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State of Current Market. Current Rally – Problem Ridden Market Tops Analysis Extremely Negative Narrow Participation Where is the volume? Low Volume and.

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Presentation on theme: "State of Current Market. Current Rally – Problem Ridden Market Tops Analysis Extremely Negative Narrow Participation Where is the volume? Low Volume and."— Presentation transcript:

1 State of Current Market

2 Current Rally – Problem Ridden Market Tops Analysis Extremely Negative Narrow Participation Where is the volume? Low Volume and RS Setups Low Volume Breakouts Strong Breakouts, Failed to Follow Through, or ran out of gas (low volume)…Many Late Stage Breakouts Failed Almost Immediately Climactic Action (mini-climax, Violations of Upper Trendlines, etc…)

3 TRAP THERE IS NO EXCEPTION FOR A LOW VOLUME BREAKOUT ON SHORT/HOLIDAY WEEKS!!!! (9 out of 10 Will Pullback)

4 Low Volume attempt back above Trendline Higherst Volume in Entire move with largest point and % Spread in entire move Violation of Upper Trendline Multiple Breakouts Already

5 Largest Point Spread & % Move of entire run

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7 Sudden Burst on Volume after low volume = mini climax, generally followed by corrective action Where’s the volume?

8 NOTICE HOW STOCKS BEGINS PULLBACKS AFTER BIG GAP UPS Use Stocks History to determine profit taking…

9 Short Term Outlook Expect a pullback/correction over the next week or two at a minimum Tradeable Rally to Develop Possibly in the next 4 – 5+ weeks – Assuming leadership holds up and/or new leadership emerges – A/D Line has not topped (Typically tops ahead of bear market) – Might not be enough Complacency (but getting there) –Not Enough Short Setups

10 Signs of a Potential Tradeable Rally High Quality Setups –Strong Technical's (volume, shape) & Fundamentals Strong Early Breakouts or MA Bounces –Do Not Fail Immediately –Powerful Volume (exception MA bounces) More Quality Setups Developing –Ready over the next month

11 APOL Triples, very volatile, difficult to hold Doubles, Much Easier to Hold

12 Types of Bull Markets Secular – Years Cyclical – 12 – 24 Months Tradeable Rally – 2 – 6 Months

13 Secular Bull Market Runs 3+ Years (can be multi- decade… ) Contains Multiple Cyclical Bull and Bear Markets Major Sector's) and Theme's) Emerge (i.e. Technology, Commodities, Emerging Markets, etc…) –Broad Participation

14 Cyclical Bull Market Average Length 12 – 24 Months Contains Multiple Tradeable Rallies and Corrections New Stocks and Industry Groups (i.e. within Broad Sector Themes Assert Leadership (very rare few groups/stocks run from one cyclical bull to the next, generally will sit one out, and participate in the next)

15 Tradeable Rally Generally lasts 2 – 4 Months Leadership can be narrow (especially in bear market rallies and end of cyclical/secular bull markets)

16 Very Common Bottoming Pattern

17 Market Precedent Bubble Hangover Weak Economy International Turmoil Political Uncertainty

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22 OTHER TOPICS Psychology Shorting Identifying The Big Winners Leaders & Laggards Holding Rules –Earnings –Big Move Secondary Buy Points Secondary Bases FT Days Distribution Days Market Tops & Bottoms –Offensive and Defensive Sell Signals

23 QUESTIONS?

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