Douglas Busch

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So far Douglas Busch has created 3730 blog entries.
5 Oct 2024

Technology Sector Review: 10/7/24

By |2024-10-05T05:48:56-04:00Saturday|

"Handling" Its Business: The Nasdaq continues to ascend and it feels if as the bears have had ample time to push this lower. Of course, they did with a 4-week losing streak between the weeks ending 7/19-8/9 that slipped 16% from top to bottom of the range. Notice that the week ending 8/9 did record a bullish counterattack candle off the 50 WEEK SMA to give a clear indication that a short-term bottom was in place (and the doji candle the week ending 7/12 should have had bulls shaving partial longs). And the bears gave it yet another shot with the 6% haircut the week ending 9/6, and the bulls put up a strong defense with the very next week gaining it all back and then some. Bears must be feeling irritable at this point. On the daily chart below, one can feel the air coming out the naysayers sails with a nice bounce off the upward-sloping 21-day EMA, and now a handle, hence the "handling" its business reference, has formed on a cup base that commenced with the nasty bearish engulfing candle on 7/11. With everyone talking big round numbers now on the S&P 500 with 6000 targets, why not a 10% move for the Nasdaq into year-end here with a 20000 objective. With sizable gains YTD, as the S&P 500 is higher by more than 20%, October can be volatile, but Q4 overall tends to be very strong as the Almanac Trader shows here.

2 Oct 2024

Technology Sector Review: 10/3/24

By |2024-10-02T20:26:15-04:00Wednesday|

Conflicting Signals:  As we head into Q4 the markets overall are acting well with all 11 major S&P sectors in the green YTD by at least double digits with utilities leading and energy in the basement. Technology has had a mediocre year up 16% right in the middle of the pack via the XLK. The MONTHLY chart of the Nasdaq below has been a head-scratcher. It has felt trendless and the last 3 candles have been debatable. On the WEEKLY chart, one can see last week traded right into the doji candle (well known for their ability to predict changes in the prevailing direction) from the week ending 7/12, the middle candle from a bearish evening star. In my opinion, this type of wide and loose trade is indicative of toppy behavior. Many are speaking to the bullish seasonality and perhaps that will make any meaningful upward trajectory for tech difficult. The daily Nasdaq chart Wednesday filled in a small gap (rare for a benchmark) from the 9/18 session and is retesting the breakout above a symmetrical triangle. I would not be surprised which way this traded over the near term. Keep powder dry for a potential late 2024 election rally.

1 Oct 2024

Industrial Sector Review: 10/2/23

By |2024-10-01T17:02:20-04:00Tuesday|

Buy the Cannons? With the escalation broadening out in the Middle East, is the old stock market adage meaningful? Looking at the WEEKLY chart below of the ITA this has been delivering all year long. Over the last year period, it has declined on a WEEKLY basis in back-to-back weeks just twice, a very strong showing of consistency. The daily chart Tuesday broke above a 150 bull flag pivot which carries a measured move to 160, and one of just a handful of firm overall groups on a weak tape. GE is the top holding at nearly 20% of the fund and has behaved powerfully since the break above a MONTHLY cup base pivot of 142.60 in April in a base 8 years long. Notice during the last 2 years it has declined just 4 months, an extraordinary feat and it has registered a bullish golden cross. The second largest component in RTX broke above a short cup base trigger of 123.80 not long after a push through a bull flag. Less impactful plays with nice technicals include CW which broke above its own bull flag trigger of 330 which carries a measured move to 370.

28 Sep 2024

Consumer Sector Review: 9/30/24

By |2024-09-28T09:06:26-04:00Saturday|

Start Your Engines: The most talked about automobile name on the planet is shifting into overdrive. TSLA rose more than 9% last week, the second time it has done that in the last 3, and it has now nearly doubled in PRICE since the late April lows. That week recorded a bullish piercing line candle and round number theory played a role with a bullish hammer candle off the very round par number the week ending 1/6/23, and the top was a bearish engulfing candle at 300 the week ending 7/21/23. It now looks back in gear as last week inched above a 260 bullish inverse head and shoulders pivot. The MONTHLY chart shows the importance of candles at critical highs and lows with a doji candle in November 2021 which started the symmetrical triangle we now see. A break above here in October would carry a measured move to nearly 600, which could take 2-3 years but for long-term holders, an appetizing target. On the daily chart, one has to admire the tight trade and relatively small trading ranges since the bullish harami cross (doji) on 9/9. A new add-on above a cup base pivot of 271.10 exists and respect that this did not pause much at the upside gap fill from the 7/23 session this week. This should be set for a strong year-end run, although the PRICE path will not be a straight line up. 

27 Sep 2024

THE WEEK AHEAD: Starting 9/3/24

By |2024-09-27T08:22:35-04:00Friday|

"Perhaps the worst will happen, perhaps not, until then, look forward to better things." - Seneca "Value" Showing the Way: It is no secret that on a YTD basis "value" has been outshining growth, and it may gain steam after the earnings miss by NVDA as that will likely need some time to recover. Taking a peak at the ratio chart comparing value to growth via the ratio chart of the VTV to the VUG it shows the former in firm control. This is not a new phenomenon as over the last 6 months this has been happening with a few short hiccups along the way. Peering at the action of the major 11 S&P sectors so far in 2024 it has been dominated by the likes of the financials, utilities, staples, and healthcare. The daily chart below of the S&P 500 shows solid PRICE action with an excellent CLOSE as August is now in the rearview mirror. Additional confirmation of the value over growth theme comes from the S&P 500 over Nasdaq ratio chart too. PRICE which is omnipotent is just below a bull flag pivot, which is not giving up any ground following the recent double-bottom breakout. To balance the very sanguine view, seasonality is not favorable in September (over the last 4 years it has not once CLOSED above where it started with an average loss of almost 6%) and the S&P 500 WEEKLY chart did record the dreadful doji candle last week.