A Tradewinds Update

Its been quite awhile since my last post. There has not been much to say when the market has been universally in a downward trend. Now we are entering a period where we may be seeing the stabilization or even reversal of the trend.

We have had a nice run/bounce leading up to the election and then got the smack in the head reminder yesterday not to get to giddy.  In reality, the bear push back was completely to be expected. The next few trading sessions are going to be important to see if we can establish a higher-low from what we saw on Oct. 27.  If we do that and then move past the high set on Nov. 4, you can start to feel good about the long side again – cautiously.

TradeWinds for Week Ending September 19

I don't have any unique insight to explain last week's market events, nor any crystal ball as to what the next week will bring. I am a big believer in the momentum indicators that we track, but when the market is gyrating the way it has, its hard to read the charts.

Our indicators say that the market is still in bear territory but we are seeing swing to the upside, in normal times that would be a cautiously optimistic sign to the bull side investors.  Our best sectors still appear to be Housing and Financials, if you can believe it. I am actually liking the second tier banks that have held up well since they have little exposure to the Big Mess, and could very well come out the winners - look at BBT for example. TOL is also looking nice in the housing sector.

The only advice I am going to give this week, is be careful out there.

TradeWinds for September 18th

It has been quite awhile since my last post. I know there are a few faithful fans out there who check the site from time to time. I try to keep the main charts updated each day, but since I never got a the readership I had hoped for I slacked off on the posting. I personally believe in these momentum indicators and watch them faithfully for my own investing purposes. Hopefully some of you have discovered the value as well.

I don’t have any unique insight into the market of the economy. Its hard for any investment system to work when fear is in control of the markets because the patterns that we count own get disrupted by irrational movements. The only good thing that I can say at this point is the obvious that the market is way oversold. Our moderate momentum indicator has dropped below –2.0 (-2.5 for just the major indexes), which is an extreme not normally reached. There should be some kind of bounce here. For that bounce to be sustained we are going to need to have the financial world settle down and get away for the bail out of the day headlines.

I would urge a bit of caution of jumping on the gold and silver bandwagon.  GLD and SLV ETFs still have very negative long term momentum indicators, although improving based on yesterday’s big jump.  Before yesterday GLD was down about 30% from its peak and SLV was down about 50%, so its hard to tell just yet whether this is a panic fueled bounce for these metals or the beginning of a new trend. The duration of the financial turmoil will certainly play a part in this.

I am sitting tight on my holding right now and selling options selectively to raise cash. This crisis will pass like all the others, its just a matter of when.

TradeWinds for Friday August 15th

If anyone is paying attention, they know that I have posted in awhile. As I have said before, without much of an audience out there, the motivation is hard to keep it up. However, I do update the TradeWinds momentum charts everyday and the TradeWinds Top 25 lists and TradeWinds BlackBox. If you have not been following those, you have been missing out on some excellent trend picking.

So where is the market at these days? Certainly the current trend is to the bull side and we think its a solid one. One reason we believe that is because its not just a blind across the board, rising tide lifts all boats kind of rally. Its selective and rotational.

Biotech, pharma and healthcare remain the leaders as we have pointed out for some time. Tech is coming on strong - loving those semiconductors. Housing and financials are rebounding but doing so cautiously. Of energy and commodities is taking it on the chin as part of the rotational pattern. I expect to see a swing back for those sectors to test if we are now in a bear market for those guys.

Our momentum charts are in the neutral zone, but getting stronger. If you look just at the major indexes, their momentum is now is the smooth sailing TradeWinds zone, as are the majority of stocks that we track. We don't publish momentum on the stocks because we are constantly cherry picking those to make sure we have a mix that is in the bull moving sectors.

The strategy is now to buy the pull backs, but with caution. We are approaching the dreaded September-October trading whitewhater. We will be careful to watch if our current upswings peaks just in time to set the take for the early fall plunge.

Happy Trading.

TradeWinds Update

I have been a bit lax on posting, but as always I keep the charts and top 20 lists up to date should you want to follow them yourselves.

After two rollercoaster days, I would say we are in a net positive position, although we still have work to do to get to calm trading waters. Our slow momentum indicator held to the flat to slightly positive tilt during the market gyrations and the number of sectors in negative tradewaters has dropped from 30 to 25 over the past week.

I think what we are seeing is some big sector rotation going on as energy is being unwound as the leader and healthcare (XLV), biotech (BBH), techs (QQQQ, XLK) and even financials (XLF) are getting more attention. This is especially true in the small cap segment of the market (IWM, IYR). My thought is once this rotation is completed we will start seeing some steady upward movement in our momentum charts. Of course this can be disrupted at any moment by a big shock from geopolitical events, oil event, or some banking industry event, so don't get greedy as this scenario unfolds.

TradeWinds for July 21/22

I have been watching the week's rally with much interest to see if will get a firm foundation, and so far that seems to be the case.

Our momentum charts are all pointing in the long direction, but the all important slow momentum, while improving, is still in stormy waters, so the all clear cannot be signaled yet. All 30 out of 40 indexes/ETFs that we track are still in the stormy TradeWinds.

We have been saying that Healthcare (XLV), biotech (BBH) and Pharma (PPH) are the leading sectors for now. The latter has slipped a bit but the other two remain strong. There is improvement across the board with the exception of Oil/legacy energy. China is coming back strong, as are financial stocks. (Be wary of the financial area once the 30 day freeze on naked put selling expires.) Precious metals still confound me, so I am staying away from them.

In summary, market is showing some signs that its has bottomed and is now looking beyond the election and sees the end to the housing/credit crisis. But we all know that Miss Market just loves to play with our heads, so take nothing for granted. Let the momentum indicators tell you if this bounce turns into a trend or is just a correction within the crash.

Rally On.

TradeWinds for July 18th

We finished last week with all of our momentum indexes making nice moves to the long side, but keep you excitement under control.

Our long term or slow momentum index while clearly moving off a bottom is still very much in stormy TradeWinds, so we need to be cautious as this bounce/reversal plays out.  Clearly financials are roaring back to long life, but the question will remain if the rally holds.  Healthcare, pharma and biotech are the clear leaders right now as energy is starting to fade as oil corrects.

If you are a long player, be selective and vigilant to snatch profits until the Miss Market indicates that she is ready to switch partners and go with the Long Waltz.

TradeWinds for July 17th

Finally, the bounce we have been looking for. The next question to be answered will be whether the bounce turns into a trend breaker.

Our momentum charts have all turned up for the first time in a long while, but they are still sailing in very stormy TradeWinds. There are lots of hopeful signs out there for longs, but its hard to make trading decisions on hopeful signs. Be patient, if you choose to do a long trade, snatch your profits early.

As we suggested a couple of days ago, its now clear that oil has topped out for now and is in correction mode, so legacy energy is now a place to stay away from. That gives the sector leadership over to the biotech and healthcare sectors for now (XLV, PPH, BBH). Gold and Silver may be a place to make some money, but I am not sure. There are some resurgent sectors such as China (FXI), consumer staples (XLP) and transports (IYT), but they are still in negative TradeWinds. We would like to see them get into at least neutral waters before getting excited.

Today (Friday) should be an important day to test this bounce. Pre-market is showing some bad numbers because of some of the earnings reports from yesterday. If we are really into a counter trend move, we should see the market shake off these early blues. This doesn't mean an up day, just a strong move off the lows. Remember, its option expiration as well, so that can add to the unpredictability of the day's trading.

TradeWinds for July 15

I am getting more confident about two things. One, we have seen the top for oil. I mentioned some time ago that there has been a divergence between the oil (USO) momentum indicators meaning the price kept making new highs while the momentum indicators were not making new highs. This has actually been going one since about mid-April. I suspect this has gone on longer that it should because of the psychology of oil, but now I think the chickens have come home to roost and its time for a major correction.

Along with a top in oil, I am seeing more evidence of a bottom for the market in general. Certainly a top in oil would probably coincide with a market bottom, but also I think the financial sector has been way oversold and the tech sector is reasonably healthy (see yesterday's results from Intel).

Still nothing to get overly excited about except that the pain is going to ease up. On any given day, however, some geopolitical or economic bombshell could whack the markets, but I think we will start to see a stabilizing of the downward trend setting the stage for an upturn of some degree.

TradeWinds for July 14th

Well I am back from vacation and I see that the markets have not changed much in the last week. Oh sure, fear is rampant, but looking at our momentum indicators, particularly the slow momentum shows a flattening to slight up bias. Don't take that as a cause for any immediate optimism, we are still being buttressed by strong negative TradeWinds. It is starting to feel like we may be seeing the worst of the worst.

Today's pre-market is looking a bit iffy so there may be another wash out day by Miss Market before we can really call a bottom. Volume has been increasing during the recent sell-off which suggests that the pool of sellers may be ready to be exhausted.  Even if we do get a bottom, that does not mean that sunny days are ahead. We should see an oversold bounce at some time, but after that it could just be a flat market in tepid TradeWinds as opposed to a raging rally. Let the momentum charts tell you when we are back in positive TradeWinds.

