Seeking Alpha

Kevin Wilde's  Instablog

Kevin Wilde
Send Message
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.
My company:
AlphaKing.com
  • New Short Term Buy Signal For Stocks, Though Fast Approaching A Major Top 0 comments
    Mar 21, 2013 11:41 AM | about stocks: QQQ, SMH

    The QQQs and SMH remain south of their breakout lines, and it is hard to see the stock market rally continuing much further while that remains the case. History of high risk blow-off bull years - which we are currently in - suggests we face an important stock market peak, potential start of the next great bear phase, sometime between now the third week of April.

    If the Qs and SMH breakout the technical action would push the date toward the latter end of that topping scenario, while a failure of those two to join the breakout fun would put the top near current levels and time.

    Per the bull/bear cycle and history of high risk blow-off bull years, we are looking for a signs of a major peak for stocks in the intermediate term, while the chart below of short term trading indicators keeps the door open to another pop to new highs.

    The short term contrarian indicators (top of chart) continue to fall from an overbought condition while the daily ADX has been falling, which was my cue to take profits recently, especially on stocks and ETFs showing signs of distribution selling.

    The speculative/conservative volume line has triggered a new short term buy signal. The yellow circles and arrows highlight past buy signals from that volume based indicator. Speculative/conservative volume buy signals occur when traders panic and sell higher beta stocks while hanging onto, or adding to, more conservative lower beta ones.

    The indicators at the bottom of the chart, VIX and McCellan moving around de-trended Bollinger bands, remain in the waffling middle, suggesting the recent pullback may have more room to run before a more meaningful buy signal lands.

    While next week may be more of the same sideways churn, I believe we are set-up for a continuation of the rally into month's and quarter's end, with the Qs and SMH succeeding on their breakout quest on that next rally surge required to give the bull more room to run beyond the end of the month and quarter.

    Maintaining a high cash level is a pretty good idea at this juncture, so those finding themselves heavy in cash and wondering if they should chase the market higher are best sitting tight to await a better entry opportunity.

    Kevin Wilde, Chief Trading Strategist, Alphaking.com

    If you would like a six month free trial to my alphaking newsletter sign up for the 30 day trial at alphaking.com, click on the verification email, and we will adjust to six months. I run four tracking portfolios - so lots of stocks to buy and sell! - as well as a 401K advisory for those looking to make and protect money in their retirement nest-egg.

    (click to enlarge)

    Disclosure: I am long QLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: market-outlook Stocks: QQQ, SMH
Back To Kevin Wilde's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.