TREND TRADE: Long from open, 1/4.
SWING TRADE: Long open, 1/4.
DAY/SCALP TRADE: Buying the dip…
PRICE TREND: Up 1 day.
Was expecting a price whipsaw Friday against a breadth downtrend. Didn’t get it as the market went with the breadth indicator. Got the price pop today.
So what now?
Given that breadth and price are now in sync on today’s upside move would indicate an upswing is in motion, one that may turn into an outright rally for a while.
That is backed up by the SPY coming out of a nearly three-week pullback that managed to get it oversold (as noted in the post below), and once again 40 or more stocks were on sells in my nifty-fifty list for three days, no less. Those three days have created a cluster almost always seen as swing lows and often at rally bottoms (see the chart below for previous 40-sell days and clusters).
Intraday price action was rather ragged today which should make one wary but it can probably be attributed to thin post-holiday trading. All in all, except for the whipsaw in this post’s title, the upside now should have the least resistance.
The easy plays are as always the 3x-leverage index ETFs – TQQQ, TNA, XIV, UPRO — as sell as some sectors like SOXL, BIB, FAZ, and ERX.
Some notable stocks giving individual buy signals today for tomorrow open included GS, NAV, DIS, BAC. One guess at a sudden jump might be NVDA, a screaming leader in the rally before the recent pullback and it is still in the oversold column.
(right click on the chart for a larger view)