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

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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.

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