Continue To Play The Breakouts. Here Are Some Ideas
Nothing has
changed. Despite overbought and extended
conditions, the market refuses to pull back. Corrections have been limited to
specific names and sectors. This type of rotation is healthy for the market.
For instance, while some extended names have corrected, we told you OILS had
bottomed and would test the highs. Not only did they test the highs, the OILS
went through their highs like a hot knife through butter.
changed. Despite overbought and extended
conditions, the market refuses to pull back. Corrections have been limited to
specific names and sectors. This type of rotation is healthy for the market.
For instance, while some extended names have corrected, we told you OILS had
bottomed and would test the highs. Not only did they test the highs, the OILS
went through their highs like a hot knife through butter.
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About the only negative I can continue to harp on
is the overbought and extended conditions. Eventually, the market will revert
back to the norm…which means back towards the moving averages. Maybe this
week…maybe next. I am also not so thrilled by some froth I am seeing as well
as the TOO bullish sentiment hanging around…but so far, the market couldn’t
care less. But that should not sway you from what is a healthy technical
backdrop. Whether it is OIL, SHIPPERS, STEEL and other COMMODITIES (which
indeed corrected and then came on strong) to HOTELS, CHEMICALS or the other
sectors that are in fine shape, continue to play the breakouts as they come.
is the overbought and extended conditions. Eventually, the market will revert
back to the norm…which means back towards the moving averages. Maybe this
week…maybe next. I am also not so thrilled by some froth I am seeing as well
as the TOO bullish sentiment hanging around…but so far, the market couldn’t
care less. But that should not sway you from what is a healthy technical
backdrop. Whether it is OIL, SHIPPERS, STEEL and other COMMODITIES (which
indeed corrected and then came on strong) to HOTELS, CHEMICALS or the other
sectors that are in fine shape, continue to play the breakouts as they come.
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Volume patterns have been fine and chart patterns
have been fine. NEW HIGHS are swamping NEW LOWS. One other note: SMALL CAPS
have taken back the lead again. Just compare any small cap index chart to
large cap and you will see what I mean.
have been fine. NEW HIGHS are swamping NEW LOWS. One other note: SMALL CAPS
have taken back the lead again. Just compare any small cap index chart to
large cap and you will see what I mean.
Gary Kaltbaum