In the meantime, if you want to trade long, you need to be looking at Biotechs (BBH), Pharm (PPH), Metals (GLD, SLV) and miners (SLW,GDX), and of course Oil (USO).

TradeWinds for July 3rd

Happy 4th of July Weekend to all. To celebrate we fired up the grill for our annual ribfest celebration. Those baby backs were extra yummy this year.

I am now heading on vacation for a week and will not be posting. Not much to say anyway. The market is still not a fun place for the long siders to be. As it was last week, the market is even more oversold. Maybe that means a rally soon, maybe just more pain. I gotta believe its the former, but who knows. So I will take a week off and maybe our indicators will begin to get some new life. I can guarantee you that it will happen some day, picking the right day is the key.

Happy Trading.

TradeWinds for July 1st

Is this a Bear Market Bounce? Or have the sellers become exhausted?

We won't know the answer to that question for awhile, but its fairly certain we will see a bounce here. I think the bounce will be meaningful in that it will be stronger than the other bounces we have had over the last several weeks as we have taken our waterfall ride into the Bear pool. I base this on some nascent trend reversal patterns in the 1 and 2 hour momentum charts. Forecasting from those can be a little tricky because when you think you are seeing clear weather coming you find that you were just in the eye of the hurricane. We will have to watch our daily momentum indicators to tell us if the bounce will turn into a real trend reversal or not.

There is only one non-commodity sector that is making a stealth bull move right now, and that is biotechs (BBH). Also showing improvement, but sill sailing in hostile TradeWinds is pharma, PPH, and healthcare, XLV (do you see the theme?). Take a look at that if you want to play the long side. Techs are stirring a tad, but nothing to get real excited about just yet.

Caution, bordering on fear, is the word of advice for the long players

TradeWinds for June 27th

The only good thing to say about last week, is that it will be hard to get any worse in the weeks ahead.

We have been down four straight weeks and the market is just aching for a oversold bounce. Its started on Thursday and actually continued a bit on Friday.  Although the headlines all focused on the Dow taking another 100+ point hit, the broader market held up pretty well and of the the 85 equities we track, 45 were gainers. Of course, none of that is much to get excited about. Our momentum indicators continue to put us in stormy waters.

We will be watching next week for some evidence that the market wants to put in a bottom in this range. We are also keeping a close eye on oil. Our momentum indicators are telling us the is a divergence that could lead to a correction. In other words, oil (USO) is making new highs while the momentum indicators are weakening and not setting new highs. If we can get some sustained downside momentum going on oil without some political event stirring it up, it could have a see saw effect and fling Miss Market into the air.

Our TradeWinds Black Box had another great week despite the crashing market. We had eight tradeable wins and 4 losses. We outpaced our benchmark SPY, 2.28% to -3.3%. Come to our site and check out this weeks BlackBox picks and Top 25 lists.

TradeWinds for June 26th

It was laundry day for Miss Market, and everything got washed out. For the bull in us lets hope that the last excess of optimism has been wrung out of the market laundry and we can call this a bottom some day.

Miss Market did check the pockets of the laundry for gold, silver and oil before she put everything else through the wringer.

If you are a short trader, go for it, otherwise sit back and watch how the market reacts from here. Our momentum indicators will tell you when things are getting better. And actually the indicators didn't get that clobbered and our moderate momentum actually eeked out a gain based on residual momentum from yesterday. So once again the market is grossly oversold, but when that will make a difference we have yet to see.

Now if you look back at yesterday's post, you will see that I noted the curious behavior of the financial stocks yesterday. They started the day real strong and held their own after the Fed announcement and started to rally again. Then they just collapsed like the air going out of a balloon. First thing this morning we found out why when Goldman Sachs released their market notes on financial stocks, Citicorp in particular, which was one of the catalyst for the market wash out today. Now its obvious to me that sometime yesterday afternoon some big money players found out about the Goldman Sachs report and started dumping big time - maybe Goldman themselves.  No one ever investigates this stuff, but it so blatant. Its one reason why its so hard to make money as a small investor in the market these days.

TradeWinds for June 25th

We are finally getting the long awaited oversold bounce, but the the bigger picture is pretty much unchanged.

Our moderate and fast momentum indicators turned upward today and if we get any kind of follow through tomorrow our slow momentum indicator should do the same. We will still be struggling against some pretty bad negative TradeWinds, so it won't be much to celebrate.

I was real disappointed to see the big sell off in the financials at the end of the day after posting some nice intraday gains. Not sure what that means. Its was either trader action or a bull trap. Tomorrow should give us a better indication.  It was also weird to see the Dow collapse at the end of the day, but the techs, small caps and even OEX and SPY held up pretty good. Curious.

Just like we are getting a long side correction, I also think we are starting a correction in oil, which is long overdue. This may give a little bit of legs to the bounce we are seeing.

So that leaves us pretty much still on the sidelines, although I have liked selling some calls and even took a short position in Oil which I won't hold for more than a few days.

Happy Trading.

TradeWinds for June 23rd

The Bears sure had to love yesterday's action. Every little attempt to rally got sold off.

And now its looks like the small caps and and techs are goings to sink to catch up with the already sunk big caps. Is that a good sign for the hopeful longs?? I don't know. I do know that this market is obsessed by oil and until the fixation breaks it will control how the markets move.  I am also starting to feel that the financials are being beaten down even more because of the fear of the oil bubble bursting and another round of derivative speculation coming down on their collective heads. I have no evidence of that, only my gut.

There is nothing to be excited about in our momentum charts unless you are a Bear. I keep wondering when we are going to get the oversold bounce......

I do know that our Tradewinds Black Box continues to generate some real nice short term trading plays. Yesterday the Box generated 9 winners out of 12 picks, with three of them returning over 4% each yesterday. But nobody is watching so I will just keep these to myself.

TradeWinds for June 20th

We are down to only one argument for the long side of the market and that is it is very over sold at this point. That is not much to go on.

If you are short side investor, the market is playing to your hand right now, particularly in the big caps. The mid and small caps along with some techs are hanging tough although sliding into neutral TradeWinds and heading into negative waters.

I am not much good at short investing as I have found you have to be pretty nimble. For example, financials may look to be fertile territory for a short investor, but they may have just been washed out an at a bottom, so I would stay away from that. The same goes for energy and the long side. I got to believe oil is about to correct, but one headline can change that.

All that said is that it probably a good time to just sit on the sidelines and watch, or do as I will probably do and sell some calls and make a little cash while I wait to see what the market is going to do this summer.

Check out our Top 25 lists and TradeWinds Black Box for some investing ideas on both the long and short side. Our Black Box was a perfect 5-0 last week for picking stocks that made a tradeable move.

TradeWinds for June 19th

Even with all the major indexes moving up today, we still see a split market between the Big Cap indexes and everything else.

The DIA was up .25%, while IWM was up .83% and QQQQ was up 1.56%.  While our Slow Momentum indicator remains in turbulent negative TradeWind waters, under the covers you will find that the small caps and tech stocks are in neutral TradeWinds.

All of our momentum indicators a going flat line, so its kinda hard to predict what is going to happen next. Tomorrow is option expiration day, which can always lead to all sorts of extremes (although sometimes it is just a blah day).  I still sense that the general feeling of the market is that its oversold and resisting any further down moves. If sentiment changes on the big caps, we could see a great leap to the long side.

Looking at the sectors oil and energy are leaders, but there is weakening, so I think there is a correction about to set in there. Agriculture remains strong and biotech is making a stealth surge. Midcaps and small cap are in the neutral category but showing signs of strong base formation, so I would watch them for a thrust to long side during the summer.  Precious metals are also hanging tough in the neutral TradeWinds and even showing some strength of late, I am not convinced if that is just the doom and gloomers keeping it afloat or if there is something more to the move, but its worth keeping an eye on.

Let me add this final editorial comment. I believe that the election in November is going to be one of those times in our history when there is a dramatic shift in the body politic and general thinking of the country. Call it the tipping point theory or whatever, but I think we will find that 2008 goes down with 1860, 1932, 1960 and 1980 as elections that truly shifted the direction of the country. Miss Market is also aware that there is going to be a new man on the block and is trying to position herself for what he will bring.

I you haven't guessed, I do believe that Barrack Obama will be the next President.  The mega big caps are probably not the place to be given that outcome - particularly mega energy companies. Entrepreneurial, innovative small cap companies probably will be in favor, particularly in alternative energy areas. Mega healthcare is probably not a good investment, but again, innovative health technologies or services will be - which could explain the positive movement of the biotechs as of late. 

It should be an interesting six months for politics and investing.

TradeWinds for June 18th

Its pretty hard to make a case for the long side of things right now. If you are long inclined, there are a couple of silver linings to the dark cloud.

Today's action moved our Slow Momentum indicator to the downside after a couple of flat days. Its not a decisive move but discouraging nonetheless. Moderate and Fast momentum still showed long side gains, although weakening. Since we are still sailing in negative TradeWinds and nearly have of our 40 sectors and indexes are negative as well, you have to believe that short is the way to go. I am a die hard long trader so I look for those silver linings and I think you find them if you look at the 6 month charts of the major indexes. Right now, only the DIA and OEX are really looking ugly with the December and March lows looking like they may be in play. Look at QQQQ, IWM, MDY and even SPY and its not that bad. It looks like just a minor correction after the big run off the March lows. While the DIA is off 7.7% from its recovery high off the March low, MDY is down only 3.6%, QQQQ down 5.5% and IWM down 4%. SPY is the worst of this bunch, but looks like its in a good support spot.

