Climbing The Wall Of Worry

Random Thoughts

The Ps (S&P 500) ended up around ¼%. So far, they appear to be rallying out of a pullback—without much vigor but rallying nonetheless.

The Quack (Nasdaq) had a decent day. It gained over 1/3%. So far, it too is rallying out of a pullback. Ideally, I’d like to see it take out the 2014 highs, circa 4370 decisively.

The Rusty (IWM) had a solid day. It gained nearly ¾%. It is approaching some resistance around 118. Ideally, I’d like to see it take out its old highs, circa 120 decisively too.

Things continue to improve.

Energies corrected a tiny bit but remain in a solid uptrend.

Gold stocks, especially the more speculative lower-tiered issues, still appear to be putting in a bottom.

Some areas such as Banks and Manufacturing that have pulled back below their prior breakout levels are now beginning to rally again.

There is some weakness though.

REITS appear to be in the early phases of rolling over.

Retail still looks dubious.

For the most part, most sectors, like the overall market, remain in uptrends/near new highs and/or have only pulled back.

I like the fact that this market continues to shrug off bad news. This tells me that investors are willing to step up in the face of adversity. They want to be invested.

The market continues to climb the wall of worry.

So what do we do? I’m still not seeing a whole lot of setups just yet. I suppose I should say “meaningful setups.” There are some stocks that are setting up but they have overhead supply. This could cap the potential gains. I am still seeing a few Gold stocks beginning to bottom out. Therefore, continue to look for opportunities here. And, once again, for the aggressive, Retail might provide some selected shorting opportunities. At the risk of preaching, as usual, take things on a setup by setup and a day-by-day basis. We could be entering a get ready to get ready phase. This is especially true if the Quack and Rusty can make new multi-year and all-time highs respectively.

Futures are flat pre-market.

Best of luck with your trading today!

Dave