The S&P 500 put in a new record closing high on Monday, 6/19/17. So, are we “Up, Up and Away” from here? Maybe . . . but maybe not. Interestingly, the NASDAQ did not follow. Historically, the NASDAQ often leads the overall market and right now, it is looking a little Bearish.
I am not ready to call a Bear Market just yet, but I am very cautious about the overall market direction. After all, we’ve been in an eight-year Bull Market and history has shown that these trends do not continue forever. The smart money is trading individual sectors right now.
We are seeing sector rotation from technology into biotech and pharmaceuticals and I am trading that accordingly – always with a bias towards the realities of price patterns on individual charts. I have shorted a handful of technology concerns (AAPL and TXN for example) and am long biotech (like GILD and IPXL.) There are also some good energy related trades for technical traders.
The S&P 500 is above historic valuation levels and above the P/E that we saw pre-collapse in late 2007. That might be a cause for concern. The good news is that if we start a big correction, we will have warning and will be able to trade it for some really nice profit. We cannot call the top, be we CAN determine when the downturn is confirmed and I will provide that update.
Gold is still moderately bullish. The big picture pattern is still one of higher-highs and higher-lows. I am looking for more strength in the current up move to confirm that we have more highs to come.
Oil is still bearish. I had been calling for a low between $44 – $42 on the crude Oil futures contract and we are there now. Expect a short term pull up on Oil before the next move down begins.
That’s it. Stay tuned and I will continue to provide updates and will continue to provide insight. If anything changes quickly, I will send out a real-time update.
Trade safe, keep your winners big and your losers small.
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