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U.S. Stock futures: Tuesday, Time ≈ 4:14:40 AM Pacific
S&P is up 19.5 points or 0.46%, the Nasdaq 100 Index is up 158.75 points or 1.11%, the Dow is down 5 points or 0.02%, and the E-mini Russell 2000 is up 1.7 points or 0.10%.
U.S. Stock futures: Tuesday, Time ≈ 5:37:33 AM Pacific
S&P is up 24.5 points or 0.58%, the Nasdaq 100 Index is up 199 points or 1.39%, the Dow is down 6 points or 0.02%, and the E-mini Russell 2000 is up 5 points or 0.28%.
Dow (Daily & 10-Minute Intervals)
Click on chart to enlarge it
Moving Averages: 4-day (Blue), 9-day (Green), 18-day (Red), 50-day (Black Dotted)
The horizontal line in the right chart is at the opening value.
The S&P 500, and the Nasdaq
Click on chart to enlarge it
Moving Averages: 4-day (Blue), 9-day (Green), 18-day (Red), 50-day (Black Dotted)
The Commerce Department’s April Personal Consumption Expenditures Price Index (PCE) rose 0.4% on the month, with a 4.4% annual increase, hotter than expected. The core PCE index climbed 0.4% on the month, with a 4.7% annual rise, also above expectations. ~ The 10-year U.S. Treasury yield on Friday rose to 3.83%. ~ West Texas Intermediate futures climbed 1% Friday, lifting WTI futures to almost $73 a barrel. ~ Stocks closed sharply higher on Friday as talks on raising the U.S. debt ceiling progressed. After several rounds of talks, Joe Biden and Kevin McCarthy appeared to be nearing a deal to increase the government’s $31.4 trillion debt limit for two years, while capping spending on most items. ~ The Philadelphia Semiconductor Index jumped 6.3% (its gain in the past two sessions was over 13%). Marvell Technology jumped 32% it said it would double its annual revenue related to AI.
The Dow closed at 33093.34, up 328.69 points or 1.00%, the S&P 500 closed at 4205.45, up 54.17 points or 1.30%, and the Nasdaq Composite Index closed at 12975.68, up 277.59 points or 2.19%. The market will be closed Monday.
The MBI chart’s black line deteriorated a little, but not enough to change trend. It is still basically flat but remains in negative territory with a declining green line. The indication is that the general market still has a negative bias configuration. However, within the general (large-scale status of the market there are currents and counter currents on a much smaller scale. These currents and counter-currents can give insight regarding the evolution of the large-scale status. Breaking out data for the Dow, S&P 500, and Nasdaq Composite Index, we see some interesting data relating to these inner currents and counter-currents. While the Dow surged today, the internals are still have a bearish configuration. The Nasdaq Composite Index has eliminated the single red flag and is now in a bullish configuration. The S&P 500 previously had two flags. One of those has been removed. Also, the probability that the remaining red flag will be removed has increased. These internal measurements are very sensitive and can change quickly.
We estimate that if a stock benchmark is above our estimated bullish target level for more than 30 minutes of the first hour of trading, that benchmark is very likely (80% probability) to close higher. The target value for the Dow is 33,219. The target for the S&P 500 is 4,224. The target for the Nasdaq Composite Index is 13,035. On the other hand, if a stock benchmark is below our estimated bearish target level for more than 30 minutes of the first hour of trading, that benchmark Is very likely (80% probability) to close lower. The target value for the Dow is 32,968. The target for the S&P 500 is 4,187. The target for the Nasdaq Composite Index is 12,916.
Relative to yesterday’s readings, the 4-day moving average has declined, the 9-day moving average has declined, and the 18-day moving average has declined. Regarding the Donchian system, the last signal generated was a “Sell.” The Donchian system continues to have a bearish outlook. Relative to yesterday’s readings, the 20-day average is declining, and the 5-day average is declining. The 5-day moving average closed at 33,000.00. The 20-day moving average closed at 33,350.93. Updated 5/26/23.
Daily Market Bias Indicator (MBI)
When the black line with dots (the indicator line) is above the horizontal blue line, this indicator is telling us that the market has a positive or bullish bias (in the short-term to intermediate-term, even if not in the long-term). If the black dotted line is declining toward the horizontal line, bullish sentiment is decreasing but still present. A negative or bearish bias will be indicated when the black line crosses below the horizontal line.
