Ton Of Work Remains
Only a couple of changes from
last week to talk about. First, what hasn’t changed
is the good tone in the market off of the July 24 lows. Quietly, the
market is doing a good job of repairing all
the horrid damage that had been done
over the previous months. I still believe this rally is of no more than
intermediate consequence…but as usual, I will let the market be the guide.
Longer term, there remains a ton of work to do. What has
changed is that I now believe the Nasdaq…particularly
TECH…has now started its own short to
intermediate-term rally. It had to start somewhere. After an 80% drop in the
Nasdaq 100, now
is good as time as any. As usual, I don’t know how long it lasts and how far it
goes, I just believe the direction has changed near-term.
There is not much to buy there because you are buying off of the ugliest of
charts. This call is to tell you not to be short TECH for this second.
The other change is on the sentiment front. As you know,
sentiment has been in the bullish camp because of all the bearish bets being
made by the wrong-way crowd. Well…the tide has already turned as put/calls are
now at their lowest levels in quite a while, the VIX has now plunged and talk of
“the bottom” is starting to pervade in the popular media.
Just continue to play it close to the vest. Breakouts are
occurring and for a big
change…are now working. The problem is that there aren’t many and quality is
fleeting. My other thought has to do with that we are already 1200
points from the lows and September is lurking
around the corner. I am not a big believer in seasonal strength or weakness but
it is something I do not ignore.
Most sectors are still climbing out of their steep dives
and have more repairing to do.
Sectors with stocks setting up or breaking out are GAMING,
SMALLER BANKS and SCHOOLS.
Join me for TraderTalk, this Thursday, August 22, at 4:30 PM EDT, where I’ll be discussing how I am becoming more positive on the market. Just click the button on the home page at 4:15 PM EDT on Thursday to join in.