Throughout days of incredible highs and lows, the markets have managed to end up just about where they started at the beginning of this year. Nevertheless, the volatility has created some tremendous opportunities to make money in the markets—and we can never be sorry about that!
Wall Street’s Best Dividend Stocks 315
Larger stocks led this week’s comeback with growth stocks picking up the most interest. Our FAANG Index bounced off its low, however I am still expecting a long recovery time for these stocks. For the market as a whole we have completed a second W Bottom in Bollinger Bands terms and both are quite well confirmed. We strongly feel that the correction is over and that we are in a recovery period. Confirming that opinion was a Breadth Thrust reversal completed last week. We now expect to see better prices for stocks well into next year. Those of you that have followed our work on Three Pushes to a High in Bollinger Band terms, will recognize that the two Ws with a low in common that we have seen in the wake of this correction constitute a Three Pushes to a Low reversal pattern. The fly in the ointment for the market is the still strong number of new lows, which I do not think will contract until after tax selling season is over; think opportunities for The Bounce.
John Bollinger, The Bollinger Band Letter, www.bollingerbands.com, 310-798-8855, December 1, 2018
Take Some Profits
The Dow again surprised us with its big drop last week. We thought it was going to move up. Hopefully, it is making a “Head & Shoulders” reversal and is in the process of forming the last shoulder, and will move up from here. If it doesn’t, and closes below 24,000, then we could be headed for another substantial correction, and we would be selling and stepping to the sidelines. Regardless, we would be taking some profits on stocks selling at the high end of their historic trading range.
Joseph Cotton, Cotton’s Technically Speaking, www.cottonstocks.net, 727-289-4436, December 10, 2018
Technically, the market has returned to an oversold condition that could support another recovery attempt. Volatility continues to be fueled by political and economic events. If support established in October is not violated significantly, the market is positioned to benefit from a seasonally strong period of the year.
Currently, the Top Ten Consensus is Bearish with 2 Bulls, 7 Bears, and 1 Neutral.
Timer Digest, P.O. Box 1688, Greenwich, CT. 06836-1688, (203) 629-3503, December 10, 2018
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The next Wall Street’s Best Dividend Stocks issue will be published on January 9, 2019