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Wednesday’s trading session was a strong one for the bulls insofar as they held the overnight gaps higher projected from Apple’s post-earnings bump Tuesday evening, even in the face of a “Fed Day.” Even more impressive than just the technology stocks in the Nasdaq moving were the materials and energy stocks attracting inflows. I like the charts of many firms in the chemicals space, although a slew of them are reporting earnings this week. Since I do not like playing earnings, I will wait for them to react and settle.
That said, I do not want to make too much out of any one trading session. Until proven otherwise, we are still working through a corrective phase in the market as we run directly into the dreaded “sell in May and go away” phenomenon. The S&P 500 looks to be in a 1358-1392 range, as the bear flag appears to have morphed into a base. I can trade with some goalposts in place, even if we are not off to the races again.
There seem to be competing forces all over the place in this market. On the one hand, there is little evidence that we are working through anything other than a standard bull market correction. Then again, we have seen sloppy charts and price action for a few weeks now, which makes blindly investing based on the bull market argument seem short-term foolish. I am not interested in picking sides at this point so much as I am maintaing my agility, ready to pounce at a moment’s notice. If the bulls follow-through on today, here are some small cap energy plays to consider. Should the bears recapture the initiative, as has been the pattern in April, I am sitting in cash waiting for a better spot.
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Interesting you are looking at LNG. There was a discussion about natural gas and Cheniere on the KidDynamite blog http://kiddynamitesworld.com/calling-natural-gas-experts-lets-find-a-trade-here/.
$ECA $TAC
But who is the bull and who is the bear (Batman vs. Iron Man)? 🙂