Monday was another mixed day.
The Ps sold off a bit, closing down around ¼%. This action keeps them near the top of their shorter-term trading range. Net net, they haven’t made much progress in a couple of weeks.
The Quack sold off a little harder. It was down over 1/3%. So far though, its nice persistent breakout remains intact and it only appears to be pulling back.
The action in the Rusty is a little disappointing. It lost 1%. This action has it back to its prior breakout levels (112 in the IWM).
Internally things were soft as you would expect with the Rusty down 1%.
Gold and Silver sold off hard. This action has them making marginal new lows. They appear to be on their way to multi-year lows. With a few exceptions (we are long SLCA), Metals & Mining overall also remains weak.
Bonds were also weak and appear to be approaching multi-year lows. Obviously, when Bonds go down, rates go up—I know, duh! This has been putting pressure on Real Estate as of late.
With the aforementioned notable exceptions of Metals & Mining and Real Estate aside, most areas still remain in uptrends and so far, they only appear to be pulling back.
There were a few pockets of strength. Drugs and Biotech, managed to close at all-time highs. Ditto for the transports-albeit just slightly.
Again, overall, things are still okay but ideally, I’d like to see the Rusty turn back up and the Ps breakout to new highs.
So what do we do? In spite of Monday’s softness/pullback in the Quack, I’m still not seeing a whole lot of new meaningful longs. This could be the database telling us to hold off for a while and let things shake out. Sometimes the database can be wrong but in general, it pays to listen. Considering this, not much has changed just yet: Continue to build your shopping list but wait for setups before you buy. While waiting, you know the routine, take partial profits as offered (see Layman’s for money & position management planning) just in case the market does not follow through. On the short side, don’t fight the overall trend and go after a bunch of setups. However, if you really really like a setup, then take it. Just make darn sure you wait for entries. And then, of course, honor your stops just in case.
Futures are soft pre-market.
Best of luck with your trading today!
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