All of the U.S. indices are back above the 200d moving average, with a bullish trend report from Investors Business Daily. This transition back above the long-term 200d moving average signals a noteworthy change of character and reinforces a potential change of trend.
- NYSE Composite moved above the 200d in early November 2022.
- Dow Jones Industrials transitioned back above the 200d in late October 2022.
- S&P500 started the week above the 200d. Week 4 January 23, 2023.
- QQQ, NDX, and COMPQ moved above the 200d this week on Thursday 26 January 2023.
- International Indices and ETFs broke bearish trends before the U.S. markets.
Investors Business Daily – Market Trend
Note how paying attention to the change of trend in early 2022 would have kept your assets safe. Now that the trend is changing we can start thinking of putting cash back to work. It’s still early, so we’ll proceed cautiously. Once the 200d turns up we’ll have a new trend confirmed.
We always pay attention to the general direction of the stock market as it affects individual stocks in the same way a rising or receding tide raises or lowers all boats. We need to understand the market’s impact on our stocks so we know whether it’s time to set sail or abandon ship.
Weekly Chart – Click to Enlarge
Ed Carson at Investors Business Daily wrote:
“The stock market rally cleared some major resistance in the past week. The major indexes had solid gains, responding bullishly to uneven earnings reports and economic data. Leading stocks acted well, with breakouts and buy points continuing to work.
Since the Jan. 6 follow-through day, the market rally has shown robust gains. In fact, the advance suggests this uptrend could be a “moneymaker” or even a “life-changing” rally, according to one noted growth investor.”
We exercise patience, and wait for earnings before investing.
After a company reports we have the best odds of positive results going forward. We watch what institutions do after the company reports. Either the stock follows through on the current trend or institutions lose faith and exit. Therefore, researching what Investors Busness Daily authors report on company results and comments determine what we do next.
For example, we’ve been trading the current bullish trends in AMZN, AAPL, NVDA, and META. With all of these companies repoting this week, we’ll be sure to exit before they report on Wednesday and Thursday. Then we’ll watch for accumulation by institutions if guidance is bullish for 2023.
Investors Business Daily – Earnings Week
Meta (META) reports after the close on Wednesday. Price action closed at the 200d moving average. Moreover, day trades and swings have worked as the stock remains above its bullish 9,21, and 50d moving averages. All three are stacked and moving up and to the right.
Note, if earnings and guidance are bullish, institutions should respond by buying and price should move above the 200d. If this happens, we’ll start buying dips again.
Apple (AAPL), Alphabet (GOOGL), and Amazon.com (AMZN) report on Thursday after close.
With many more reports on deck this week, we’ll be focused on earnings and guidance as the key for the current market trend.
Investors Business Daily – Making Money
Boeing is a good example of what we look for after earnings. This is one reason that we are building positions again in the aerospace and military business. Institutions are accumulating shares as price action consolidates above $210.00 (+/-).
Free cash flow (FCF) from companies like Boeing (BA), which reported the first positive quarter of free cash flow since 2018 last week, is another metric we focus on as investors.
This is a bullish signal to institutions, as Boeing management produces positive results since the November 2, 2022 Investors Day.
The Boeing Company (BA) reported its Q4 2022 and FY 2022 earnings presentation last week.
Boeing’s deliveries and backlog are bullish as well, corroborating the bottoming process that saw aggressive buying in November 2022. Investors Day was a positive catalyst.
Moreover, Boeing also outperformed the consensus estimates in its operating cash flow (OCF) metrics.
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