Weigh The Evidence

Random Thoughts

Friday was another good day for the Ps. They tacked on nearly ½% to close at all-time highs.

The Quack had an intra-day reversal but still managed to hold on to over 1/3%. This is enough to keep it right at multi-year highs.

The sector action still looks pretty darn good. Defense, Consumer Non-Durables, Drugs, Leisure, Manufacturing, Media, Retail, and others managed to close at new highs. I suppose this isn’t a shocker when the major indices themselves are at new highs.

For those keeping score, the Trannies were a little soft but they still only closed just off of all-time highs. Their persistent trend from a breakout remains intact.

Metals & Mining continues to hang in there. They are just shy of multi-month highs. The individual issues here are looking even better. The great thing about these stocks is that they can often trade contra to the overall market.

Foreign shares (EFA) were off a bit but so far, they remain in a solid uptrend.

The above sounds great but I suppose you can’t have it all (and if you did, where would you put it? Wright?). The hits just kept on coming. Once again, there were quite a few debacle de jours. HWAY,QLIK,RMD,NCR and SYNA were a few that I noticed.

Not too much has changed just yet thought. Overall, in spite of some pockets of weakness, things still look pretty good. As mentioned recently, predicting markets is a game of clues. You have to weigh all the evidence and build you case. So far so good but it is important for us to watch to see that additional weakness does not develop.

Again, I’m not going to argue with a market that’s at or near new highs.

So what do we do? The song remains the same for now: I’m still seeing a few pullbacks setting up in the aforementioned stronger areas. Therefore, start looking to add/add back on the long side. As usual, make sure you wait for entries. As I preach, this, in and of itself, can often keep you out of new trouble. Continue putting together your momentum watch lists (or pay me to do it for you). Once again, as long as the market remains near new highs, I would avoid the short side for now. Regardless of what you do, make sure you honor your stops once triggered
Futures are flat pre-market.

Best of luck with your trading today!

Dave