Bulls Trying for a Stealth Recapture

The price action this morning and yesterday in the broad market is far more benign than what we have sen in the market over the past few months after each powerful, multi-day thrust higher. As I discussed on my video market recap yesterday, the “how” of the market can just be as important than the “what,” at times. In the current market, working off the huge rally late last week via a few days of mild, quiet consolidation on the indices should do a much better job of firming up individual charts underneath the surface for better entry points.

Of course, there is no guarantee that a few “dojis” on the indices automatically means we are going higher, but my thesis is that the benign action is an improvement from the whipsaws and wild swings of the past few months. Stocks like CAB and MED have seen tremendous breakouts of late and figure to be leaders in their respective sectors. However, entry points do matter when trying to discern whether or not you are looking at a high probability trading setup. Thus, waiting for the consolidation and secondary breakout as an entry is my preferred style of trading.

Finally. note the Russell 2000 trying to firm up here. The small caps’  laggardness has been apparent for a while now, but breaking up and out of the current daily chart falling channel would be another notch in the bulls’ belts as they attempt to fully recapture this market.