One of the interesting aspects about stock market commentary in the social media age is that it often takes what seems like an eternity for enticing setups and ideas to play out. Indeed, a little bit of patience often goes a long way. In the case of Garmin and Jamba, both of these charts continue to firm up for massive moves.
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While all of the cool kids are talking about silver these days, I am more intrigued by the setups in many of the gold miners. They had an initial surge two weeks ago, and then most of them have set back up. See my notes on the following annotated daily charts below for my best trading ideas.
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[youtube:http://www.youtube.com/watch?v=6x_bKuRSle0&feature=related 550 412] _________________
I wrote this post on Thursday discussing how the small-cap dominated IWM (ETF for the Russell 2000 Index) has catapulted directly into all-time highs on a steep angle of ascent. The presumption is that overhead supply will kick in and cause the small caps a bit of congestion here, if only for the short-term. Generally speaking, the small-caps are a good gauge of risk appetite. So, does it logically follow that we should turn bearish not just on small-caps, but on the broad market as a whole? Not necessarily. In fact, I am more inclined to look for capital to simply rotate away from some of the small-caps to other areas of the market, rather than to withdraw from equities as an entire asset class. As the bull matures, even the laughable laggards will have their day to shine.
If the S&P 500 can negotiate and breach that 1344 level in the coming weeks, I am looking for the following well-known laggards in the technology space to see inflows. The bearish fundamental (and technical) arguments are already obvious and ubiquitous amongst market participants and prognosticators, so rehashing them at this point is an exercise in futility. Instead, the pertinent issue is whether those bearish arguments have been adequately priced in, going forward.
See my notes on the following annotated weekly charts below.
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I will develop this theme over the long weekend, but for now please note the monthly chart of the small cap- led IWM (ETF for the Russell 2000 Index). We are still looking at as steep angle of ascent directly into those 2007 highs. With the broad market acting constructively here, the idea is that the boring, large cap stocks will likely attract more capital in the coming weeks, as those little midgets head to the back of the line for the meantime. Rather than getting all giddy about shorting the small caps, I would prefer to look at some of the most hated large cap names to play catch up.
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