There’s Only One Thing That Concerns Me
Looking to the indices, on Tuesday, the Nasdaq dipped in
early trading but reversed to generally work its way higher throughout the rest
of the day. This action keeps it at one year plus highs.

The S&P didn’t quite keep pace with the Nasdaq but did
also manage to close in the plus column after trading lower. This action keeps it at new 1-year plus
highs too.

So what do we do? The continuation higher
keeps the majority of the 239 sectors/sub-sectors that I follow at or near new
highs. Further, the indices appear to be in persistent uptrends–forming a nice
new leg up from their longer-term uptrends. There is one caveat though. The
market remains overbought. This creates a damned if you do and damned if you
don’t situation. If you buy, the market will correct from overbought. If you
don’t, overbought will become even more overbought. With that said, I still think the
best course of action would be to wait for a correction and then look to enter
if (and only if) the rally shows signs of resuming. Said alternatively, wait for
a pullback.
Considering the above, manage existing longs and continue to stick
with areas such as commodity related stocks (e.g. metals/mining, oils) that can trade
contra to the overall market.
Looking to potential setups, Overseas Shipholding Group
(
OSG |
Quote |
Chart |
News |
PowerRating),
mentioned Monday night and in the strong shipping sector (they ship oil), still looks like it has the potential to
resume is persistent uptrend out of a Trend Pivot Pullback.

Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Learn my 10 best swing trading patterns and strategies in my new book.
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