This tells me that its the big caps that have been suffering and the broader market still is basically healthy. How long this divergence will hold is another story, but it does mean it not quite time yet to throw in the towel for the Bulls, although caution is certainly the key word, along with staying away from the big caps.

TradeWinds for June 17th

The action this afternoon was not to our liking, but in the end did not do immediate damage to our recovering momentum indicators.

After a couple of nice up days after the Thursday low, its not surprising to see a down day. The techs stood in there pretty good and overall we are still seeing recovery in our indicators and across many of the stocks and ETFs we follow. In fact we saw more strength "under the covers" than we saw reflected in the indexes, so that is a good thing.

Caution is still the overall strategy as our Slow Momentum is still struggling in negative TradeWinds even though it is leveling out. One good day puts us back to neutral, but one bad day ......

Meantime if you have been checking our TradeWinds Top 25 lists and TradeWinds Black Box you are missing out on some mighty fine trade calling.  The Black Box this week is currently is a perfect 5 for 5, and over the last four weeks we are 24 - 8 in picking long side tradable stocks in our Black Box.

TradeWinds for June 13th

We got the bounce and hold that we were looking for in Friday's action. Now we want to see some follow through at the first of the new week.

Friday gave us some encouragement with a strong day and most importantly a strong finish going into the weekend. This had the affect of turning our Fast Momentum indicator to the upside and moderating the down slope of the Moderate and Slow momentum indicators. Since we are way oversold on both the moderate and fast momentum indicators, we could see a nice bounce if we get some follow through long side action.

We had a lot of eroding of our sectors during the week, leaving us with only 8 sectors still in positive TradeWind waters, 14 in neutral and 18 in stormy negative TradeWind waters. So while we are seeing signs of some short term strength, don't get too excited or let you money sit for too long in a long side play because this background strength is still iffy.

Happy Trading

TradeWinds Special Post

As we enter the final three hours of trading for the week, we here at TradeWinds think its going to be a crucial period and we are optimistic.

First, its looks like, at least for the short term, the oil rally has run out of gas. We are seeing a divergence set-up for our Fisher Transform and TSI indicators that tell us the USO has hit a near term peak and will be headed down. Watch the trading action for the rest of the day and if it stays down going into the weekend, you can think of taking a short position next week. This would be a take-the-profits-quickly position because of how oil is tied into the political world. Also don't open that position today - you don't want to wake up Monday morning to see that the US has bombed Iran.

We also like the way the small caps have held in there pretty good through this down draft, a bit better than the big boys. This means folks are still willing to take a bit of risk in the market. Watch the afternoon action closely. If we finish strongly along with oil down, it will be a cause for optimism going into the weekend.

Watch for our weekend update to recap the week and look ahead to the next.

TradeWinds for June 12th

That sinking feeling continued for our momentum indicators, but there are signs that we are nearing at least the short term bottom of this down draft.

Our Slow Momentum Indicator is just barely hanging on to Neutral waters, and barring a huge rally today will like fall into the red after today. The big question now is how long we will remain in the turbulent waters.  We see that our Fast Momentum indicator almost flattened out yesterday and if the pre-market rally holds it will turn up at the end of today. The Moderate Momentum Indicator is WAY oversold, particularly when you look at the major indexes alone.  This all signals a short term rally.

We will watch closely if this downdraft was just a correction of the bull move off the March lows to the May high, or the end of the correction of the bear move from the October highs to the March low. For the bull argument, I am watching for a day when we hold a rally and end near the days highs.

Once again, if you want to play the long side, be a quick hitter until the new trend is clear.

TradeWinds for June 11th

I will be updating the momentum indicators and Top 25 Lists later on today. The commentary to give on those updates is pretty clear before running the numbers.

You have been watching the markets, probably with anxiety if you are on the long side. While there was some indications late last week that the long side would take control again, it succumbed to the surging oil prices. There has been attempts to rally or hold a support levels, but they have been weak. As a consequence, our momentum indicators have run into choppy waters. Its not quite yet stormy, but pretty darn close.

You psychology should now be shifting to being on the sidelines, or going to the short side. If you insist on playing the long side, then do so with the guerilla mentality of striking quickly and getting out quickly. Right now the only sector that has some real momentum going to the long side is the agriculture sector. The oil/energy sector scares me a bit because of its frothiness.

Time to be careful

TradeWinds for June 6th

Okay, I was thinking I was pretty smart when the market zoomed on Friday. I expected a down day on Friday but not what we saw. When I said that this market could move 200 points either way, I really didn't expect what we saw. So where do we go from here?

Our momentum indicators have been damaged with the long or slow momentum falling into the neutral TradeWinds zone. Our moderate and fast momentum indicators turned down but are also in oversold territory. My thinking is that Friday was clearly an excessive reaction to the idea that Israel would attack Iran and the unemployment report, which logically should have been greeted with favor. But mania has taken over the oil market and so long as that has a grip, then its going to be hard to make much long headway on the market in general.

Sit on the sidelines and make plans to go either short or long depending on how things shake out over the next few days is the best advice I can give at this point.

Check out our Top 25 Lists and TradeWinds Black Box for some trading ideas, if you want.

TradeWinds Special Report

Miss Market is just about the most confounding, fickle creature that there is. After yesterday's explosive rally, we get the dreaded countermove that wipes out all of the gains. What is doubly confounding is the headline reasons for the tank.

Unemployment rate surges to 5.5%, highest since 1975; give up any hope of an interest rate hike. That is some of the headlines I have seen. What this, Miss Market goes into a swoon because rates won't go up??? All year long she was just begging for more and more rate cuts. How can we ever please her????

And lets take a closer look at those unemployment numbers. The economists out there said the economy was expected to shed 60,000 jobs this month, but guess what, it only shed 49,000 jobs. Wow, a surprise to the upside, we should be happy that the economy is not losing jobs as fast as feared, right?? But no, no one talks about that, they all focus on the unemployment rate. The unemployment jumped because a bunch of teenagers joined the work force - duh, doesn't everyone know that happens at this time of year. So what is the big surprise in these number?? Where is the bad story for the economy??

I got to figure that there will be a little bit of recovery later in the day as some bargain hunters and buyers from yesterday come to their senses. Overall, this will put us back on the fence watching to see which way the mercurial Miss Market is going to go.

TradeWinds for June 5th

Miss Market finally showed her hand today and right in line with what we have been saying the last couple of days. Yesterday we said this "... this market feels like any day could explode upwards or implode to the bear side. Its a little harder to make the case for bear side when the small and mid caps, along with the techs are hanging tough." And on Tuesday we said this "I think the odds are just as good that we will see a +200 day tomorrow as we might see a -200 day. If you are a gambler, then place your bet on red or black. I will be watching. Basically what I am saying is that we may be at a pivot point as early as tomorrow that either re-ignites our long move or shifts the market into a summer bear move." Pretty right on stuff, I bet some of your are paying for advice that is not as good as this.

Enough of the self-promotion. We were at a pivot point and Miss Market said lets keep going to the long side. That is pretty much the story. We don't try to come up with some wise acre explanation of why the market did this or that, because we know that is just the product of headline writers. We are trying to give some sound information for following the trends of the market.

As with all things with the market we don't celebrate and throw all our money in blindly. It looks good today, but tomorrow is another day. We should expect a little consolidation and then a steady move forward if the trend to the long side has indeed be re-established. We have seen it happen were a +200 day is followed by a -200. Our momentum indicators don't suggest that, but if it happens, we will be back to scratching our head.

So take a look at our Top 25 lists and TradeWinds BlackBox results and begin making you own planning for getting in on the long side.

TradeWinds for June 4th

Miss Market is working the room, looking for someone to take to the dance. Right now she has a fancy for the small caps, mid caps and those dynamic techs. She is shunning the big boys and those financial guys.

I am still befuddled by this bifurcated market, and true to our name I will not ask why. When the trend is not clear, we step aside and just wait to see how things will shake out. Like I said yesterday, this market feels like any day could explode upwards or implode to the bear side. Its a little harder to make the case for bear side when the small and mid caps, along with the techs are hanging tough. You can also throw the transports, biotechs and Japan into that camp. But those big caps are just stinking up the place - the Dow and OEX are in negative TradeWinds waters and the SPY is acting like it wants to join them.

If you add it all up it suggest that we are heading into a range bound period of trading. The problem with that theory is that you usually don't see the volatility that we have had this week in a range bound market. We have been jumping around like popcorn lately.

Maybe we are validating the theory that come may we should just go away from the market. I don't buy that either because this is an election year and I think there will be a lot of maneuvering of money as we go through the year to try and be on the right side of what a new administration will bring in 2009.

