Last year I wrote this same post and the story was pretty similar, market was under heavy selling and consolidating.
But by the end of May market broke out, and as we had our watchlist of growth stocks ready we could ride a nice 2 month bull run.
Last year run:
Some gurus this year as every year are repeating this quote about selling everything and stay out of the market. I say, stay out BUT with your watchlist ready and set to go, because this market has prooved to be resilient again and again. So be ready because just as for today $SPY is poised to break into new grounds.
Watch the similary with this year consolidation:
Lesson learn, stay in cash while consolidating, or with very small exposition, but keep your watchlist up to date because this market is getting ready for a new bull run, it may or may not happen, but we need to be ready.
Thursday, May 14, 2015
Monday, May 11, 2015
Whenever the market starts to shakeout several leaders and indeces start to jump around all over the place without a clear trend, we have to take a look within industry groups to be aware of any shift in trends of industry groups.
Just giving a heads up, the computer software gaming group of stocks are currently trending higher and steadily moving up the ladder.
The relative position of the group was:
This week: #7
Last week: #14
3 weeks ago: #29
6 weeks ago: #62
This group has continuosly trending higher as the market keep shaking off the laggards and showing new leaders.
Some names on this group: $EA $ZNGA $SOHU $ATVI
Per my rules I rather trade $EA because of the market capitalization and liquidity.
Another great performance indicator is that for past 8 quarters in a row $EA has being increasing their fund ownership, that is a rare high number. And if the big boys want this stock I want it too.
The stock reacted very well to past week earnings report, breaking out on almost 3x above average volume.
Definitely at least a stock/industry group to keep on your watchlist.