The week closed positive with both the Russell and COMPQ holding the range break. The longer this holds the more significant the break becomes, however it wouldn't surprise me to see a pullback/consolidation at this zone.
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| $RUT |
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| $COMPQ |
The main reason I expect some form of consolidation here is that the number of stocks above their 20 period moving average is at levels where the market tends to at least pause if not outright pullback. So while I entered last week hyper aggressive in my buying and going nearly full on margin, this week I'll be slightly more cautious. Running my scans I've not noted many anticipation set ups as a number of stocks this past week have had breakouts and continuations. There are however a number of stocks that could use a couple of more days consolidation.
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| $MTMW |
I've also noted that there has been a plateau in the differential between stocks making new highs and new lows across multiple time frames. Breadth tends to turn before the indexes so being mindful of this will taper my enthusiasm slightly and increase my focus on how the stocks I'm holding behave. If I notice a skew away from stocks hitting targets to stocks hitting stop points I'll decrease my position sizing and increase being selective in trades.
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| New Highs - New Lows |
One of the strong positives is the continued sector rotation away from more defense oriented stocks into more aggressive categories. The market may in turn continue to rotate through over the next few weeks setting up a wider plethora of opportunities to in turn take profits and move them into where money is flowing.
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| 52-Week High Sector Tally |
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| ATH Sector Tally |
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