So maybe there is a shift of money out of the stodgy big boys and the energy stocks and into the growth world of tech and small and mid caps. That has some sense to it, if you believe we have seen the worst of high energy prices for now. Whatever the reason is, Miss Market is not showing her hand right now, so I still say stick to the sidelines. If you must trade, I think its clear from this post what sectors you should look at.

For some additional trading ideas take a look at our latest Top 25 lists and TradeWinds Black Box.

TradeWinds for June 3rd

Oh Miss Market is back to her fickle, unpredictable ways. Which just may mean the market is ready to change its stripes.

I bet a lot of you were spending your morning much like mine. Doing your job and keeping one eye on the market, or maybe watching the market full time. You felt a little uneasy about yesterday but you knew the market had three good days last week, so you watched the morning action feeling pretty good that the market was doing some consolidating maybe even adding to your gains on some long positions. Then, boom, the bottom fell out for no real good reason that I can think of - come on, it can't be the GM sales figures. And then just when you had that feeling for the millionth time that you would never trade the market again, it catches it self and makes a decent rally off the lows - particularly for the techs and small/midcaps. At the end of the day you are puzzled and confused; go home and drink a lot.

Let's try and put some rational perspective on the day if we can. Our momentum numbers are in bad shape for the longs, no doubt about it. There is still some good news below the surface, but everything is weakening right now. We still have 21 of 40 sector/indexes in positive TradeWinds territory, but that number is shrinking. The big caps are sailing into stormy seas (DIA went negative today), while the small caps and midcaps are holding out pretty good (MDY actually posted a gain today). Techs are holding tough with buyers moving into the QQQQ for second day in a row at its support level. The background macro noise is not all that bad - some good news in home building, oil is in the throes of at least a short term correction, and while some post market headlines blamed the down day on worry over financials, they were only down a fractions for the day.

Its a mixed bag for sure, which says to me its time to sit on the sidelines until Miss Market gets out of this funk and decides what to do. I think the odds are just as good that we will see a +200 day tomorrow as we might see a -200 day. If you are a gambler, then place your bet on red or black. I will be watching. Basically what I am saying is that we may be at a pivot point as early as tomorrow that either re-ignites our long move or shifts the market into a summer bear move.

Sectorwise, the only thing that was real interesting was the continued rebound of the Ag stocks. You will see a bunch of them in our Top 25 Buy Momentum List, along with our number one stock which has appeared on the list for 12 consecutive days, APH.

TradeWinds For June 2nd

Just a short note to express being confounded once again by Miss Market.

It did not surprise me that the market was down today, after all we had a nice three day run coming into today so the odds were in favor of a down day. Just like last week, I was a bit taken aback by the strength of the down draft. We rallied nicely in the last 30 minutes or so which is always a good sign. But I want to extend some caution because the down day moved all of our momentum indicators to the downside. The Fast and Moderate momentum had not built up enough steam to fight off this big of a down move. Also, the DIA moved into negative TradeWinds territory and the SPY moved to neutral. Taken all together I just have to back off on some of my optimism from yesterday. There is still lots to like in the market, particularly in tech, small caps, and strengthening dollar, but I am getting some vibes that we may be in for at best some consolidation - i.e. going sideways, if not a bit of dip. I have misjudged Miss Market before (and will again), but I felt I needed to post this word of caution.

Just follow the TradeWinds for May 30th

Well, last week was a pretty darn good week, particularly if you were in the tech space. And the good thing is, there is no reason to not expect more to come in the coming week.

Our momentum charts are telling us that we just had a nice blowing off of the froth that built up a couple of weeks ago. The Moderate and Fast Momentum dipped hard, recharged and are moving up nicely. At the same time our slow or long term momentum never broke down and continues to sail in the nice smooth water of positive TradeWinds.

We are just a smidgen overbought on the Fast Momentum, only because we have had three strong moves in a row, but in terms of absolute numbers its not in overbought territory, nor is the Moderate Momentum. Therefore, if you are an aggressive trader, you should be buying any weakness this week - assuming there is no news that comes out to change the environment.

Sectorwise, the techs have taken on market leadership, along with small and mid caps. The Dow and OEX were notable laggards last week. Energy is still strong in absolute numbers, but showed some weakening last week, so I would keep an eye on them. Finally the precious metals rally collapsed last week, along with the Euro and bonds - so they are not on my list for now.

To get more detailed trading advice, check out our Top 25 lists and the results from last week's sizzling TradeWinds Black Box.

TradeWinds for May 28th

So far this week has played out in favor of the long side. Miss Market is always a bit coy, so its not a convincing argument that we have withstood last week's down draft, but she is hinting that we have.

The big thing to note on the momentum charts is that the Fast Momentum has bottomed and taken a turn to the long side. That comes after two positive, although not overwhelming days. The good thing to note about today's action is how the market attempt to break down, particularly among the financials, but then staged a nice move to the upside late in the day. That tells me that we have seen the last of the mini-correction. We don't trade on hunches alone, so we want some evidence to support that in the form of our Moderate Momentum indicator hitting bottom and moving to the long side in concert with the Fast Momentum. Let's see if that happens in the next day or two.

We have also seen a bit of slippage in the recent rally by the precious metals, Euro and Bonds. They never got back to a strong TradeWinds position. Keep an eye on that group as we watch to see if they are just regrouping for another long run, or if was a short side correction.

We the slow momentum still strongly in the positive TradeWinds zone, I like our odds of reasserting the move to the long side in the next couple of days.

Now check out our Top 25 Lists and TradeWinds Black Box.

TradeWinds for May 23rd

Friday ended up being one of those days that really confounds me. Its was a down day, going against what I had predicted for the week, so of course I didn't like it. The problem that it gives me is that it did not break the back of the uptrend but rather left it in limbo for another day of trading. All the action was in the first hour and the last hour of the day, while in between it was a tug-o-war between the bulls and the bears. The bears won, but not convincingly.

Our slow or long term momentum is still well within positive TradeWind territory, that's good. But on the bad side, we see it slowly turning down and one major index, DIA, has fallen into the neutral zone. Back on the good side, the Q's held up nicely through out the day ending with only a small loss. Of our 40 sectors and indexes that we track, 25 are still in the positive TradeWind zone, 11 are neutral and 4 are negative. That's good, but on the bad side, the number of neutrals in growing. So all in all its a mixed bag.

We can definitely say that the market is oversold and our fast momentum indicator is reaching to an extreme oversold level, while the moderate momentum indicator is not far behind. Barring some market jarring news, its a safe bet there will be a bounce early in the week. If we are breaking down the uptrend, we should see more big down days by the end of the week. If its a positive week, then then the uptrend can be said to be holding. Hold on to your hats.

Now check out our TradeWinds Top 25 lists and the results of the first 13 weeks of our TradeWinds Black Box.

TradeWinds for May 21st

I am back with a TradeWinds update. I have not been posting as regularly because it is taking a lot of my time. I don't mind doing that because I am doing it mostly for my own benefit. I would like to get more feedback from the readers out there - I know there are few - of what you like or would like to hear more of. Please drop a note - a little positive feedback can go a long way to motivate my posting.

Now I know you have to like some of my recent calls on the market, as we have been spot on the past couple of weeks. Here is what I said on my weekend update, " I kinda of think we will see some more upside early in the week and then some weakness. For you traders, that means look to be taking profits on any open positions and then look for buying opportunities late in the week." Well, after seeing a nice rally on Monday morning, Miss Market has been heading down, down, down. Of course, only half my prediction for the week has come true, we now need to see if there will be buying opportunities in the last couple days of the week.

I have said once before that all trends, long or short, break down at some point when you think they are just testing a support point or working off an over bought/sold condition. Some people call this an inflection point where Miss Market has to make up her mind where to date McLong or McShort. We are certainly at the inflection point and tomorrow will be critical to see who she takes to end of spring dance. Lets look at our indicators.

We still have nice solid TradeWinds momentum on our slow indicator. That means there is still bullish underpinning to the market. The moderate momentum is just starting breakdown and the fast momentum is just about at the oversold point. All of this says we are just working off some bullish excess and all will be fine soon for the longs. If you read back over several of my last posts I have been worrying about the moderate momentum not breaking down and recharging, I think this dip - as sharp as it is, is the price to pay for that. That is healthy and I think we should hold about right where we are at, base a bit and then move up.

I also want to note the curiosity of how the market broke down today. Most of the day we were having a nice consolidation day moving up, then moving down. Then "the news" came in the form of the Fed minutes and all the headlines were about inflation and the fear that the Fed is not going to cut interest rates anymore. Crash goes the market. Now, with food prices rising daily at the grocery store and oil at $132, does anyone in the right mind not know that inflation is a bit of a worry? And with interest being slashed over the last few months, does anyone in their right mind think the Fed is going to cut more? So the Fed says what everyone already knows and the air goes out of the market. I have seen this event happen so many times where the pundits tie the market move to some single event or speech, when in fact the market was technically primed to move in the direction it did. The big money houses didn't just realize that inflation is a problem or interest aren't going down more. Its part of the silly game that is played everyday.

