11/21/16 Comments

I updated watch lists this morning. I am not sure how long it takes for them to appear on the site.
I had a difficult time creating a watch list this weekend. I go through the same process every week to generate watch lists. This time fewer candidates surfaced for me to examine, then, when I did look at the charts I rejected most because the chart patterns looked loose to me or there was another flaw in earnings for example. The election period volatility and viscous rotation did damage to the charts. I also note that the Market School Market Exposure Model (MEM) is still mired in correction at zero portfolio exposure recommendation. The MEM is NASDAQ centric and the rotation mentioned above was away from the leading stocks leading up to the election, these stocks are mostly in the NASDAQ. The S&P500 sold off prior to the election and tagged it 200-day moving average and then strongly rallied up to new highs. How many times have we seen this kind of action before? This time, however, the "FANG" stocks didn't strongly rebound, we rotated into beaten down sectors. If you look at a chart of FB + AAPL + NFLX + GOOGL, it is stuck under the 50-day moving average in what looks to me like a stalling rally.

Putting all of the above together suggests a bit of caution to me. I note that BIIB and BOFI on my short side watch list are trading in a region of logical resistance...