MACD-H and Force Index Semiautomatic Divergence Scans is shared with participants of the webinar in which Dr. Elder discussed the Divergence scans spreadsheet. If you would like to start receiving them in real time - on Sunday, looking for opportunities in the week ahead - please join Dr Elder’s private webinars, for which these scans are a free bonus. For more information please click here.
Dear Webinar Participant,
First of all, a reminder: tomorrow, Monday, January 16, the US markets will be closed in observance of Martin Luther King day. We’ll have a four-day trading week.
Last weekend I wrote to you: "We are still in a bear market, but the rally that began last week is likely to continue.” The market vacillated on Monday and Tuesday but rallied strongly for the rest of the week, closing at a new high for this year on Friday. In my review of the S&P500 component stocks last weekend, six bullish picks were marked attractive, and all worked out, some of then spectacularly so. Five bearish picks were marked attractive; one didn’t trigger, two worked out, and two failed. This weekend, looking at the Impulse system on the monthly and weekly charts of the key international markets and US sectors (shown above), we see an increase in bullishness. The weekly charts of the international markets have reached an overbought level: 13 out of 14 are green. Last time we saw such reading was in November-December 2020, as the market was topping out before it slid into its pandemic bear market. The monthly charts were also overbought at that time, all 14 were green. This weekend’s automatic scans of the S&P500 component stocks have the following numbers of bullish vs bearish finds: * MACD-Histogram divergences, weekly 10 : 15 (last weekend 18 : 9). Changed from slightly bullish to slightly bearish. * Force Index extremes, weekly 4 : 23 (last weekend 7 : 9). Turned bearish. * MACD-Histogram divergences, daily 8 : 76 (last weekend 9 : 69). Slightly more bearish than last weekend. Last weekend I commented: "It tends to be an early advanced warning of a coming trend change, not a suggestion for immediate action.” Now that “early warning” is getting louder, and Force Index scan has also moved into the bearish camp. The bear market hasn’t been cancelled, but the rally remains alive. I expect to see a new high this week; tops take longer to form than bottoms. I anticipate to see an increase in volatility, and this is reflected in my visual review of automatic scans: considerably fewer bullish picks appear attractive today. A very important reminder: we are entering the quarterly earnings season. Before buying or shorting any stock, check the date of its earnings report. Avoid opening a position in a stock before its earnings report. Consider exiting an existing position before such report. Earnings report can push a stock violently up or down; just look at what happened to several major banking stocks on Friday, after their earnings came out before market opened. A very good site for checking earnings dates is http://earningswhispers.com I look forward to seeing you at our webinar on Wednesday - send me your questions. Apologies for last week’s cancellation and rescheduling - the first time it happened in many years. Our January webinars will be on the 18th and 25th. Best wishes for the week ahead,
Dr Alexander Elder