So what to do? Well, I say be cautious until we see that this sell off is indeed done. I have been right often, but I will be wrong as well, so don't take my word for it. Trust, but verify. I actually got suckered a bit myself on the Monday afternoon dip. I thought it was too sudden and deep to be real, so I took some long position expecting to dump them for a quick profits when the expected down turn came. See, I am not perfect.

Now check out our Top 25 lists and TradeWinds Black Box results.

TradeWinds for May 16th

The past week pretty much unfold the way that we had expected it to. It got a little shakey coming down the stretch, but the strength was generally to the long side through out the week.

Looking to the week ahead, its actually kinda of a tough call. The underlying momentum as depicted in out Slow Momentum indicator is still very much in the positive TradeWinds territory. So it is a buy the dips market. The Moderate and Fast momentum indicators, while moving strongly to the upside tell me they will reach a point sometime this week where they need to take another refueling stop. I kinda of think we will see some more upside early in the week and then some weakness. For you traders, that means look to be taking profits on any open positions and then look for buying opportunities late in the week.

By the way, its fun to read all the headlines about how the market is moving against this or that news, or people finally getting on board that this is a market to be playing to the upside. We have know that for many weeks now. And I can assure you that you will hear first when the market is ready to give up its long ways.

From a sector perspective its still a broadbased long side move. Of the forty that we track on 10 are neutral or negative. We are watching with interest the recent movement in the precious metals. They are still in negative TradeWinds zone, but they are rising. We will keep you informed if it looks like its time to play them again to the long side. Right now I am thinking its a false move, given the improving strength of the dollar.

Now check out our Top 25 lists and our TradeWinds Black Box results for last week.

Tradewinds for May 14th

First off, apologies for the lack of posting recently. Its just been busy. Even if I am not posting, I do update the daily momentum graphs and our Top 25 lists, so please check in to see those.

This week has unfolded pretty much as week predicted last week. We saw the bounce coming and the market has delivered. We cautioned to watch for a head fake, and there wasn't one - or was there?

I last saw the market about 2:40 this afternoon. The Dow was up about 150 and the whole market was cruising. All my plays were approaching their profit points, I was thinking of the new car. After my dental appointment, I check how things ended up and saw a complete collapse in the final hour. I hate that - the market collapse and my dental appointment. I our momentum graphs are still in great shape, but there needs to be caution over the next two days as we head into options expiration on Friday. I for one, will lower my profit points unless we see a strong start to trading tomorrow.

Now overall we are still in great shape. Our slow momentum indicators is just cruising in the positive TradeWinds and moderate and fast momentum are rocketing off lows. This should mean a higher market move, but then .....

Check out our Top 25 lists and this week's TradeWinds Black Box results here.

TradeWinds for May 8th

Last week unfolded pretty much the way we thought it would and the way we wanted to see.

We said for some time that our Moderate Momentum indicator was stubbornly overbought and needed to unwind a bit. That has been accomplished as our Fast Momentum indicator has moved to an over sold level while bringing the moderate down, and most importantly, leaving our slow or long term indicator firmly in the positive TradeWinds zone. This sets us up for a bounce sometime in the next few days.

Of course, a bounce to the long side is not a sure thing. Remember every trend ends with a break down of the pattern of the trend. So we are at the point where the long continues by a bounce or breaks down. Be sure the bounce is in place before placing the big bets. And keep an eye out for Mr. Head Fake. He can get you by a fake to the long side and then a breakdown, or a fake to down side followed by a strong rally. You never know, which is what makes this game so fun and maddening. I think the odds are in the favor of a long side move based upon the strength of slow momentum indicator, broadbased movement of sectors and growing oversold condition of the market.

Last week was interesting for our TradeWinds Black Box. Check out the results along with our Top 25 lists.

TradeWinds for May 7th

Its been a busy week away from the blog, so I only have time for a quick post on Wednesday's action. I you have been following our posts lately, you know we were expecting a down turn. I didn't expect as big as of hit that we got, but that is Miss Market for you - ever unpredictable.

This is a healthy downturn as I have also been documenting. Our moderate momentum indicator needed to bleed off some over bought status, which it has begun to do. The next big move will come when the slow and moderate momentum turn up roughly in tandem. That will probably be next week, but then again, I don't make predictions.....

TradeWinds for May 6th

After a day off on Monday, I am back. Our general story remains pretty much the same. The overall market is in a strong uptrend, in the short term we may see some weakness.

Monday was a down day as we suspected, Tuesday was moderately strong. What that meant for our momentum indicators is that the slow momentum remained in nice positive TradeWinds territory, our moderate momentum dipped slightly, which we were happy to see; the fast momentum is jumping again which means it may need another recharge soon.

Here is how I think the next few days play out. Tomorrow should see some follow through to today's action, but there will be resistance to it being a run away day. By Thursday more weakness will enter the market which will bring the moderate and fast momentum indicators down in tandem. This is good because when they regain their footing and move back up it should be a strong move. Of course don't take my word for it, watch the market closely to see if this scenario begins to unfold.

We have seen some positive action in the precious metals in the last few days. If you have the gold itch, I suggest you wait a bit long to see if this move is the beginning of a new bull move for all that glitters, or just a shiny dead cat bouncing. The slow momentum numbers are very unfavorable for gold and silver so be careful.

Now check out our Top 25 Lists and TradeWinds Black Box results.

TradeWinds for May 2nd

Last week was a good week indeed, which solidified the on going rally and puts behinds us all the talk of bear markets. Not only are momentum indexes looking good (still a touch over bought), but I did some review of the longer term - weekly, monthly - momentum indexes and found some very favorable information.

We use the weekly and monthly momentum as part of our scoring algorithm which feeds into our Top 25 rankings. For several weeks now the weekly momentum has turned to the long side virtually across the board of the major indexes. At the conclusion of this past week, we now have the monthly momentum also turning to the long side. The monthly charts are very slow moving and they very rarely whipsaw. When they turn, you can count on them continuing in the direction they are pointing. You can now trade with much confidence to the long side. You should watch our momentum charts closely for those short term over bought adjustments or dips and plan your trades accordingly.

Looking at sectors, technology is taking over the leadership role. In ranking the top indexes and sector ETFs using our scoring system - techs take two of the top five spots. The top 5 are - QQQQ, USO, DIA, MDY and XLK. Oil and four broad based indexes are the leaders. Don't doubt the breadth of this rally.

Now check out the Top 25 lists and TradeWinds Black Box for some trading ideas.

TradeWinds for May 1st

Nice rally today, although it still leaves me a bit concerned for a short term correction.

Looking at our momentum indicators, our fast momentum has bottomed and turned up sharply, which is always a good sign. That coupled with the fact that our slow or long term momentum is just cruising along in positive TradeWinds territory is doubly good. We are still concerned that the moderate momentum never dipped much to reload, but that can happen when there is a real strong bull move and then all the indicators reload at the same time. We will see how this plays out.

The move continues to be pretty broad based with the exception of precious metals and other sectors that are influenced by the strength of the dollar. In other words the dollar is looking poised to get stronger therefore oil, euros and other currencies will be under pressure. The healthcare sectors are coming to life so keep an eye on them since they have been down for the longest. Agriculture also has a question mark as to whether it will get back in its groove or not.

Check out our Top 25 lists and TradeWinds Black Box results.

TradeWinds for April 30th

Today's market pretty much played out like we suspected in yesterday's post. We got the FED rate cut, they signaled that they are going to stop; the market jump and then started selling off. I believe the sell off was not because of any disappointment in the FED move, but rather just the normal cycle of working off the over bought position of the market.

Now our fast momentum has plunged and is reaching for oversold status. But our moderate momentum is still at a high state, particularly if you just look at the major indexes. This worries me because its over due to drop and get recharged. So I think we have little more bleed off to happen and then a nice move to the long side. Exactly when that happens, I can't say, but it should play out over the next few days.

When you check out our Top 25 lists, you will see that there are some sectors and stocks that we think that getting ready to move now so check that out.

TradeWinds for April 29th

I'm back after a day off from blogging. This blogging business is tough. For those that have not tried it, you would be surprised how tough it is. I would love to hear from any you reading this blog of what you like or what you would like to see more of less of. Feel free to jump and give me some feedback.

Lets see what Miss Market is up to. Its no surprise that the week has been kinda of boring as we come up to the FED MEETING (cue the scary music). You can be sure that about 2:15 tomorrow afternoon the market will go nuts. It will swing down and then up or up and then down. It really won't be until the next couple of days that we really know how she feels about the Fed's decision tomorrow.

Conventional wisdom is that the Fed with cut 25 basis points tomorrow. The debate is whether they signal they are done cutting or not. I haven't clue of macro economics yada yada, I can only look at my momentum numbers as my tea leaves and try and find some meaning in them. And true to a good market forecaster, I am going to tell you the picture is mixed. Our moderate momentum indicator is still a touch overbought. Our fast momentum has shed its over bought excess and our slow momentum is cruising in nice strong positive TradeWinds. A mixed picture indeed.

