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A Cautious Breakout Higher June 12, 2021

Posted by Tom in Thoughts.
Tags: , , , ,

June 11, 2021 – OK, on Monday we got the breakout above the 13836 level and continued higher. The next level to keep an eye on is the 14206 level which was the previous high level. Price support now moves to 13548. Everything is good; right? (click on chart to enlarge)

Sentiment (top window) is Bullish, as is Money & Volume Flow. Price Strength is very good as well. What’s there not to like? Well I note at the bottom of the chart how volume is falling off. I was hoping for at least an average level as prices push higher. But one can’t have everything line up perfectly.

The pie chart below is of the number of stocks in the broad S&P 1500 and where they are in relation to their 50 day simple Moving Average. Generally, when a stock is above it’s 50 MA that’s considered a positive / Bullish sign. The good news is that there are about 65% of them above their MA. IF that were to drop to say 40%, it would be a sign of narrowing market leadership and a sign of contraction and a price correction. Also of note is the color coding of just how much the stock is above / below its MA.

The last piece of information is that of the Short Term Sector Strength table. This is where I tend to “prospect” for candidates that are performing better than the general market.

I have highlighted the 20 Year Treasury (#7) and the S&P 500 Index (#14) to point out a caveat. Note that (in the short term) Treasury Bonds have out performed the S&P 500. Humm. A flight to safety or just concerns about inflation, etc. ? I also saw that Treasury bonds have been out performing (a.k.a. Relative Strength) Corporate bonds. That’s unusual. So everything is not lining up perfectly, but it rarely does.

I have been taking increased positions in instruments (stocks & ETF’s) in the strong sectors, but watchful of the overall strength. We’ve come a long way in an unusually short period of time. It would be quite appropriate for things to slow down or become volatile over the Summer. Keeping an open mind about the next move.

I should note the next 2 weeks will be short posts, not that they may be less important, but I will be extra busy over that time. Have a good week & Take Care. …………. Tom …………

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


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