If These Two Sectors Can Get In Gear, We Would Have A Market Rallying On All Eight Cylinders
Looking to the indices, on Thursday, the Nasdaq dipped on
the open but quickly found its low and rallied for a solid trend day
higher.
This action breaks it out to new highs for the year.
The S&P put in a similar performance. This action also breaks it out to new highs.
Looking to the sectors, like the indices themselves,
Thursday’s action puts many sectors at new highs and confirms their uptrends.
This included (but not limited to): Internet, telecom, biotech, and selected
metals. Financial related stocks including banks, brokers, and services were
especially strong, with many areas hitting new highs too. The semis managed to
recover from an early sell off but under performed the market on a relative
basis. It’s important for them to make it back to their old highs. Ditto
for retail.
So what do we do? The fact that the indices
made it back to new highs is a major positive. It seems that just yesterday the
shorts were “licking their chops” as the indices appeared to be
stalling (I too was concerned). So does this give us the all clear? Maybe. I’m
not a breakout player, I prefer to play the first pullback. Therefore, probably
the best course of action is to take partial profits in existing longs and trail
a stop higher. Then, on the next pullback, look to get long again.
No setups tonight.
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….I just finished reading your book for the 3rd
time…the book has paid for itself trade after trade…thanks for a straightforward
swing trading manual! …”
Steve T.
