Below is an update of some key major index’s. Three of the four are breaking resistance!
Interesting to see the NYSE index pushing above resistance prior to the 500 index! If this was a Friday, “Joe Friday” would say, so far the 500 index and NDX have NOT broken resistance…”Just the facts!”
Game Plan…If you consider yourself an aggressive investor, Buy the NDX 100 with a 3% trailing stop. If you consider yourself a moderate to conservative investor, a breakout needs to take place in the NDX before a purchase should be made at these key resistance levels.
Open positions of EEM, EWZ, GDXJ, OIH and SLV continue to far outpace the 500 index of late! Add 5% stops to each of these positions to protect the quality gains that have taken place recently.
Regarding volume. Investors Business Daily puts emphasis on price action + volume. In their estimation a breakout is a large percentage gain in price accompanied by higher volume than the day before. So even though generally speaking volume is lower now than in the past the volume element remains valid in the current market.
Captain,
Interesting comment, but I keep hearing people say things in respect to volume having disppeared in the market and technicians not being believers in certain rallies over the past several months due to low volume. Volume historically valued has been dead for some time. I guess it depends on how much info you want, but for me, keeping things simple is better and being more complicated doesn’t mean to me a certainty of success.
Per Volume…
I value and apprecaite volume and its importance.
In the late 1990’s Sir John Templeton shared his thoughts with me… He thought “AT BEST” this market would go sideways for up to 20 years! He shared that investors would become very frustrated and lose some interest in this business. Having this in my mind, I have focused, right or wrong, more on price movements than volume, due to thinking that we might have less volume due to global investor frustrations.
I totally agree that a breakout with volume is ideal and doesn’t get any better!!!
I second the 1st request from ck – I had set the stop to 111 and got taken out as well.
A stop is a continous / intra-day stop, right?
It’s not an end-of-the day stop?
Thank you,
Olaf
Good point Captain! This may indicate true berakouts 😉
As a CMT, I noticed you don’t talk about volume, but you highlight breakouts. For the sake of your readers, I’d consider volume if your going to recommend stocks/ETFs breaking out as volume has a big impact on the continuity of the pattern/trend.
Hi Chris, wondering about OIH. I got stopped out the day of the recommendation. Might have set it too tight but on Monday it took even a bigger dip below 111 that probably would have taken me out.
cK