We’re already midway through the week, and the action remains as challenging as ever. From a big-picture perspective, the major indices are in good shape. In fact, on Monday, both hit fresh record highs, and as we’ve said before, it’s tough to be too negative when the majors are hitting highs.
Under the surface, though, there are a few things to pay attention to. First is the ongoing action in tech. On the one hand, the group hasn’t fallen apart further, but the technical pattern in the XLK isn’t the best, particularly with the heavy distribution in that chart. The money coming out of that sector has been flowing into other areas, one of which is utilities. That sort of rotation isn’t exactly a death-knell, but it does indicate a possible move towards safer areas, and that’s something to pay attention to.
The other thing we need to keep in mind is that we are fast heading to the most seasonally weak and volatile period of the year between mid-July and late-October. None of these are reasons in and of themselves to load up on the short-side or head for the hills, but we do at least need to be mentally prepared to adjust should conditions shift.
The good news is that there are still opportunities under the surface. We’ve been needing to dig deeper and be more patient while we let trades develop, but that’s our job, and it’s what we strive to do day in and day out for our community of individual investors. We’ve got a few more charts to share, and as we’ve said before, if you’ve found these watchlists useful, then there’s more where that came from when you take a free, no-obligation trial to Shark Investing Pro.
Let’s take a look at some charts.
At the time of this post, RevShark had no position in any of the stocks mentioned.