The Trend Is Up, Should You Buy?
On Monday, the Nasdaq traded back and forth in a fairly
narrow range but did manage to close well and in the plus column. Â
The S&P chopped back and forth in a narrow range.Â
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^next^
As far as sectors, the rally has been diverse. Internet,
retail, banks, financials, software, hardware, food, and metals are just a few
of the many sectors that are in uptrends. In fact, around 90% of
the 239 sectors/sub-sectors that I follow are now trading above their 200-day
moving averages. Areas that have been lagging such as the semis are now showing
signs of catching up.Â
So what do we do? I remain bullish but am
still concerned with the fact that the market remains overbought and due to
correct. Therefore, if you’re nimble and aggressive (or looking to hedge
existing longs), continue to look to play the correction in the index shares but only on signs of
weakness (i.e. wait for an entry or trigger). For everyone else, wait for the
market to correct and then look to get aggressive on the buy side if (and only if!) the uptrend
resumes.
No setups tonight. We should could see a plethora of setups
as soon as the market has a meaningful pullback.Â
Best of luck with your trading on Tuesday!Â
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
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