Market Continues To Improve

Random Thoughts

The Ps (S&P 500) ended slightly higher. This action keeps them near all-time highs. This is a good thing but you know me, ideally I’d like to see it blast higher, not look back for a while, and then have an orderly pullback-rinse and repeat.

The Quack (Nasdaq) was a little bit more impressive. It tacked on .43% and this is enough to keep it at 14-year. As I‘ve been saying, ideally, I’d like to see the index blast past the March peak—so far, so good though.

The Rusty (IWM) was the big winner on the day, tacking on .67%. This action puts it within spitting distance of all-time highs. There’s still a little bit of resistance to overcome but one or two big up days would fix that.

The bottom line is that conditions continue to improve. As mentioned recently, dips seem to get a bid. And now, if all indices can bang out new highs with vigor we could be entering a momentum phase.

The sector action hasn’t changed very much:

Energies ended slightly higher. They continue to rally (albeit slightly) out of last week’s TKO.

With the strong Quack, it is no surprise that technology remains strong

The Semis remain in a strong trend and appear to be rallying out of a shallow pullback.

Internet continues to work its way higher.

Drugs and drug related appear to be on their way back to new highs.

Outside of tech, Gold and Silver stocks were mixed. So far though, they both still look poised to resume their recent legs higher out of a Bowtie. Again, it might not turn into the mother-of-all bottoms but it sure looks like a tradable rally. As I also preach, get the short-term right and then stick around if the longer-term begins to materialize. Write that down.

Aerospace/Defense bounced but it continues to look questionable. It is on the cusp of forming a Bowtie down from high levels.

Retail overall still looks dubious.

So what do we do? With the indices making marginal and not so marginal new highs, there aren’t a lot of new setups—remember, the methodology requires a pullback. In the meantime, Gold & Silver socks look like they have the potential to make a new leg higher.

Best of luck with your trading today!
Dave