Don’t Fight It

Random Thoughts

The Ps had a decent day, taking on nearly ½%. This action has them continuing to breakout out of their high level consolidation/Double Top Knockous-ish Pattern. And, this action keeps them at all-time highs.

The Quack didn’t set the world on fire but it did manage to close in the plus column, continuing its rally out of the recent Double Top Knockout Pattern. This was enough to keep it at multi-year highs.

As I preach, you can only predict the short-term when it comes to the markets with any degree of accuracy.  The Ps and Quack have triggered a buy signal and have so far followed through. So far, so good but as usual, continue to take things one day a time.

I’m not complaining but it was a mostly a big cap affair. The Rusty ended flat on the day.

With the Ps and Quack at new highs, overall, the day scores as a positive.

It is no surprise that many sectors like Ps and Quack managed to close at new highs. Some of these include Brokerages, Insurance, Defense, Health Services, Manufacturing, Retail, Chemicals, Transports, Conglomerates, and Consumer Non-Durables.

Even some areas such as Drugs which have recently rolled over have turned back up and are now making new highs.

Every day that the market makes new highs is a day when you shouldn’t fight it. What is, is. As long as it continues to do this, go with the flow.

So what do we do? Nothing has changed: I’m still seeing a few shorts setting up. No worries though. This is perfectly normal since the rising tide is lifting all boats (i.e. weaker stocks are pulling back). Again, with the market at new highs you certainly do not want to fight it. Since there aren’t a lot of meaningful longs, now would be a good time to trail stops and look to take partial profits in any existing longs in your portfolio as the initial profit targets are hit. If this thing turns into the real deal, then you’ll still have a partial position and participate. And, if it don’t, then you scratch out of the remainder of the position for a better-than-a-poke-in-the-eye trade. Honor your stops on any leftover shorts. This money and position management plan-stops, trailing stops, taking partial profits-will keep you in the game a long time. It creates a portfolio ebb and flow. This helps to keep you on the right side of the market during trends and mostly out of the market during choppy conditions.
Best of luck with your trading today!

Dave