Stock Market Update Thursday December 28, 2023 A long time ago, I learned the hard way not to pick tops or bottoms. Especially tops, because they form differently than bottoms. You have many more chances to sell tops than you do bottoms. That is why we developed our algorithms to buy when an oversold condition has been exhausted and sell when an overbought condition has exhausted itself. It is also important to have a stop loss in place; that is why we have our dynamic support/resistance price levels. Knowing when and in what direction to seek setups is the key, and that gives us the edge.
Light volume are a sign of tops but also typical during holiday trading. The Dow Jones Industrial Average is nearly at 38,000, while the S&P 500 sits just 35.28 points shy of a new all-time closing high not the intraday all time high, last reached on January 4, 2022. While an overbought market (meaning the indicator suggests high prices but doesn't guarantee a reversal) or strong bullish/bearish sentiment can be important context, they're not definitive signals to buy or sell. Similarly, negative divergence on technical indicators, where price movement doesn't match the indicator's trend, is a condition suggesting a potential change in direction, not a confirmation of immediate action.
We never short growth stocks, we only buy and accumulate them. Green arrow is when we started buying. Red arrow is when we do not buy or add to our position. We wait until we have a green arrow again i.e. safe to buy or add to our position.
Red Line is our Dynamic Resistance Level for Crude Oil