Looking at sectors, we have said for sometime that there is a massive rotation out of commodities and signs of a strengthening dollar. This suggests that rate cutting is at an end. So here is my best guess at what happens tomorrow and the next couple of days. Fed either buts .25 or even surprises by not cutting. If it cuts it says it will now pause. The market will either tank immediately of wait a day, but this down move is to bleed off the over bought state on the moderate momentum. The down move is short lived and then there is sustained move back up due to a way over sold short term momentum indicator and the fact that Miss Market is sailing in positive TradeWinds to begin with. Bottom line, I don't know exactly the scenario for tomorrow, but in the next few days we will be sailing in calm blue seas again.

Now check out our TradeWinds Top 25 lists and TradeWinds Black Box results for today.

TradeWinds for April 25th

Little Miss Market made us sweat a little bit on Friday. The late day surge really saved the week and our momentum numbers.

I was worried that the SPY was not going to be able to claim 139 yet again and set us up for nervous time to start next week. But in the end it pushed through and rested at 139.6 to end the day. Breadth was decent all day and we ended up with 66 winners out of the 85 equities we track. And by the way, I have found that any day where have doubts as to where the after session of the market is going to go, look at the breadth numbers. Almost invariably, the session will follow the leader in winners or losers.

Our momentum charts are telling us that we are set for another run high next week as our Fast Momentum indicator has recharged and is heading higher again. There is one warning sign that I see. Our moderate momentum indicator dropped only a tad and took a turn up on Friday. I would have liked to see more recharge on that indicator than we got, so the next push up may be a short one until we have to consolidate again.

Nearly all boats are rising right now, with only the precious metals and healthcare sectors lagging.

We promised a new feature this weekend and you will find it on our Top 25 Lists page, so check it out.

TradeWinds for April 24th

Today was a most curious day, Miss Market. If I am correct, I think we are about to see a big rotational shift out of commodities and back to tech, financials and growth.

First, let me eat some crow. I said over the last few days to keep an eye on the precious metals as they just may be ready to bounce back. NOT! Precious metals are done for now as far as trends go - now if Dubya decides to bomb Iran or Syria, that another question. If you were gutsy, you could short them, but I wouldn't until we have a new president in place.

Joining the metals as fading sectors is bonds and I think the Euro may not be far behind. Yes, we may have seen the bottom for the dollar. That would also mean a top for oil. I am basing these judgments based on the strength of the down trend in metals and the growing down trend for th Euro. Lets watch what happens over the next few weeks.

Today's actions was rewarding to the longs, but disappointing in how the market faded into the close. I thought for sure this would be the day that SPY would close over 139, but not to be, which means it remains the only major index that has not cracked it nearest major resistance.

Our momentum indicators are in good shape for the long side. Fast momentum is flattening its down move getting ready for the next cycle up. Moderate momentum is shedding some of its over bought state and slow momentum is flat lining in Positive TradeWinds territory.

For more information on specific ETFs and Stocks check out our Top 25 Lists and TradeWinds Black Box.

Also, check in over the weekend as we will be introducing a new feature.

TradeWinds for April 23rd

To the regular readers, I apologize for missing a post last night. Somedays, time just gets away, and in addition I was checking in on the happenings in Pennsylvania. Meanwhile, our friend Miss Market has continued another nice consolidation pattern.

Our charts are almost identical to where we were about a week ago during the last consolidation. Our Fast Momentum is heading down as it works off it short term over bought status and will soon be ready for some buying. The Moderate Momentum is tending down a touch, but it never really got too frothy on the buy side. Our all important Slow Momentum is leveling off but still trending up, and most importantly it is solidly in the positive TradeWinds zone at around 11, where +5 is consider positive. All in all its a good set-up.

Let us not forget that we are still in the middle of earnings reporting, so any day the market or a particular sector or stock can get temporarily whacked by one bad report. So keep an eye to the headlines, but also be watching to buy dips.

Of course, we would like you to check out our Top 25 Lists and TradeWinds Black Box for some of you trading ideas.

TradeWinds for April 21st

Today was a beautiful spring day to go take a dip. Buy the dip in the market that is. I hate to be redundant, but that is the mode we are in right now.

We saw very nice consolidation today and a nice rally into the close. Now we are hitting another short term over bought spot on the Fast Momentum indicator. You can see on the chart how its topping out. That is good. It means that it needs to head back down to regain some fuel to continue to push the Slow Momentum indicator higher.

The movement by the market remains very broad based. The only areas that are lagging are the "defensive" areas of precious metals, bonds and healthcare/pharma.

Wants some trading ideas? Check out our Top 25 lists and TradeWinds Black Box, which got off to a nice start to the new week.

TradeWinds for April 18th

We finished out a strong week on a strong note. All of our momentum indicators are very solid right now, but there is some concern that we are short term overbought again or close to it. But thats okay, that just means there will be another buying-opportunity-dip coming up soon.

DIA and QQQQ ripped through their resistance lines on Friday, SPY cam close. Now we need to see if they can hold above those resistance lines to make them support lines.

Its been funny to read articles this week once again debating whether we have put in a the market low, as though that really matters. The reality is the market is always going to go up and its always going to go down. The key is to find out how to tell when the market is most likely to go in one direction for a period of time that you can invest in. We think our momentum indicators give you real good short term (3-5 day) indications of the buying or selling strength that moves the markets. Let me add my two cents to the bottom debate. Obviously the most recent low was set back mid-March. From a momentum perspective the low was set in at the mid-January low. While the market continued down in price from for two more months, our momentum started rising, creating a divergence which told us when the price move up started we could be confident that it would be sustained. Go back and read our posts from mid-March on to see how we reported this unfolding rally.

In summary we are in sustained rally mode until proven otherwise. Its a broad-based move with only healthcare and pharma stocks lagging. Precious metal are also a little weak, but bear some watching to see if they come back to life.

Now check out our Top 25 Lists and the TradeWinds Black Box results.

TradeWinds for April 17th

After yesterday's big move it was not surprise to see a ho-hum day as the market consolidated its gains. If you are following our advice to buy the dips, well today was the a day to take a dip.

All of our momentum indicators remained strong. With our moderate and fast momentum moving nicely off their dip to push the slow momentum even further into the positive TradeWind zone. Of the 40 ETFs and indexes which comprises our momentum charts only two are in negative TradeWinds - healthcare and pharma - XLV & PPH.

For the time being we should continue to see strength in the market. However, don't get carried away. Remember it is earning season and any one company can take some wild turns. And the good old credit crisis does loom in the background, so that can bite on any day. The momentum indicators are telling us that even if there is a hit the market should be able to absorb it and keep on moving up for now.

Now check out our Top 25 Lists for more trading ideas and latest TradeWinds Black Box results.

TradeWinds for April 16th

I hope some of you took advantage of our call yesterday to buy the dip and made a little money today. I will say it again, this market has positive TradeWinds at its back, and rising, putting us solidly in a buy the dips mode. Watch our Moderate and Fast momentum indicators to tell you when the dip is coming and ending. When you are ready to buy go to our Top 25 long list and buy ETFs or stocks that are new to the list and have a positive (green) or neutral (white) rating. Do your own research to pick the ones that look best for you from that group. Pretty simple.

This rally should last for several days, although don't be surprised to see a little pullback from the big move today, even with Big Blue, IBM reporting nice earnings after hours. This market will now take another shot at taking out it next major resistance markers. For the SPY thats around 139, closed at 136.85; for DIA its around 127.5, closed at 126.64; for QQQQ its around 46, closed today at 45.37. Remember that resistance really comes in a range rather than a fixed number. We need to a move through these numbers and then a hold above before you can say its broken. If its does do that, these indexes could then be in for some major sailing with strong TradeWinds. The way things are setting up, I think it will happen. Stay tuned.

TradeWinds for April 15th

Ok, boys and girls its time to do the Buy-the-Dip dance. Tuesday's action gave us the bounce in our fast momentum indicator that we were looking for. This come along just as our all important slow momentum indicator was drifting downward, but still being pushed along in positive TradeWind territory. With our fast momentum indicator reload and ready to push high, we now will watch for the moderate momentum indicator to reach its bottom and turn higher gives a dual thrust to push us even further into the positive zone.

Now tomorrow you are going to read a lot about Intel's earning that came in after hours as being the catalyst for the market jump. Not so, say I. The momentum was positive all along and short term we had reached oversold, we were primed for a bounce. You might ask, if Intel had reported disappointing earning would that have broken my model. I answer, not necessarily. How many times have you seen a headline company report good or poorly and you think the market will follow that and it doesn't. Then you read all the reporters talking about how the market ignored this or that news. My answer to all of that is that the momentum indicators were set to go one way or the other. Good or bad news only juices the move. The GE news last Friday was a case in point, we were in consolidating mode, working over the overbought momentum, that news just made for a one day sharper move. Then the market caught itself and now the long side is going to reassert its momentum.

Check out our Top 25 lists and TradeWinds Black Box for ideas on what to buy on this dip.

TradeWinds for April 14th

I am a little late making my daily updates as last night was spent working on completing those pesky tax returns.

