Financial media is increasingly prodding traders and investors to question this bull market. A current article on the Wall Street Journal blog analyzes the question, “For S&P 500, Is This the Dreaded Triple Top?”
Marketwatch.com was getting rather negative, but it seems most of those articles have disappeared off the current web site.
The market's action so far this week could be cause for concern. IWM for instance has posted a 2 day, 2 percent decline on well above-average volume:
But notice a similar setup in mid-March quickly faded away and IWM resumed moving upwards.
To be sure, you'll find a number of stocks pulling back on above-average volume and generating stochastics sell signals. General Dynamics (GD) for instance.
But there are many well-known stocks that are holding up quite well, thank you. Allstate (ALL) has been climbing steadily with buying overwhelming selling.
Coca-Cola is closing in on its 1998 high. Up-close days with above-average volume have been overshadowing down-close above-average days:
If a selloff is imminent, as many recent articles had proposed, then there will have to be a sudden change of character in many top stocks. That can certainly happen at any time. But riding strength, as well as weakness, is where traders make money. This market can go up more.
Implied Volatilities are rising, but still near lows. Protective puts can make sense on positions you want to keep. Scaling back is another reasonable strategy. Diversifying with bearish trades as well as bullish trades is another way to ‘lower your deltas'. And remember, “cash is a position”.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, type in www.markettamer.com/seasonal-forecaster
By Gregg Harris, MarketTamer Chief Technical Strategist
Copyright (C) 2013 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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