Good evening StockBandits!
Having just broken out to new highs, the NAZ was sitting north of 5000 a week ago Friday, and the RUT painted fresh all-time highs early last week. However, the blue-chip S&P 500 and DJIA refused to join the new-highs party, and ultimately the stronger averages succumbed to some selling last week. The result was a 2% decline across the board.
The good news for the bulls is that the end of the bull market hasn’t officially ended yet, and the averages may simply be carving out some new trading ranges. For the S&P 500 and DJIA, those may be the same ranges previously known, while the NAZ and RUT currently look to be building ranges above their February breakout zones.
My game plan is to stay cash-heavy for the most part until we get some better action. By that, I mean unanimous failures or breakouts, tighter patterns which carry more favorable risk/reward profiles with them, market continuation, or all of the above. At the moment, things remain touch-and-go, which means it’s even more difficult than usual to find continuation moves.
Preferably, the market trends and I can enter multiple swing positions in that direction and expect them to benefit to some degree based on overall market direction. When the market is directionless, or range-bound, that tailwind isn’t present, so it places a greater premium on selectivity when it comes to new positions.
Let’s get to the charts.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
