“Keep your eyes on the stars, but remember to keep your feet on the ground.” ― Theodore Roosevelt
The further push above 1500 on the S&P 500 this morning has me sticking to my game plan of being a seller into strength over the past several trading sessions. I am looking for the next rotation into semiconductors, financials, solars, and other assorted stocks. However, I am also aware that many bears are being converted into bulls here, given the obviously strong price action. When that happens, we tend to be closer to a short-term consolidation at a minimum, if not a 1-3% pullback overall.
The major averages are not dramatically overbought, but they do continue to stretch out above their respective 20-day simple moving averages. Thus, I am more inclined to take profits into further strength than to buy out of fear of missing out on a rally. Clearly, the intermediate-term trend is strongly bullish.
However, I am also mindful that straying too far from my discipline is when I have made mistakes in the past. Accordingly, I am inclined to trade around this trend and patiently wait for a better spot to become more aggressive.
Fly frequently claims that the miners are one of the best ways to buy the dip once a downtrend in the broad market appears to end.
What about rotation into PMs towards the end of an uptrend instead? I’ve noticed that the metals and miners are doing well today, and some are printing interesting candles. For examples, one of Gint’s favourite’s – ANV.