The Real Story Of This Market
On Friday, the Nasdaq rallied early but then chopped
sideways to lower for the remainder of
the day.
The S&P put in a somewhat similar performance.
It remains above its 50- and 200-day moving averages.
So what do we do? I think the real story
remains in the sectors. Out of the 239 industry groups that I track, over 200 of
them are above their 50-day moving average (email me if you would like a link to
a webcast on how I do my sector analysis). And, many of those that are below the
average — such as sub-sectors of the semis — look like they have the potential to
break out of transitional patterns (see below). True, there are a few sectors
such as foods and beverages that look plan horrible. However, these aren’t
sectors that traders would care about anyway. Also of note is the
fact that there appears to be a very quiet and orderly rotation going on–one
sector drops slightly while another sector picks up the ball (i.e. rallies).
Therefore, I remain bullish.
As far as setups, the Semiconductor HOLDRs
(
SMH |
Quote |
Chart |
News |
PowerRating),
mentioned Thursday night, look
like they have the potential to continue to rally out of a First Thrust (email me
if you need the rules). Full disclosure: I have a position here.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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