The gap up this morning was promising for all of about 30 seconds, and the balloon just continued to deflate after that. We saw financials and energy trade higher, along with the Russell and transports, but I’m not buying this ‘bullish’ move. The market strikes me as weak, particularly with cloud stocks, cyber security, and several FANGs displaying their weakness. Let’s discuss….
It’s the setup we’ve been waiting for, and here’s what else I am watching for trades after Monday’s session.
How much more hopium is out there for the market? In this video I look at the markets that are rallying despite the bearish bias and chop in the broader averages.
The Russell has been the weakest link out of the indexes, unable to breach the key resistance overhead. I’m watching price action closely, and if price fades at resistance come next week, I’ll be trading this one to the downside.
Now What? The Nasdaq and the S&P finally broke through the 50 SMA and the market has shown more signs of life the last three days than we’ve seen for a month. However, I want to maintain focus here and not get sucked into emotions. XLC, XLK and XLY have notably improved, with XLU and XLP meeting extension targets. I still like XLE, XLF and XLI to the downside, though I admittedly was early with my first set of entries. Here is what I am looking for, and what I’ll do based on Monday’s open.
Building a solid watchlist is the name of the game when the broader markets and heavily weighted sectors are still in chop. Here’s what is on my radar.
