Special Risk Capital Management LLC

Breakout Up, but One More Hurtle May 13, 2018

May 11, 2018 – A quick look at the chart below confirms an upward breakout.  Sentiment, Money Flow, Volume Flow and Price Strength are all positive.  But more important are the closes above previous Support levels.  But . . one more hoop to jump through is the 7405 level, just above Fridays bar (light green line).

The 7405 level was the last level were Buying Stopped on a weekly basis.  That level was generated back in late March.  With that small caveat I’m “comfortably long”; that’s “invested but not aggressively so”.  The thing I’m looking for is where the market leadership is located.  During the post election run upwards Technology, Semiconductors and Consumer Goods were the darlings.  Tech and Oil have returned to leadership but I sense some hesitation.  Banks, Financials and Small Cap stocks in general are showing signs of strength and that would help maintain confidence in any continued upward movement.

Earnings have been good, but with the massive corporate tax cut they should be.  For now the market is looking way past this reporting period.  A run in Basic Materials would signal a longer term bullish look for the world economies.  For now here’s how sectors are looking in the short term:

Looking for leaders in the “green sectors” at the moment.  Also of note is the recent strength in China stocks.  Have a good week.  ….  Tom  ….

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.