 50.

I believe the indexes will continue to bounce around and will remain directionless, but the small and mid-cap indexes are looking more vulnerable to a correction each day.


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