Just what the doctor ordered for this market after Friday’s huge rally after fears over a DB collapse subsided. Volume was light on the session coming off the weekend. Lows of the day were set at 12:30 and we were able to find buyers through to the close. It was nice to see the support come in and certainly is a bullish sign for this market. Industrials were the top gaining group while Utilities and Real Estate shed more than one percent a piece. Not an exciting day to say the least, but a solid consolidation session for this uptrend. We continue to hang onto our moving averages and our positions for the most part are acting well. We will continue to push forward with what this market is giving us. No need to be a hero and press our luck. Our job is to make gains and sticking to our process will maximize our potential.
Utilities and Real Estate were our two biggest losers on the session. Higher rates would certainly hurt both sectors or you would think. Utilities are seen as a safe haven for low rates while higher rates would erode purchasing power in real estate. Again, we surmise this to be the case with the knowledge anything can and will happen. Know when to get, what your position size is, and when to exit a position. These are key ingredients to maximize your gain potential. If you are not disciplined enough the odds you lose big increase exponentially! Do not let this happen to you.
On the positive side of things transports and semiconductors are acting well. Money is flowing into hot sectors and we want to go along for a ride. There is no need to fight any trend. Try swimming upstream and see how far you get. Transports are looking like they are about to go for a long ride higher. We’ll be paying attention and will look to get long any signal we get.
Not a bad way to start the week. Could have been a lot worse had any news regarding DB falling apart. We continue to see reason to be long this market given the price action. Sure, we can listen to the perma bears (what is left of them) and say DB is about to tear down this market. In the end, opinions do not pay in this market price does. Focus on what matters and make gains.
Cut those losses short and have a great week!
