There are not a lot of opportunities available right now because of the big sell-off in markets over the last few weeks. By opportunities I mean large players volume, pocket pivots, Twiggs Money Flow, and buy-side volume studies.
Basically we are looking for stocks with catalysts that have caused a lot of other traders to step in and buy.
Worse, a lot of biotech stocks have pulled back on releasing PRs and clinical trial data updates because of the poor market action over the last few weeks.
We have a buy signal on the S&P 500 in the 1-hour time frame with 13 hour MA crossing above the 30 hour MA but we don’t have any stocks to buy.
I’ve even screened all companies with major news on Friday, December 28, 2018, and then ran those companies through some of the volume screeners mentioned above and very few people are buying anything right now.
I’ve been watching Amazon stock as a leading indicator. Notice the Bullish Ladder Bottom that formed in AMZN stock last week (yellow square).
If Amazon stock continues to go higher, so will the entire market; however, notice the doji candlestick on Friday, December 28, 2018. That doesn’t instill a lot of confidence in Bulls that it’s going higher.
What does it mean?
No one wants to be the first to jump head-first into this market as we enter into 2019 next week. Everybody is looking at everyone else and waiting to see what they do first. But really, there’s only two groups of traders that we care about and that is institutional traders and money managers.
No worries. Institutional traders and money managers will jump first because they have other peoples money to invest and they have to invest that money to comply with prospectuses. In other words, legally, they have to take positions so no worries about who is going to jump first.
You and I have a great advantage over institutional traders and money managers in that we can move quickly into anything we want including cash. Don’t be in a rush to jump out of cash. Let’s see how the futures market starts trading tonight and let’s let other traders jump first.