Be more aggressive with entries today — Here’s why
The last two days
have seen the market pull back a bit in a somewhat controlled manner.
Volume has been about average, with slight distribution evident yesterday. The
manner of the pullback has done two things:
1) Overbought conditions have been worked off. This should allow safer entry
into new breakouts since a pullback is no longer immanent. Should the market
decide to breakout, this could provide further fuel to any individual breakouts
taken in the next few days. Looking to get a little more aggressive with entries
right now is ok.
2) I’m not seeing evidence that the market is short-term oversold. In other
words, the pullback may not yet be over. Therefore it is still too early to buy
index shares in anticipation of a bounce. If it turns out the pullback is over,
that’s fine. It’s not possible to profit from every wiggle. Simply use the
pullback as an opportunity to get more aggressive as described in point 1 above.
Sector Watch
Retail has been hit the hardest by this pullback.
(
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PowerRating) is now approaching
support near 94. A strong shakeout below that level in the next few days could
set up a tradeable bounce.
Internets have also shown weakness.
(
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PowerRating) has been wiggling around its
50-day moving average and is also approaching price support. This one also bears
watching.
Strength is being shown in the Semis. A move here above $37.73 for
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PowerRating)
would be bullish and could lead to a new high above the $38.32 August high.
Energy put in a nice day today. This group is still a bit extended on an
intermediate-term basis, though. I’d wait for some more short-term weakness
before attempting a long entry here.
Best of luck with your trading,
Rob
P.S. I will most likely be attending part of the TradestationWorld conference in
Las Vegas in a couple of weeks. Should any of you happen to spot me, feel free
to stop by and say “hello.â€