Regardless Of What Anyone Tells You

Random Thoughts

The Ps (S&P 500) sold off fairly hard on Thursday but recovered to erase most of those losses. It seems that lately, buyers are willing to step up and buy weakness. This is obviously a sign of strength.

Ideally though, I’d like to see them accelerate higher since we haven’t seen my forward progress over the last 2-weeks. So far though, they continue to hang in there and remain just shy of all-time highs.

The Quack (Nasdaq) also came back after a dip. It ended flat, well, down .02% on the day. This action has it within .021% of 14-year plus highs. Again, ideally, I’d like to see the index blast past the March peak.

The Rusty (IWM) also dipped but managed to recover most of its losses. For the day, it ended down .17%.

As usual, take things one day at a time. The outside day down at new highs (or baby with a poopy diaper as the candle people call it) on Tuesday was not a good sign but, as I preached, it is just one day. And, so far, the market has recovered. You know me, I’d feel a little better if it was banging out new highs with vigor but at the least, it continues to hang in there.

The Semis remain in a strong trend and have only pulled back. They look poised to continue their uptrend higher.

Energies didn’t set the world on fire but they do appear to be attempting to rally out of Tuesday’s TKO—see free videos on my website later today for Thursday’s (06/26/14) chart show for more on this.

Internet continues to work its way higher.

Gold and Silver stocks had a decent rally. Both still look poised to resume their recent legs higher out of a Bowtie (watch this Youtube video for more on Bowties). Again, it might not turn into the mother-of-all bottoms but it sure looks like a tradable rally. And remember, you have to start somewhere. Regardless of what anyone tells you, you can only predict the short-term. Get that right though, and you can stick around for the longer-term.

FWIW, it looks like the big dip we saw on Wednesday in the E-fah (EFA) shares was based on a dividend payout. When you see such a big move, always investigate further.

Most sectors remain strong but there are some pockets of weakness.

Aerospace/Defense 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 market flat, nothing changes: Don’t fight the longer-term tape. Look for opportunities in the aforementioned areas that appear to have bottomed such as Gold & Silver and look to get on board solid trends in the Energies and Semis. As usual (warning, preaching ahead), wait for entries on new positions and honor your stops on existing ones just in case.

Best of luck with your trading today!

Dave