Exactly What You Should Do Today

Random Thoughts

Tuesday was a bit of the good, the bad, and the ugly.

The Quack sold off a tiny bit. So far, it only appears to pulling back from its recent persistent breakout from a base.

The Ps sold off fairly hard but were able to recover to close off their worst levels. For the day, they lost a around 1/3%. This action keeps them stuck in a sideways range. Net net, they haven’t made any progress since mid-November. This isn’t the end of the world but as a momentum guy, I’d sure like to see new highs.

The Rusty probed into its prior breakout levels before recovering.  Nevertheless, it still ended down around ½%.

The Rusty reflected what happened internally. The selling was fairly broad based.

The Banks got whacked pretty hard. The Regionals still look pretty good here-so far they only appear to be pullback back. However, any additional weakness would be concerning.

There was some ugliness out there. Krispy Kreme Doughnuts got whacked over 20%–I think they found out that I was on a low carb diet.

There were a few other debacle de jours out there.

Most sectors still remain in longer-term uptrends. This isn’t a big shocker with the major indices just off of major highs. Areas like Defense, Drugs, Biotech, Financials, Insurance, and Health Services-to name a few-only appear to be pulling back in their solid uptrends.

The Transports were hit pretty hard but so far, they too only appear to be pulling back. This action actually sets up a bullish (if it triggers!) TKO pattern. Email me if you need the pattern.

Metals & Mining, led mostly by Gold & Silver, continues to bang out new lows. Real Estate is also stinking up the joint.

The Semis have been sideways at best for the past 3 months.

As usual, take things one day at a time. A few big up days would make all the difference in the world. Additional deterioration would be concerning.

So what do we do? I’m still not seeing a tremendous amount of buy side setups. As mentioned on Tuesday, this might be the database talking. And, as I preach, it often pays to listen. Right now it appears to be saying to sit back and let things unfold. Don’t worry. If we end up in a bona fide new bull trend, there will be plenty enough time to add new positions. In the meantime, true, you don’t get paid to “do nothing” but at least you are not losing by putting on new positions. Sometimes the best action is no action-write that down.

So Big Dave, you’re telling me that you, master trader (what did  you call me!?!), aren’t  doing anything? Well, we have 1 on the radar for today but I seriously doubt that it will trigger. I also did a Forex trade overnight just for S&Gs–but the real money is in picking the best stocks (see below).

Futures are soft pre-market.

Best of luck with your trading today!

Dave