Sunday, October 30, 2016

† Overall Market Conditions:† Extremely Choppy Behavior - Extreme Caution is Warranted

The market staged a moderate rally early Friday even though numerous stocks were getting crushed on earnings news. Then Presidential election news hit the wires and the market dropped quickly, though stocks rebounded slightly by the end of the day.

As noted here previously, I donít think this market will go anywhere until after the Election is over on November 8th or possibly even longer, which is why I remain 80-85% in cash.

TBA = Technical Buy Area

My short term trading oscillator closed Friday at -51 which is an oversold reading. Markets can get oversold and stay oversold for long periods of time and I suspect this might be one of those times.

Stocks are dropping like bricks when they come up short on earnings news like (AMZN) and Amgen (AMGN) did. Stocks that post better than expected earnings and guide higher are moving up, at least for one day and some with multiple up days like NFLX. Overall this market is too wild for any big sustained moves which is why cash is my friend right now.

Now on to an ETF for Biotech stocks that I highlighted here two weeks ago showing a very long term monthly chart.

Now on to an inverse and leveraged Biotech Bear ETF.

I hope to see you in the chat room tomorrow and then back here tomorrow night.

Daniel J. Zanger