Well, well, well.. The markets are looking oh so strong – but oh so fragile. Since the blunder we’ve had at the beginning of August, we’ve worked ourselves about halfway back and since last week we are all the way “filled” on the gap.
Is it time to be 100% bullish? Let’s talk about it… and let’s start with the SPY (S&P ETF)
I’ve uploaded a few technical indicators to show you what I’m looking at… the 200 day, 50 day simple moving averages and the 20 day exponential moving average (I like the exponential on shorter time frame because it moves much quicker) – so we’ve burst above the 20 day exponential, but not yet the 50 day line… I would expect some sort of resistance up there, but once we are through it, we should be in the clear to head back up to all time highs.
If you aren’t in THIS stock when we get above the 50 day line, then you could very easily miss out on triple if not quadruple digit gains. Here’s why I think we should pop above the 50 day line … the Relative Strength Index is still only at 51… we just had one of the strongest Monday opens of the year and the RSI is still in the middle.
I’m excited. Are you? Let’s talk sentiment…
The $VIX is just at its 200 day line, looking to head even farther south. Now, we could get a quick retrace tomorrow of the broad markets since today was so strong which should result in a bounce with the $VIX, but other than that the “fear index” looks to be cooling off.
The NYAD Cumulative is actually much stronger than the rest of the market – which is very encouraging since it’s typically a leading indicator. If it can break above all time cumulative highs, then we should most definitely see the broad markets head north as well… and there’s a wave to catch… fundamentals are in play… technicals are at stake… but if you can combine the two down to 10 rules, then your trading will dominate – click here to see how I do it.
Assuming markets continue with strength the remainder of August then here’s a few stocks I’d love to be in (again I wouldn’t be surprised if there’s a pullback tomorrow – historically it’s a bearish day)…
XLK – Technology Sector (ETF)
This sector pretty much leads the overall market… and especially if we get some sort of good news out of China, this could explode. Again, this sector shows strong overall strength, it’s RSI is only at 53, and it’s above all major moving averages.
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DRE – Duke Realty Corp.
This Real Estate stock keeps pushing … (XLRE is currently the strongest sector in my opinion) … here’s a solid pick for you that’s pushing all time highs. I mean, talk about a stock that you want in your portfolio… DRE has increased over 400% in the last 10 years on the stock price… way outperforming the markets. But if you want to make the big returns by swing trading this S&P 500 pick, then you’ll have to see my training workshop here and I’ll share how it’s done for free.
That’s what I have for you on this lovely Monday.