What I’m Looking For
Choppy, directionless trading is
the best way to describe the market at this time.
Two weeks ago, we saw compelling evidence of distribution in the NYSE
and that told us it was no longer conducive to purchase stocks.
Some of us may have even deciding to take this indication
one step further and put out shorts in the lagging indices and/or sectors.Â
Regardless of how the market is acting right now, it is important to
follow what has already been said, until we see otherwise.
In the near-term, lower prices shouldn’t surprise
anyone and we are now looking for a rally to begin.
Once we see any of the major indices close positive for the day by at
least a ½ percent, we will then look to see if the same index can confirm
that gain with a strong 2% move on heavier trade than the previous day.
This gain will ideally come 4 to 7 days after the initial rally.
This may sound complicated, but this evidence that
institutions are buying stocks is what we want to see before putting our money
to work from the long side. Until then,
choppy action in growth will most likely prevail.
An example of this comes from Advanced
Neuromodulation
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For now, hang on to your capital and wait for another
day. Please feel free to send me
any questions or comments you currently have about the market.
Have a great weekend,