EB Digest continued

I have a large number of signals that I use to determine the most likely short-term and long-term stock market direction. However, one of the strongest long-term signals comes from sentiment and I would not want to bet against it. Long-term sentiment doesn't change directions week-to-week or even month-to-month. It tends to reverse over a very long-term period, but when it does, its signals tends to be excellent. ... keep reading

SquareSpace Inc. (SQSP) has been in a fairly narrow trading range since gapping down in early September. Support has been very consistent near the 27.50 level, while each rally stalls once it trades into its gap resistance zone. I do like the improving odds that SQSP is going to make a breakout stick fairly soon, though. Check out the AD line on this chart: ... keep reading

In recent weeks, I've been discussing a few stocks from our popular Short Squeeze ChartList (SSCL). The SSCL is one ChartList that we update twice a month for our members. It's an organized list of the stocks with the highest short percentages of float. On heavy volume advances, these stocks can see significant imbalances between supply and demand and, as a result, short-term inefficiencies in pricing. I first discussed TG Therapeutics (TGTX) when it cleared 11.88 closing price resistance. On Tuesday, TGTX closed at 18.81, resulting in a 57% gain since closing at 12.07 on November 17th (5 weeks ago). And TGTX still hasn't seen one day where short sellers appear to be panic buying. Also, in the latest Short Squeeze list, TGTX remains with a short % of float at 26.14%, only slightly beneath where it was one month ago. This one could really get exciting should the ascent continue. But today, let's look at Wayfair, Inc. (W) as another short squeeze candidate: ... keep reading

Exelon Corp (EXC) received bad news this week when Illinois regulators rejected EXC's updated grid plan and rate hike. While the news was bad, the action on the chart was worse. Volume exploded higher, but unfortunately it accompanied a price support breakdown, opening the door to deeper losses ahead. Below is a 10-year weekly chart for EXC and you can see first that the weekly PPO has taking a big hit and shows accelerating downside momentum. ... keep reading

Anyone who's followed me for awhile knows how important relative strength is to me as a trader. I want to own stocks that lead their industry groups higher. And it always helps if the industry is leading the S&P 500 higher as well. Leading stocks in leading industry groups, that's what we're looking for. Well, sometimes the start of relative strength is not clearly visible. Let's take the semiconductors ($DJUSSC), for instance. This group has arguably been amongst the best industry groups of 2023, but it's taking a very well-deserved pause right now. It's hard to see, but there are semiconductor stocks starting to show relative strength, but it's not really clear, because the group has been weak. ... keep reading

There have been three sectors that have outperformed the S&P 500 over the past three months and they are: technology (XLK), consumer discretionary (XLY), and communication services (XLC). These three sectors represent 26.01%, 10.09%, and 8.11%, respectively, of the S&P 500. That TOTALS 44.21% of the S&P 500. One of the best-performing ETFs has been the VanEck Vectors Morningstar Wide Moat ETF (MOAT): ... keep reading

Let me first begin this discussion by saying that sentiment does a MUCH BETTER job at marking market bottoms than it does market tops. And remember, sentiment is just one piece of the market puzzle and we need to look beyond sentiment to other corroborating factors before growing more optimistic (market bottom) or pessimistic (market top). ... keep reading

It's not at all unusual for a stock to stumble upon a key gap support or gap resistance level, but in the case of Carmax, Inc. (KMX), there's one of each. In what may have been the worst trading day ever for KMX on September 29, 2022, the stock gapped down significantly and then proceeded to drop all day long, resulting in the loss of 25% of its market cap in just one session. As you might expect, the volume that day was monstrous - the 2nd highest daily volume since 2010. Two weeks ago, KMX climbed all the way back up to test that gap resistance at 86.42: ... keep reading

Most traders are overly concerned about winning with every trade, rather than setting up clear reward-to-risk strategies that reward consistency. It's similar to the story about the tortoise and the hare. Sure, it's great to win on every trade as your trading account would obviously balloon. But, sometimes, that desire to win on every trade clouds the ability to sell stocks that simply aren't working. I've always said that you should know your target and exit plan for every trade - before you place it! I think American Express (AXP) is a stock that sets up really well right now from a reward to risk approach: ... keep reading

I can look at nearly any stock and come up with a quick reason why I should buy it or short it. But it's much more important to find MULTIPLE reasons to support your position. Advanced Micro Devices (AMD) is a leading stock in the semiconductor space ($DJUSSC) and buying just about any stock in semiconductors has made sense in 2023. Right now, however, I can make several arguments why I might want to sell AMD. There are a couple of obvious reasons to want to sell AMD, but let's first take a look at what the chart's telling us: ... keep reading