While taxes are depressing enough, the market is giving very little joy itself. The good news is that there was no big downside follow up to Friday's GE inspired drop in the market. Our fast and moderate momentum indicators as moving well into oversold territory, while our slow momentum indicator remains in the positive TradeWinds territory. Of the forty ETF/Indexes that we track, 36 are either positive or neutral in their moderate momentum rating which is based on the Fisher Transform. Our fundamental long side momentum has not been broken, but we do need to see a snap back in our fast momentum in the next day our so, or we will see some real deteriation of the upside move. Since I read the short term to be oversold, I expect to see that.

Go to our website to check out our Top 25 lists and TradeWinds Black Box results.

TradeWinds for April 11th

Friday was not the kind of day we like to see when we are building a long side argument. The thing that worries me the most about Friday's action is that there was not real effort at a bounce after the morning hit from the GE news. Sometimes one day and one news story can change the whole psychology of the market, time will tell if that is the case here.

On the plus side, out slow momentum indicator remains solidly in the positive TradeWinds zone. We dipped a little but not severely. Fast is definitely oversold now and ready for a bounce and moderate momentum is close to being oversold. Looking at our ETFs and indexes, only one (OEX) slipped from positive momentum to neutral, and we still only have five in the negative zone. We still have good TradeWinds in our favor, but reason to be cautious. Lets see what the new week brings.

Check out our Top 25 Lists and Black Box results for the weeks.

TradeWinds for April 10th

Okay, so this week we have had two days where we had nice moves to the upside only to fade and we had two days with sizable moves to the downside which largely recovered. Thats sure feels like consolidation, and a little indecision as we move through earnings season.

Our momentum indicators are behaving quite nicely if you like the long side. Our all important slow momentum indicator has held up nicely this week and even ticked up today after flattening yesterday. Meanwhile Our fast momentum indicator looks like it has refueled and is ready to move back up while the moderate momentum indicator is drifting down for refueling. A nice snap back by the fast momentum indicator would launch a new leg up. Lets see what happens in the next couple of trading days.

29 of our 40 indexes/ETFs that we track are in positive TradeWinds territory. Only five remain in negative momentum territory.

Now check out our Top 25 lists and TradeWind Black Box results for today.

TradeWinds for Tuesday April 8th

Consolidation and resistance are today's key words.

The market is doing a nice job of consolidating its recent gains as it awaits the soon to be flood of earnings. In so doing its working off it over bought condition as evidenced by the down turn in our moderate and fast momentum indicators which had both got a bit hot. Our slow momentum indicators is sailing nicely in smooth waters with TradeWinds at its back.

This time out is coming just as we hit major resistance points for the major indexes. Look at a chart of the Dow or S&P 500 (I don't have time to publish one tonight). You can easily see that we have risen to the level which served as support for the last run-up to record high last summer which was tested in August and November before being broken in December. Its been tested as resistance a couple of times since and now we need to break through that to continue our next major leg up. To do so our momentum indicators need to reload and then make another assault. Barring major surprises in earnings in the next week or so, which make a good run at breaking that resistance. As I said yesterday, I don't think we would be in positive TradeWinds territory today if the big money thought that this earnings season would be a killer.

We had three more sectors sail into positive TradeWinds territory today - Utilities (XLU), Emerging Markets (EEM) and Brazil (EWZ).

Now check out our Top 25 Lists for today and our TradeWinds Black Box results.

TradeWinds for Monday April 7th

If you read our weekend blog update, you would not have been surprised by the fizzled rally today. We said then that there was probably more consolidation to take place due to the high reading of our fast momentum indicator. Today we got that consolidation and our fast momentum indicator took a dip down on its way to reloading.

The good thing is that while the session did wipe out a 100 point Dow gain, it was a fairly tame session and ended basically flat for the day. Our slow and moderate term momentum indicators just kept on trucking. We are solidly in positive TradeWinds territory across nearly all sectors.

We are now entering into earnings season when some very volatile moves can take place particularly in individual stocks. Our TradeWinds momentum indicators tell us that we are in good shape going into the reporting period. The surging prices tells me that the money that moves the market is not afraid of the earnings that are about to be reported. Because of the increased volatility of the reporting period, this should be a great time to be buying the dips.

Today we say the energy sector (XLE) and consumer discretionary (XLY) enter into the positive TradeWinds zone. Right now we have only five sector in the negative column - SLV, PPH, GDX, GLD and XLV. Those sectors were up over 1 percent on average today - so once again this is a broad based move by the markets.

Check out our TradeWinds Top 25 lists and Black Box results here.

TradeWinds for Friday April 4th

In the event anyone noticed, I apologize for missing the update on Thursday night. I took a brief vacation down to Myrtle Beach with the family.

The markets were did some nice consolidation on Thursday and Friday which solidified our long side momentum. Our slow momentum indicator has now surged above plus five putting us into positive TradeWinds territory. Only five of our 40 indexes and ETFs are in negative territory (SLV, GDX, GLD, PPH, XLV), confirming a broad based rise in the market. What this rise means to your trading is that it is now time to buy dips and let your winners run.

In the near term, I think we will continue to consolidate and even see a little down side. Our fast momentum indicator flattened out indicating it needs to go refuel. Our moderate momentum indicator is getting a little frothy, so be cautious over the next couple of days.

Friday we saw five indexes/ETFs move into positive territory - XLB, COMPX, MDY, SPY, OEX. This puts all major indexes into the positive TradeWind sailing. I saw a headline that said the Nasdaq had its best week since 2006 - that doesn't surprise the readers here, because we called the Techs back in play exactly two weeks ago.

Now check out our Top 25 lists and the past week's Black Box results.

TradeWinds for Wednesday April 2nd

A very mild down day is just what we like to see after a rip roaring day. Those big swings from day to day are being replaced by surge and hold moves to the long side.

Our all important slow momentum indicator is just rocketing right now. It will be in positive TradeWinds in another day or two barring something crazy happening. Our other momentum indicators are fueling the surge upwards. The fast momentum will probably have to refuel here in a day or so, which means we can expect some consolidation before the next leg up.

We had three sectors/indexes sail into positive TradeWinds today - Big Cap techs (QQQQ), Europe/Far East/Australia (EFA), and Oil Services (OIH). Three also moved from negative to neutral TradeWinds - Utilities (XLU), Network (IGN), and Brazil (EWZ).

Now check out our Top 25 Lists and exciting TradeWinds Black Box results.

TradeWinds for Tuesday April 1

Today's market action was no April Fools joke. We are in for the real deal of a long side moving market. I am not calling it bear or bull, all I know is its heading up as a trend.

Now if anyone doubts that we don't know what we are talking about here, read yesterday's post. No one could predict the strength of the move today, but all our signs said that the last few days were just refueling for the next leg up, and today was blast off. I don't have many readers of this blog, so I urge those of you who do check in from time to time to share the love with family and friends that you have found a no nonsense blog that will give you an honest read of market action.

Overall, where do we stand? Our slow momentum indicator is still in the neutral zone but made a sharp move today which tells me are ready to sail out of the neutral winds into the positive TradeWind zone before too long. For the first time in a long time, the slow momentum indicator of just the indexes (which I don't publish right now), is actually out performing the average of the collected ETFs and indexes - a very positive sign. Of the 85 equities we track, 59 are neutral or positive - 69%.

Our sectors with the most positive TradeWinds at their back include, consumer staples (XLP), biotechs (BBH), transportation (IYT), real estate (XHB, IYR), industrials (XLI) and retail (RTH). And by tomorrow you will see the big cap techs joining this group. Now that group does not sound like investors getting ready for a recession or some other financial armagedon that you read about in the mainstream media and blogs. Don't be fooled, now is the time to be buying.

Check out our Top 25 lists and TradeWinds Black Box here.

TradeWinds for Monday March 31st

Another indecisive day, but reading the lines I see some hopeful signs for the long side argument. Our slow and moderate momentum has basically flattened out. Given the volatility that we have seen in recent weeks where the market and our indicators jumped around, this is a good sign that suggests base building to me.

Our fast momentum continued down today, but is definitely in oversold territory now. When that snaps back we should see a general move to the long side in our momentum indicators. Its the beginning of a new quarter and now that the end of quarter window dressing in done by the mutual funds, you may see some signs of money moving into some new areas - like techs.

In the sector watch, we did not pick any new sector into positive TradeWind territory. We did lose one into the negative territory - SLV, which is a reflection of the on-going correction in the precious metals.

TradeWinds for Friday March 28th

Friday's market action was again discouraging, but not fatal to our building long momentum. The day started out good and then just faded as the day went on on moderate volume. A little bunch at the end kept it to a respectable lose.

Our slow momentum indicator has flattened out deep in the neutral zone. A market bound now should make it turn back to the upside. Our fast momentum indicator suggest we may get that bounce soon, as it has quickly moved from short term over bought to over sold, without doing much damage to the moderate and long indicators.

Trading strategies that favor a neutral or trading range market is probably the best way to go for the near terms until Miss Market can carry our slow momentum indicator through the neutral zone into positive TradeWind territory.

No sectors moved into the wind-at-the back TradeWinds zone. Financials (XLF) slipped from neutral into negative TradeWinds, but just barely. You can expect the financials to continue to be volatile as the the whole credit thing is sorted out.

