Stock Market Early Morning Insights – September 21, 2016

Stock Market Early Morning Insights – September 21, 2016


I want to thank Gil Morales for his participation in our webinar yesterday. As usual, Gil provided great insight into how he trades, and how he uses HGSI. We have had many positive comments about the webinar, and if you have not yet had the opportunity to view it, this is the link.

Yesterday was a relatively low volume distribution day for the indexes.

There was not much movement, but the three indexes I track in the report all had strong gap openings, but all closed in the lower portion of their daily trading ranges. The S&P 400 mid-cap index was the weakest, as it closed within 29% of its daily range and engulfed the prior day’s candle. It was a frustrating day for traders chased stocks at the open because more than likely this put them into losing positions at the close.

Once again, much of the strength was in the Healthcare Sector, especially in the Biotech and the Specialty Pharma stocks. Many of the stocks are now overbought and or high risk long side trades. AMPH is a generic pharmaceutical company which was up 11.9% yesterday. It is a Box 7 stock, or a turnaround stock which is had a nice move in the past few days, but it is an example of an extremely risky long side trade at current levels. Volume was 500% times normal, and it was traded so heavily because it was added to the S&P 600 yesterday. Now that the news is out, I will put it in my watch list to see if it backs and fills on light volume over the next several days.

The market still has the Fed hanging over its movement, and the indexes will probably chop around until the FOMC statement is released at 2 PM Eastern time. Either stock that I mentioned yesterday close the day well. Both ATEN and TTMI opened strongly, but closed weekly and look very similar to the indexes.

Even though oil was up yesterday, the Oil Exploration stocks were down. Crude light is trying to rally again today, but is running into resistance and has already given up about 50% of its gains. Stock futures are higher once again, but we saw this same scenario yesterday. This is a choppy market, and it is time to be cautious until we get a better sense of direction.


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