Stock Market Early Morning Insights – September 8, 2016

Here are my trading results since June 12 to September 7, 2016 using at $25,000 account.  You don’t need a large account to make money: https://1drv.ms/u/s!AshhTFqIPakDgsI3tm_MfUR9YiGF9A

For those who attended my last webinar series and those who are interested in attending I will hold another series of webinars that teach the techniques that I use beginning in late October.  If you are interested contact me at ron@highgrowthstock.com.

There is more demand than supply since prices continue to rise for the major market indexes. The NASDAQ composite closed at another new high at 85.68% of its daily range. The S&P 400 mid-cap and the S&P 600 small-cap indexes closed even stronger at 99.67% and 98.61% of their daily ranges respectively. Volume was above average for the NASDAQ composite and the S&P 400, and the S&P 600 had higher volume than the previous day.

The NASDAQ chart below shows my interpretation of Wyckoff’s cause-and-effect, and effort and result. I’ve mentioned several times that the NASDAQ was building a cause to move in one direction or the other with this month-long consolidation range. The effect is that it broke out to the upside on heavier volume. Volume is the effort, the close past resistance and at a new high is the result. As I said above, there is more demand than supply or the prices would not be going up.

What does concern me in the NASDAQ composite is that this seems to be somewhat of a narrowly based rally. Internals for the common stock contained in the NASDAQ came in about 1.6 to 1 positive which seems like a narrow rally for an index that is out to new highs. The NASDAQ 100 was negative with only 43 advancers to 63 decliners.

On the other hand, the Russell 2000 was 2.73 to 1 positive, the S&P 600 small-caps were 3.33 to 1 positive, and the S&P 400 mid-cap index was 2.45 to 1 positive. So even though the NASDAQ composite is at new highs, it is not the strongest index. Money is flowing into small and mid-cap stocks. My small-cap institutional index shows 3.04 to 1 advancers over decliners.

Airlines had a very good day yesterday even though only one airline stock showed up in the top 50 GIR. The slices of the stocks and groups moving to the upside give a better snapshot of the strength yesterday. Money was flowing into Airlines, REITs, Biotech, Application Software, Specialty Pharma, and Containers and Packaging. The outflow was in Oil and Gas Services and Equipment, Household Products, Defense Primes, Cruise Lines and Telecom Carriers.

The ETF’s were led by gasoline, transportation, and oil. Precious metal stocks backed off, and the SOX had another weak showing for semiconductors. Homebuilders did well again, as did the Biotechs. The Dollar Index stabilized to close in the upper two thirds of its daily range.

Until we see a change of character for the major market indexes, I remain bullish. 92.44%, or 159 groups have a positive 10/10 VPOC. Only 13 groups are negative which illustrates how much demand is currently overpowering supply.

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