The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday.
The “benign grind,” of this bull market, as we had discussed in prior Strategy Sessions as a bull scenario,
continues to assert itself as resilient buyers remain in control, overall, and any hint of a pullback has been quickly contained. Technically, leaders such as AMZN PCLN are still in corrective patterns and are not leading to the upside, though other marquee issues such asFB GOOG TSLA Z have made impressive strides to improve of late.Our overall thesis of a mature, if not ninth inning, bull market, remains intact. However, the risk to shorts is that the current bull ends with a “bang” instead of a “whimper,” in the form of a blow-off top.
That said, I suspect we need to place that analysis on the back burner until after the Fourth of July holiday.
The main issue for us right now, therefore, headed into the coming week is the shortened duration of the trading hours.
Holiday-shortened weeks typically have a slightly bullish bias, with drifting, low volume sessions on the major averages and indeed many individual stocks. Momentum traders tend to congregate around smallish, high beta issues which are heavily-shorted in the hopes of capturing a quick and furious squeeze to the upside. By and large, short-sellers do not thrive in holiday weeks.
Generally speaking, it is often more useful to focus on individual stock setups in holiday weeks than it is to toil over the major averages. While a contrarian view may be that the major averages will make a large directional move this week, catching the majority off-guard, this weekend’s Strategy Session will focus on individual setups for traders and go with historical precedent.
With the market closing early on Thursday, at 1pm EST, as well as for the full session on Friday, you could easily see a scenario where the tape is a proverbial ghost town by Wednesday afternoon, with plenty of large market players already on the beach or tending to a potato salad.
Thus, traders who are trading until the closing bell on Thursday should likely focus on opportunistic individual setups.
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