Not So Fast – Why I’m Still Cautious Despite Market Optimism

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”]PGlmcmFtZSB3aWR0aD0iNjQwIiBoZWlnaHQ9IjM2MCIgc3JjPSJodHRwczovL3d3dy55b3V0dWJlLW5vY29va2llLmNvbS9lbWJlZC9mcEliZlh6UEplND9zaT1HcmdCMDdxNjAxYVp5ek1JIiB0aXRsZT0iWW91VHViZSB2aWRlbyBwbGF5ZXIiIGZyYW1lYm9yZGVyPSIwIiBhbGxvdz0iYWNjZWxlcm9tZXRlcjsgYXV0b3BsYXk7IGNsaXBib2FyZC13cml0ZTsgZW5jcnlwdGVkLW1lZGlhOyBneXJvc2NvcGU7IHBpY3R1cmUtaW4tcGljdHVyZTsgd2ViLXNoYXJlIiByZWZlcnJlcnBvbGljeT0ic3RyaWN0LW9yaWdpbi13aGVuLWNyb3NzLW9yaWdpbiIgYWxsb3dmdWxsc2NyZWVuPSIiPjwvaWZyYW1lPg==[/video_player]

The market’s flashing signs of life, and it has been for a few sessions now, but I’m not pushing all my chips in just yet. 

Yes, the S&P 500 gave us a Bollinger band breakout, and sectors like industrials and financials are leading the charge. Financials, as tracked by the Financial Select Sector SPDR ETF (XLF) broke through resistance, hinting at early strength, while the Industrial Select Sector SPDR ETF (XLI) cleared multi-month highs. 

I’m looking at some other very bullish setups – including some big stocks – that hint at an early recovery, too. 

But I can’t deny the broader picture doesn’t fully support the bullish narrative. A trade deal with China is still in science-fiction territory, and more concretely, copper is flat, gold has pulled back, and crude oil remains in bearish territory. 

Let’s ignore what we’d like to see and look at what the technicals are actually telling us. We’ll let those guide our strategic trades.

More from TheoTrade

Why Volatility Fell As Stocks Fell

Wall Street Borrowed Japan’s Money Runs Dry

How Two Lines on a Weekly Chart Called Last Week’s Reversal

The Bond Level Holding Up Everything

How A $38 Risk Paid $230

You Have No Clue Where Oil Goes Next


Most Recent

Why Volatility Fell As Stocks Fell
Wall Street Borrowed Japan’s Money Runs Dry
How Two Lines on a Weekly Chart Called Last Week’s Reversal
The Bond Level Holding Up Everything
How A $38 Risk Paid $230

Get educational market insights sent right to your inbox.

As Seen In