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I am posting more subscriber content on the public blog to illustrate the type of mid week commentary that I provide for Natural Selection quick traders as part of our subscription service. Along with the weekly updated watch-list I provide mid-week commentary that helps traders take advantage of set-ups in real time.
It appears that the markets have made their decision and up is the direction for now. Many sectors and many markets have exploded higher, presumably on continued global rate cuts and $60 billion per month QE (which is not being called QE). We are seeing broad participation from emerging markets and North American markets alike. The financial sector has moved up hard and now be are seeing energy, base metals, materials, tech and others joining the party.
I must admit at this point, I am having trouble seeing why a person would not invest fully in this market. There seems to be no event or catalyst that can impede this now ten year long melt-up. But this recent capitulation of investors back into the market has me thinking contrarian as well. My experience is that usually when everyone is thinking and doing the exact same thing in the market (and it seems like a no-brainer) something is amiss. So while I remain invested with the model portfolios and will continue to trade the set-ups that I see, I am also somewhat cautious at the same time.
With respect to our quick trade watch-list there is a lot to look at. We have several companies that are becoming extended and are in a profit-taking zone, and we have a bunch that have just broken out. There are too many charts to show in one email but I will highlight a few.
Below are a few charts that I would say are in a profit-taking zone with respect to our quick-trading methodology. This is not to say that they can't go further but rather that they are overbought short-term.
As an investment firm, it is not surprising that LFE broke out in concert with the broad markets.
IAG has been running for a while and is currently printing a topping candle.
SKE is also showing signs of topping.
AAV has broken out but looks like it could go higher.
Other charts that have made big moves but look like they could continue include CCW, CWB, BDT and HCG.
Below are a few charts that are just breaking out. Some are on our watch-list but others have just popped up during the week.
JWEL is looking to break out of consolidation to fresh new highs.
Still early days for HBM but there is a nice base forming. We are just waiting for some follow through.
HSE is making a nice move on the back of head office job cuts and a surge in the price of oil.
CPH has had a strong week and we are just waiting for further follow through. Pharmaceuticals in general have had a strong week.
IVN has finally broken out of its lengthy down trend.
Keeping with the inflation/reflation theme, the base metals ETF (XBM) has broken out.
POW has been running since August and has broken out to new highs again this week.
The new names here will be added to the next watch-list along with any other potential set-ups that I find.
Have a great weekend!