Check out our Top 25 lists and last week's TradeWinds Black Box results.

tradewinds for Thursday, March 27th

Thursday action was a little discouraging, but not disappointing. Its not surprising to see the market down and our momentum indexes pretty much held up nicely. Short term momentum is recharging which is a good sign that we have taken down moderate and slow momentum. What was discouraging was the tech stock action late in the day. It looked like techs were going to shake off the Oracle earning news, but it fell apart late in the day. Now we are faced with tomorrow being a critical day to sustain our momentum indicators.

No new sectors moved out of the neutral zone into the TradeWind zone, but the neutral zone continued to grow as Midcaps (MDY) and agriculture (MOO) joined the crowd.

TradeWinds for Wednesday, March 26th

Tuesday's market was pretty ho-hum. Just what we like to see after a big run up. In fact don't be surprised to see a bit more of this as the market digests its big gains and starts to build some support as the indexes are perched above their 50 day moving averages. This will be very welcome change from the gut wrenching roller coaster of the past weeks.

Our momentum indicators are all looking healthy. Our fast momentum may be getting a touch frothy, so don't be surprised to see a down day in the market to work off some of the excess. For now, the path of least resistance is up, so plan your trades accordingly.

Techs continue to lead the way, however as a sector they are still getting healthy and are not yet in the positive momentum zone. Today we saw four sectors move from neutral to positive TradeWinds - real estate (IYR), Transportation (IYT), Biotechs (BBH) and consumer staples (XLP).

Check out other stocks and ETF's that are moving in our Top 25 Lists and TradeWinds Black Box.

TradeWinds for Tuesday March 25th

I have to admit we are feeling pretty good about our recent calls after today's action. We have been reporting for some time now that we saw the tech stocks getting ready to move. I didn't expect it to happen so soon after our Thursday call, nor with such power, but Miss Market has her ways.

All the major tech indicators moved 3 or more percent today. On top of that, all of the major indexes punched through their 50 day moving averages, another good sign. Our momentum indicators, of course reflect this action. Our slow momentum indicator jumped back into the neutral zone with a reading of -4.05. That is the highest it has been in a while. All the indexes are now pushing the neutral zone on our slow momentum reading. We have been here before, but this time we are a bit stronger and have a big base that has been built since late January. We still need to move out of the neutral zone before we can put away the bear rug and pull out our bull horns. I think we will do it this time, but stay tuned for it to actually happen before placing big bets.

I am not a prognosticator of the economy in general, so the moves we are discussing do not necessarily mean there is or isn't going to be a recession, or that earnings will be good, or inflation is under control etc. We just read aggregated momentum and give a sense of where the market is headed regardless of what all the background noise is about the economy and politics. Its hard enough to read the market, without having to figure out which pundit is lying, or which economic indicator is more important than the next. I believe if you study Miss Market long enough, all the other pieces will fall in place.

Lots of excitement is going on with our TradeWinds Top 25 lists and Black Box, so check them out.

TradeWinds Recent Calls

Time for a little shameless self-promotion - after all this is a blog and I would like to generate some more traffic.

In our note looking ahead to today's market we pointed out how the QQQQ was making a nice base and we felt it was time to get back into tech stocks. I said, "This chart tells me that a strong base has been put in place and that we are ready to make a move to the long side. Tell your family and friends that you heard it here first - tech stocks are back in play." That call was spot on as the market has roared today, being led by the techs as well as the financials. I think we will continue to see the techs take over the market leadership. Financials are going to recover too, but their roads will likely be a bit more rocky.

And speaking of financials. Following the Bear, Stearn deal with JP Morgan, I had this to say, "This moves .... gives time for the market to stablilize and for confidence in Bear to be restored. Once that happens, new buyers for Bear will appear, or JPM will have to raise their bid dramatically....". Well, as you know today, JPM raised their price on Bear from $2 to $10 or 500% - I would call that dramatic.

If you like what you are hearing on this blog, please let me know, and for sure, please refer this site to your friends. Thanks for your readership.

Tradewinds for Monday March 24th

OK, we got the nice bounce back on Thursday that we needed to add some confirmation to the big move on Tuesday. The result is that all of our momentum indicators took a turn up, although for our long term indicator, it was the barest of moves, but still positive.

I have been watching the behavior of the tech stocks for some time, looking for signs that they are ready to resume some market leadership. I think that time is now. Check out of Top 25 Long list and you will see the big techs moving back into play.

Take a look at the chart below for QQQQ (click on the chart for a better view). Our long momentum indicator is based on the True Strength Indicator (TSI). You can see that this indicator bottomed in late January and has been steadily working its way back to zero (-5 to +5 is the neutral zone, over 5 is positive momentum). This chart tells me that a strong base has been put in place and that we are ready to make a move to the long side. Tell your family and friends that you heard it here first - tech stocks are back in play.

TradeWinds for Thursday March 20th

This manic, depressive market is making me, well, depressed. There is really nothing you can do as a trader but to sit back and watch what happens, until such time as Miss Market makes up her minds as to what she wants to do.

Our momentum indicators are being whipsawed, although they are staying slightly to the positive side. Should we ever get a rallying with a confirming rally we will quickly move into good shape with our indicators. But you can't trade on that.

I suspect what may be happening is that there is a lot of cashing in on the commodities to take profits, but also to prepare for a rotation to other sectors once we start getting some first quarter earnings reports. I am also of the belief that a "bottom" is in for now and that there will being growing confidence in the Feds actions to step in strongly in the credit crisis. That coupled with the interest rate cuts will eventually set the stage for a nice rally.

We might be stuck in this rut for a couple more weeks before earnings reports begin. Thats okay, I am going to watch some basketball.

Go Bruins!

TradeWinds for Wednesday, March 19th

Its a good thing that I have been wearing a neck brace as a result of all the wild swings in the market. Today it came in very helpful. If you believe the financial writings of today, yesterday we were on the verge of financial Armageddon. But Bernanke and Paulson came to rescue at the last minute, and today you throw a little rate cut on top of that and you have a lot to celebrate. Up goes the market.

Now I do believe that the whole Bear Sterns affair was very serious and if it was allowed to fall into bankruptcy we would all be a lot poorer today. I think there is a lot to still play out there, but the last couple of days have shown a couple of very positive things for the future. One, the Fed has made it clear its not going to let this credit thing get out of control; and two, interest rates are way down, which only means good news down the road for the market.

If the market is now confident that no matter what else emerges from the sub-prime closet, the Fed is ready to deal with it, as I think it will soon be, then I also believe we are about to be off to the long side race in the market in general.

The boom in the market today turned all our momentum indicators back to the long side and our all important slow momentum indicator is back in neutral waters. Once again, follow through is the thing to watch for here. Some time in the next several trading days we need another thrust upwards to give us the confirmation that we all leaving the market bottom behind. That will be the time to jump big time back into the market.

Check out our Top 25 Lists to see what looking good and bad, along with an update on our TradeWinds Black Box returns.

TradeWinds for Tuesday March 18th

The good news for today was that there was not the feared massive sell-off that was suggested in the pre-market, and in the end the Dow even finished on the plus side. Also, we have seen the market fight off several attempts to send it below its support around the January/March lows. That's another good sign.

Our momentum indicators got pushed down of course. But looking under the covers I see that the market looks to me to be somewhat oversold. If it can shake the credit blues, along with the growing evidence that a bottom is in place, we may see a very nice pop before too long. Now, don't go and bet on that in this environment, because you never know whether another shoe is going to drop. We need to get some nice confirmation of any move upward before doing that.

So the advice is to remain neutral until something definitive happens one way or the other, with my hunch being that it will be to the long side.

Check out our Top 25 lists and our TradeWinds Black Box results for today.

TradeWinds Editorial - Bear Sterns and Government Sponsored Receivership

I believe in the adage that if something is too good to be true, it probably isn't. Could JP Morgan really buy Bear Sterns for $2 a share or something less than $300 million dollars? Give me a break. In their conference call JP executives talked about how satisfied they were with Bears risk management and they saw they business being accretive to income and earnings. On top of all that the fear risk of Bear owns is being covered by the Fed. What a deal, but its a deal I don't expect to go through.

Shareholders are already beginning to smell a rat or an opportunity. They are not going to be inclined to giving away their investment for something like 2 cents on the dollar for many of them, so you are already hearing noise about the shareholders about turning down the deal. Heck, what do they to lose by doing so?

What this whole deal really amounts to is government sponsored receivership. Nobody wanted Bear to go into real bankruptcy. Psychologically that would be a killer to the market and plus they would have to start dumping assets. This moves prevents that and gives time for the market to stablilize and for confidence in Bear to be restored. Once that happens, new buyers for Bear will appear, or JPM will have to raise their bid dramatically, or perhaps Bear will even be able to avoid a takeover all together. The last scenario is not likely, as somehow, JPM needs to be rewarded for doing the Fed's dirty work.

I don't really have a strong opinion for or against the move, I just want this credit crisis to get over with so we can get back to a regular market. If this moves does the trick, it could be seen a a brilliant stroke by Bernake and Paulson. Time will tell.