Here’s 4 reasons why the next big move is up
The Fed handed the
market what it widely expected in a ¼-point rate hike on Tuesday,
but more on that later. Afterwards, the market remains in a confirmed uptrend
although I’m sure investor sentiment is being tested as the indexes faced a
distribution day of selling on heavier volume than Monday.
It is important to watch the daily action of the
market and equally important to form an overall view. Obviously, when we see
prices reverse and decline we can be motivated to run for cover as well. It is
noteworthy to look at where the strength has lied over the past few months and
see if it is still there. Biotechs
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specific names such as Google
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Amgen
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PowerRating). Even though the market sold off today, these and other
leading names held up quite well. Another interesting thing to note is that the
strongest stocks are coming from growth industries.
Right now, it is important to watch how these and other leading names hold up.
After a 17% run in the NASDAQ, the index has only faced about a 5% correction.
This is normal for a continued move higher and the more negative things that
appear, the better chance we have of heading higher sooner rather than later.
One thing investors and traders should consider is the fact that the Federal
Reserve continues to hike rates. Is anyone out there beginning to think our
economy is stronger than the weekly PPI, CPI, manufacturing reports, etcetera
would indicate?! With the overall price and volume action keeping us in a
confirmed uptrend and leading stocks from growth sectors acting well, one must
conclude that we are heading higher and invest accordingly.
Good Trading!
Tim Truebenbach
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