Assume, that the market has a positive bias (the black line is above zero). If the green line is rising, it is confirming that the environment is supporting bullishness. In this case, long-term and intermediate-term investors who take bearish positions will be in an environment that is working against them.A declining green line in a market with a positive bias means the positive bias is not currently being confirmed … the MBI is detecting counter-currents of negative momentum that are not yet significant enough to change the market’s positive bias status. That means investors may find situations where bearish positions can be taken with somewhat less risk than when the market has a confirmed bullish bias, but because the general environment is bullish, there is still risk in taking bearish positions. Great caution is recommended. Money can be made only on carefully selected bearish positions taken by short-term or intermediate-term investor/traders who know how to trade bearish positions in a market with a positive bias. If the black indicator line crosses below the dark red dashed line, it means that the bearish sentiment is becoming more significant, but since the black line is still above zero, probabilities still favor bullish positioning. In this environment, carefully selected bearish positions are more likely to be profitable than before the black line crossed below the dashed line. From the perspective of an experienced short-term trader, the non-confirmed reading is giving a “go-ahead” for quick bearish trades. Here, the indicator would be giving nuanced information a level deeper than most indicators. If the market has a positive bias, a green line turning down merely means the conditions are not “optimal” for short-term bullish positions. That does not mean they cannot be very profitable if carefully chosen. However, a downturn of the green line in a market with a negative bias is much more problematic for bullish positioning, even for very short-term traders.
Assume, that the market has a negative bias (the black line is below zero). If the green line is declining, it is confirming that the environment is supporting bearishness. In this case, long-term and intermediate-term investors who take bullish positions will be in an environment that is working against them. A rising green line in a market with a negative bias means the negative bias is not currently being confirmed … the MBI is detecting counter-currents of positive momentum that are not yet significant enough to change the market’s negative bias status. That means investors may find situations where bullish positions can be taken with somewhat less risk than when the market has a confirmed bearish bias, but because the general environment is bearish, there is still risk in taking bullish positions. Great caution is recommended. Money can be made only on carefully selected bullish positions taken by short-term or intermediate-term investor/traders who know how to trade bullish positions in a market with a negative bias. If the black indicator line crosses above the dark red dashed line, it means that the bullish sentiment is becoming more significant, but since the black line is still below zero, probabilities still favor bearish positioning. In this environment, carefully selected bullish positions are more likely to be profitable than before the black line crossed above the dashed line. From the perspective of an experienced short-term trader, the non-confirmed reading is giving a “go-ahead” for quick bullish trades. Here, again, the indicator would be giving nuanced information a level deeper than most indicators. In a market with a negative bias, a rising green line is letting an investor know that if they are very careful, there are some opportunities. For example, a setup pattern could offer a good opportunity for a 1-week price surge [a pre-surge “setup” pattern is meant here. For more on these patterns see the bottom half of the Stock Alerts page on this site]. A swing-trader may take such a position to participate in the surge and sell immediately as the surge loses momentum. These trades can enable a person to capture a gain of maybe 3% to 12% and sometimes much more than that (we have captured more than 30% in a single day).
As for the green line, its position above or below either the black Indicator line (or Dashed red line) is not relevant. It is the direction of the green line, not its position, that is relevant.
The dashed red line can be used in combination with the black dotted line as a short-term buy/sell signal generator, but all signals must be confirmed by the green confirmation line. For example, say the black dotted line is below the horizontal line (indicating a negative market bias), and it crosses above the dashed dark-red line. If, at the same time, the green line is rising, then a cross above the red line may be interpreted as a buy signal in a negative environment for a short-term trade. All such signals must be viewed with respect to the prevailing context and the risks implied by the current configurations. Nothing on this Website should be interpreted as a buy or sell recommendation. Our indicators may generate buy or sell signals, but never buy or sell recommendations.
So, what if the Indicator line is above zero (indicating a positive bias), but it has crossed below the broken red line? If the green line is declining, it is confirming that bearish positions can be taken within the bullish environment. However, it must be remembered that risk is higher than if the market has a bearish bias. If the green line is rising, it is not confirming the short-term sell signal created by the Indicator line crossing below the red dashed line. Instead, it is confirming the positive bias indicated by the black indicator line’s position above the zero line.
