The Market
As a substitute of breaking 3,800 so we might then rally, we went proper to three,900 to see what’s up
there. This will likely be a superb week for numerous assessments out there.
You see so many charts are heading into overhead resistance, so we’ll get to see in the event that they
can eat by way of it. That’s one check. Just like the Power Choose Sector Fund (XLE) – Get Free Report, which
is now sitting at resistance. The distinction right here is that that is the second journey as much as
resistance (the final one was simply earlier than Christmas) so we’ll discover out if the sellers come
out or if the patrons can outlast them.
However there’s additionally a check within the down and out areas just like the semis. The Semiconductor Index
SOX is knocking on the door of the decrease finish of resistance and it’s the first
time it’s right here since breaking down a month in the past. I nonetheless don’t belief the semis to make a
huge run, however I’m keen to be confirmed unsuitable.
Then there are the banks. I feel the KBW Nasdaq Financial institution Index (BKX) ought to run into
bother at that downtrend line ($107-$108). That is the second time up right here as nicely (see
the primary journey up in early/mid December when the Financial institution Index failed at $105). But additionally they
have earnings due on the finish of the week in order that’s their huge check.
There may be additionally a check for bonds. Right here is the yield on the CBOE 10-12 months U.S. Treasury Yield
Index sitting at a key pattern line. My sense is even when it breaks it the break will likely be
short-term. I feel 3.40% (the lows from early December) won’t break on this journey down.
However the actual secret is if that blue line breaks or holds.
Lastly, there’s the greenback. I’ve been within the camp that we’d not break this assist
space on that first journey down and we haven’t however we haven’t precisely rallied onerous off it,
have we? A break right here in all probability stops at 102-ish however I might think about it a break that’s
noteworthy.
I proceed to love that breadth is outperforming. I proceed to love fewer new lows on
down days. I proceed to love the low Every day Sentiment Index readings on the indexes. Or
the truth that so many imagine the primary half of the 12 months will likely be down. What I don’t like
is that my indicators usually are not terribly oversold. I additionally don’t like that the DSI for the
CBOE Volatility Index is again at 15 which suggests if we do rally some extra this coming week
the arrange inside just a few days will likely be to go again down.
So sure, this week will likely be a check for the market in additional methods than one.
New Concepts
As a contrarian, you may think about that I’m eyeing all these tech shares, considering there
must be an upside commerce in them with all that negativity. But, I additionally know that we’ve
had extra success to find bases just lately, not taking part in the prior bull market’s winners.
However that doesn’t imply I’m not targeted on a potential very short-term commerce in Apple
(AAPL) – Get Free Report. If it may possibly get by way of $130, I feel it may possibly get to $135 rapidly as shorts
are pressured to cowl. And wouldn’t a rally in Apple relieve among the gloom?
Cleveland Cliffs (CLF) – Get Free Report did breakout and had a terrific little run late final week. I
suppose it measures to $20-ish however I doubt it will get there in a straight line. If it will get one
extra day of upside, I’d in all probability take a little bit off on a buying and selling foundation.
I discover myself drawn to Altria (MO) – Get Free Report, particularly if it may possibly rise up over $47, then I
suppose it may possibly get first to $48 after which to $51 and probably that hole round $53 beckons. It
has a really juicy 8% yield. If it breaks $45 I’m unsuitable.
At this time’s Indicator
The Hello-Lo Indicator is heading up and by no means bought to single digits. Now I need to see new
highs improve, not simply new lows contract.
Q&A/Reader’s Suggestions
Helene welcomes your questions on Prime Shares and her charting
technique and methods. Please ship an e mail on to Helene with
your questions. Nonetheless, please keep in mind that TheStreet.com Prime Shares
just isn’t meant to supply personalised funding recommendation. E mail Helene
right here.
Raytheon Applied sciences (RTX) – Get Free Report has had a pleasant transfer however I don’t suppose it has the power
to get by way of that previous resistance round $106. If it will get there, I’d be a revenue taker.
Normal Dynamics (GD) – Get Free Report held assist however hasn’t performed rather more than that. I’d like to
say it feels prefer it desires to rally and breakout however it feels extra uneven to me. One factor
I’m positive of is that if it breaks $240, I don’t need to personal it anymore then it could look
prefer it’s on observe to fill that hole close to $230.
PayPal (PYPL) – Get Free Report has numerous resistance developing within the $80-$85 space. I think it
doesn’t get by way of there. The inventory has a collection of decrease lows and decrease highs so
until/till it may possibly commerce over $90 that sample appears intact.
Generac Holdings (GNRC) – Get Free Report has no base to talk of however it did attain a measured draw back
goal. If it may possibly mill round right here ($100) for some time longer then possibly it’s consuming
by way of the resistance, however there’s resistance all the best way as much as $120, so if you wish to
play this, use a decent leash on it.
Zebra Applied sciences (ZBRA) – Get Free Report has me intrigued in that maybe it’s attempting to make a
backside however that’s as a lot as I can see there – attempting. Even when it may possibly rise up and over $275
there’s simply resistance all the best way up. For me to suppose the inventory has some respectable upside
it must map out as I’ve drawn in blue over the subsequent few months. Then I would
imagine there’s extra right here than what I see now which is a inventory with numerous resistance
overhead.
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