Here Are My Thoughts On This Market
On Friday, the Nasdaq opened flat but quickly began to
rally nicely. Then, after trading sideways around mid-day, it generally worked
its way higher throughout the rest of the day. This action has it closing well and
at new highs for the year.
The S&P put in a similar performance. This action
breaks it out of the minor resistance from the 920 area.
It remains just shy of a new high for the year.
The June 30-year Bond continued to slide. This action suggests that a top
remains in place here (bullish for stocks). For those who don’t have futures
data, you can use the charts on TM (the symbol is USM3) or use the Ishares Tr
Lehman 20 year+ Treasury (below, symbol TLT) as a proxy.
Looking to the sectors, the action remains positive. Many
sectors are in strong uptrends and/or making multi-month highs. These include
(but are not limited to) retail, biotechs, banks, drugs, broker/dealer, homebuilders, insurance,
and HMOs. In fact, tonight (Friday), I tooled through over 250
sectors/sub-sectors that I follow. The vast majority of them are in uptrends.
Even sectors that have been somewhat “wide-and-loose” such as software
are now showing signs of breaking out.
So what do we do? Well, tonight (Friday) I consulted my
staff of analysts* and they said that the trend was up. Therefore, you’ll notice
the addition of our old friends to the index charts. Based on this and the rest
of the above, I remain constructive towards the markets. Therefore, continue to
focus on the buy side. However, use proper money management since we are getting
overbought fairly quickly.
Looking to potential setups, Tol Brothers
(
TOL |
Quote |
Chart |
News |
PowerRating), in the strong
homebuilders (and let’s face it, who wants to live in a weak home? 2 out of 3
pigs know this), still looks like it has the potential to
resume its uptrend out of a Trend Knockout (TKO).
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*I don’t hire anyone older than 6. After that,
they get too smart when it comes to identifying trends (i.e., reading the
direction of the blue arrow).
“….. It was super book and helped me quite a bit orchestrate many of the individual tools and rules I had been reading about into an integrated trading strategy. Anyhow, thanks for great book and great web site…”
Marty
