Hope your weekend was a great one. We don’t get many too days in the
year whereby the markets are closed, so we took every opportunity to
enjoy it on our end. Hope you did too.
We’ve got a little bit of a mixed bag to start the week following
last week’s reversal back to the upside, and some new high ground on the
NASDAQ and the S&P 500. However, the DOW and the entire small cap
sector – via the Russell 2000 – still haven’t been able to make up as
much ground.
It’s a bit of a concern, and if you think we’re chasing these new highs with a flood of new ideas, think again – these markets have proven chasing the new highs not to necessarily be the most prudent thing to do.
As a matter of fact, when we go back and look at several new short-term highs over the last few years, the moves are often met with some head fake selling. In other words, they sell off for a bit before rotating themselves higher again – not every time but it has happened on several occasions.
There’s obviously no guarantee with these markets right now, but we’re assuming they’ll find their way to our long-term targets at some point, specifically 2,500 on the S&P 500 and 6,300 on the NASDAQ Composite.
Should the NASDAQ move lower first, we’re probably looking at a move to roughly 6,145, which is where the 3X3 DMA (blue line) currently sits on its daily chart here. Not only would that potentially be enough of a move to keep the bulls honest, it would also represent a very logical pullback to the displaced moving average we like to use so often.
As it stands right now, we’re about 80 points away from our target there, which clearly still isn’t being helped by pharma, healthcare and biotech yet – something we still think is going to happen at some point this year.
It’s a bit of a concern, and if you think we’re chasing these new highs with a flood of new ideas, think again – these markets have proven chasing the new highs not to necessarily be the most prudent thing to do.
As a matter of fact, when we go back and look at several new short-term highs over the last few years, the moves are often met with some head fake selling. In other words, they sell off for a bit before rotating themselves higher again – not every time but it has happened on several occasions.
There’s obviously no guarantee with these markets right now, but we’re assuming they’ll find their way to our long-term targets at some point, specifically 2,500 on the S&P 500 and 6,300 on the NASDAQ Composite.
Should the NASDAQ move lower first, we’re probably looking at a move to roughly 6,145, which is where the 3X3 DMA (blue line) currently sits on its daily chart here. Not only would that potentially be enough of a move to keep the bulls honest, it would also represent a very logical pullback to the displaced moving average we like to use so often.
As it stands right now, we’re about 80 points away from our target there, which clearly still isn’t being helped by pharma, healthcare and biotech yet – something we still think is going to happen at some point this year.
No comments:
Post a Comment