On the other hand, if the Indicator line is below zero (indicating a negative bias), but it has crossed above the broken red line, simply reverse what was said in the above comments.
The following have had relatively big moves today. These are not recommendations. They should be screened. We post them for those who are interested in stocks that are currently getting attention.
Highest RSI Stocks
The Relative Strength Index (RSI) oscillates between 0 and 100. Look for a divergence in which the security is making a new high, but the RSI is failing to make a new high. This divergence would be an indication of a probable reversal. If the RSI then declines and falls below its most recent trough, it is considered to have completed a failure swing. This would be considered to be a confirmation of a probable reversal. The RSI usually tops above 70 and bottoms below 30. The RSI usually forms these tops and bottoms before the underlying security. However, please be aware that a stock that is very strong can have an RSI that is well above 70 for extended periods. Thus, many short-term traders like to find high RSI stocks in order to “hop on” for a ride.
Also useful to note is when the RSI surpasses a previous peak or falls below a previous trough (low). The RSI sometimes reveals more clearly than a price chart, the location of support and resistance. The formula is RSI = 100-[100/1+(U/D)] Where: U = Average of upward price change, and D = Average of downward price change The RSI should not be confused with our own strength algorithm (used in our Strongest Stocks and Strongest ETFs reports, and in The Valuator). The RSI measures short-term strength over the most recent 14 days. If the following list is not updated within a few hours after the close, look for it early the next morning.
Strong Stocks
This list is generated by our proprietary strength algorithm. The algorithm looks for more persistent patterns of strength rather than the short spurts detected by the RSI. The following list is updated daily. We start with the 1,000 most important stocks traded on U.S. exchanges, rank their strength measurement, and post the top 10. The price shown is not necessarily the closing price.
Use password for access to weekly top 100 (larger database)
The MACD and the CCI
For The Dow (left) and Nasdaq Comp. Index(right)
Click on chart to enlarge it
(What the readings mean for CCI)
The top chart, the MACD (Moving Average Convergence/Divergence) is a popular buy/sell indicator. Here, we present the MACD chart for the Dow (left) and the Nasdaq Composite Index (right). The MACD is the blue line. The “trigger line” is the dotted red line. The basic MACD rule is to sell when the MACD falls below the broken signal line and buy when it rises above its signal line. A crossing of the zero line is a confirmation of the signal. The MACD can give buy/sell indications in three ways: signal line crossovers (the indicator is bullish if it is above its broken signal line and bearish if it is below this line), overbought and oversold conditions (the MACD is in an Overbought/Oversold range when it pulls dramatically away from the broken line; when this occurs, it is likely that the market is overextending and will soon reverse direction), and divergences. Divergences occur, for example, when price makes a new swing high or a new swing low, but the MACD histogram does not, indicating a divergence between price and momentum. Bar Colors: Red = Negative & Down, Purple = Negative & Up, Blue = Positive & Down, Black = Positive & Up.
The lower chart is the CCI. It is based on the Dow (left) and the Nasdaq Compsite Index (right). Traders often check the CCI to see if there is divergence between it and its underlying security. They also look for overbought and oversold conditions. If the Dow is making new highs but the CCI is not, for example, then the Dow is probably heading for a correction or pullback of unknown magnitude. The CCI usually ranges between +100 and -100. If it is above +100, the underlying security is considered to be overbought. If it is below -100, the underlying security is considered to be oversold. However, there is much more nuance to the usefulness of this analytical tool.Learn more.
SETUPS: Increase your odds of making a profit by focusing on “setups,” chart configurations that are most often seen before a price surge. Be sure to wait for the “trigger event.” A “trigger event” is your buy signal, assuming there is not overhead resistance or other contrary indications. For more on setups, go the Q&A page and read item 13. Then use the link at the end of that explanation.
What is PAL?
These Indicator charts will be updated weekly (sometimes more often). If an indicator chart is based on more than one day, it can take several days for the indicator to show much of a change even if the index makes a big move on a single day. Even if an indicator is very sensitive to daily Index changes, it can be helpful to compare the current Index with the posted chart.
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