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Dr. Kris
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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Dow Transports Push Higher On Stock Rotation

    Today's strong move by the Transports is buoying the other major averages, most notably the small-cap Russell 2000 (RUT) which is moving back above 1260 resistance. The heightened VWAPs on both the positive and negative sides is a sign of stock rotation out of energy and energy related issues, REITs, and materials, and into consumer discretionary, internet, and software. A rise in bonds today pushed bond funds lower forcing the Long Term Treasury bond etf (NYSEARCA:TLT) to fall under major support at $118.

    On the flip side, the news bode well for banks and investment services. Two bank etfs, the Regional Bank etf (NYSEARCA:KRE)and the Bank etf (NYSEARCA:KBE) both gapped up to hit new yearly highs. Also, the Broker/Dealer etf (NYSEARCA:IAI)bested $44 resistance to reach a seven year high. These groups should continue to outperform in a rising interest rate environment. In currencies, the greenback continues to slide against other currencies. The Bull Dollar etf (NYSEARCA:UUP) is testing $25 minor support; a fall below that would likely send it down to test major support at $24.50.

    1:45 pm ET: Intraday support/resistance:
    SPX 2108/2122
    DTX 840/855.5
    DJIA 18010/18170
    Nasdaq 5085/5115
    RUT 1252.75/1267.25
    VIX 13.4/14.25 (VIX under 15 is overall bullish)
    Trin range: 0.85 - 1.05 (rising Trin is bearish)
    Average VWAPs: +69/-71 (stock rotation)

    Jun 03 2:38 PM | Link | Comment!
  • Transports Continue To Decelerate

    Market Notes (2pm ET): The Dow Transport Index (DTX) continues to buck the trend and could be the anchor that ultimately moors this market. The DTX is on track to close at a seven month low.

    1:40 pm ET: Intraday support/resistance:
    SPX 2104.8/2120.8
    DTX 826.5/836
    DJIA 17965/18135
    Nasdaq 5057.5/5102.5
    RUT 1241.1/1253.9
    VIX 13.15/14.45 (falling VIX is bullish; VIX under 15 is overall bullish)
    Trin range: 0.7 - 1.1 (bullish to neutral)
    Average VWAPs: +94/-47 (bullish)

    May 29 2:06 PM | Link | Comment!
  • Market Notes: Another Move Higher Or Is The Market Ready To Roll-Over?--December 4

    After two decent up days, the market decided to take a rest. While the daily chart of the major averages shows them flat-lining, intraday action was anything but dull. The elevated VWAPs on both the positive and negative sides combined with the large intra-day swing in the VIX reflects today's seesaw action between the bulls and the bears. There are some good and bad points to this market, both on the technical and fundamental sides:

    1. The Dow Transport Index (DTX), a leader in determining market direction, is showing signs of forming a downward trending channel. If the index can't manage to close above today's high (917.7 on my chart; 9177 on other charts), a roll-over in the overall market becomes a higher probability scenario.

    2. Today's Trin (Arm's Index) rose to top out at 1.4 before closing around 1.2. Values above 1.1 are considered bearish while values in the 1.5 or above area are considered to be bearish contrarian. We were near this contrarian level today meaning we could possibly see the market move to the upside tomorrow. Of course, what happens on the open is going to be determined in part by the jobs report due before tomorrow's bell.

    3. The current P/E ratio of the S&P 500 sits at 20. That's 33% above its historical norm. Anyone who believes in the mean-reversion theory should be getting nervous. However, the real question is not if the market will revert back to its historical level it's when will it do so? Remember, the market can remain irrational for longer than you, the investor, can remain solvent.

    So, what's the take-away from all this? My interpretation is that the market is showing us that Wall Street is becoming uneasy with the high market valuation and unless economic indicators continue to show increasing growth (and increasing wages), we could see investors move to the sidelines (which appears to be happening already). The moral of the story is to batten down the hatches and tighten up your stops!

    Dec 04 6:15 PM | Link | Comment!
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