Brand new month, brand new week, and apparently, a brand new habit for this market.
I’m talking about the fact that we’ve now seen the 2nd dip get bought. Last night I noted how well the market had held up last week with the finishes well off the daily lows, indicating that there was some buying interest out there even on the pullback. I’ve also noted lately how healthy the dip has been – simply because uptrends need pullbacks in order to continue.
The strong opening gap we saw this morning paved the way for additional strength to kick in, and it has. Early gains have been added to, and as a result, the indexes are making excellent moves. The DJIA is leading the way through the June highs, while the NAZ, S&P 500 and RUT are each approaching their next key levels. Stocks which had been basing are breaking out today, adding to the bullish tone we’ve seen of late.
It’s important to remain patient here though, as chasing prices higher isn’t necessary. The key indexes (NAZ, S&P 500, and RUT) all have some proving to do before they can be considered to have “broken out,” plus there will be some back-and-forth to offer additional entries going forward. Nonetheless, today’s action is very positive, so I’ve got no intention of trying to fade it.
As for individual stocks, many of them gapped beyond their technical buy points today, making it tough to get ideal entries. That was one hesitation I had in last night’s Broadcast, as I didn’t want to have to pay up for good patterns. MOS from last week had poor news and filled the gap, and has since moved deep into positive territory on the day, so I really like the action there. I’ll elaborate on today’s action there in tonight’s Hit List.
Stay patient out there, don’t short this market, and be willing to wait for good buy setups to arrive. They will come. Great trading in the current market environment isn’t about buying into 200-point advances, so if you aren’t as long this market as you’d like to be, you aren’t alone. Level-headed thinking, patience, and taking trades with the proper risk/reward is what makes the big difference by the end of the year, so keep that in mind if you feel like you’re underperforming today.
I’ll be discussing today’s move further in tonight’s Bandit Broadcast, but wanted to put out this post ahead of the closing bell to comment on today’s very positive price action. A solid finish would confirm the lift we’ve seen so far, and bring forth the possibility of clearing the intermediate (June) highs in the days to come.
