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Kevin Wilde
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Kevin Wilde is the chief trading strategist at alphaking.com and a Marketocracy.com Master. Investors can follow his trading advisories via his Daily AK newsletter, or have their money run for them via Marketocracy.com money management services, where Kevin's trades will be automatically entered.
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AlphaKing.com
  • We Know When The Top Is In, When.... 0 comments
    Mar 15, 2013 5:18 PM | about stocks: AAPL, QQQ, SMH

    The technical picture remains a mixture of solid bull signs countered with some very serious troubling ones, with the stock market seemingly refusing to tip its hand one way or the other, which makes analyzing what comes next a royal chore.

    All I can say is history says we face an important peak sometime between now the end of April, with the rally potentially extending into early May if the NASDAQ 100 (NASDAQ:QQQ) and semiconductor (NYSEARCA:SMH) ETFs are able to breakout to new highs to confirm the rally and force the bears into one last round of capitulation.

    The prime question is which of the rally phases are we in in the chart below, the middle or final? The contrarian indicator at the top of the chart says either could be in play. The bottom trend trading indicator, however, clearly fits the final rally position, tracking both the 1987 and 2007 lines near perfectly. We will know for sure once the white contrarian line leaves those red circles - signaling the rally phase has ended - and we get to see whether the ADX line is rising or falling by the time the white contrarian lines reach oversold levels (green circles.)

    If the ADX is trending south by the time the stock market becomes oversold on the next sell wave then we are likely in the middle rally position, and we would look to buy at that time expecting one final breakout run to unfold going into the summer.

    If the ADX line is trending north by the time the stock market becomes oversold the final rally is likely already complete, and we would look to hold short positions expecting the white dotted line (for shorts) of the trend indicator to race into the yellow circle that represents the big win for the bears that signals the bull market is over, and next Great Bear phase begun.

    Apple is starting to act a lot better, though the Qs and semis have yet to appear like they appreciate the help, and the current rally phase looks toast without those three heading north to scare the bears into covering their short positions.

    Right now the bears are emboldened, and likely to become more aggressive as the days go by without the Qs and SMH looking like they want to rally to join the breakout fun.

    For now, I continue trying to make financial hay on the long side while the investment sun is shining, though looking to aggressively move to cash in the non-too-distant future.

    Have a great weekend!

    Kevin

    (click to enlarge)

    Disclosure: I am long QLD.

    Stocks: AAPL, QQQ, SMH
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