If you just went off the Ps (S&P 500), you’d think that all is well in the world. After all, they did close up nearly 1/2%, they remain in a longer-term uptrend, and they are just shy of all-time highs.
The Quack (Nasdaq) lapped open but then came back it. It did manage to hold on to around a ¼% gain. Net net, it hasn’t made much forward progress as of late.
Yet again, the Rusty (IWM) remains the real concern. It lapped higher but then turned right back down, losing just over ¼% for the day. The good news is that Tuesday’s lows held but that’s not enough for us to start kissing each other. Unfortunately, a big picture double top remains in place here. Combine that with a First Thrust and a Bowtie down forming and it’s pretty hard to get excited. I’m going to flesh this out and take a look at some other moving averages here (and elsewhere) in the chart show later today.
In spite of the Ps being positive, in general, the sector action continues to deteriorate.
Drugs ended lower. This action keeps them stalling at their prior highs. Although a few big up days would fix this, you can’t ignore the potential double top in the works here.
Biotech is even worse. It stalled way short of its prior highs and has been sliding as of late.
With Intel blasting higher, the SMH banged out new highs. Unfortunately, overall, the Semis are also losing momentum. This is why it is important not to look at just 1 index, especially a weighted on.
For the most part, things are becoming iffy.
All isn’t bad in the world though.
Energies had a solid day. This is a good thing since they have been losing steam as of late.
Although they didn’t make back all of Tuesday’s losses, the Gold & Silver stocks bounced back nicely. Again, so far, a bottom remains in place here.
Metals & Mining overall came back nicely to break out to one-year plus highs. We could see new setups here soon.
The Trannys banged out new highs yet again.
Hospitals and REITS (I know, I’m digging deep, looking for some positives) also made new highs.
So what do we do? Not much has changed. The loss of momentum, especially in the smaller cap issues remains concerning. I don’t think you should rush out and sell the farm just yet. DO honor your stops on existing positions just in case. And, begin keeping an eye out for a short or two just in case things deteriorate any further. The one thing that we will have to remember is that we are now in the middle of summer. And, as you know, summers can be choppy. Other than the aforementioned Gold & Silver stocks (and only on entries!), I’m not seeing a whole lot of interesting new setups just yet. Sometimes the best new action is no new action.
Best of luck with your trading today!
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