Wheelhouse View of the Market

Good evening...interesting market this past week as it works through the Europe drama and consolidates. The market has made a pretty good move up in the past month.

Market Indices:
The indices essentially are all rangebound (although volatile and news driven); holding near and just above the recent breakout levels. For now, the short term moves are driven by the Europe stuff, and if it becomes too drawn out it could cause problems for the market, but predicting news is futile. Methods trump markets as Stockbee says.




Market Breadth / Market Monitor:
We had a nice breadth thrust in late October but it was followed not by a quiet consolidation, but a big negative breadth day and a so-so bounce. The bounce was enough to keep the secondary indicator (stocks up 50% in a month) at overbought levels, and also the primary indicator near extreme levels. This just means that a rally starting from these levels is likely not sustainable; it doesn't mean we can't go up but breakouts are not low risk trades in that kind of environment. The ideal scenario is some sideways or quiet rangebound action to relieve the overbought conditions, but with the news factor it may not be quiet. The general direction is still up, but we need a break without a breakdown.

Plan This Week:
To start the week I will sit tight to see what happens Monday. I am only in one anticipation trade on VRA right now as a pullback trade. Beyond that my plan is to day trade some this week. I don't want to enter many momentum based swing trades at this point with breadth at/near extremes. We are a couple of weeks from the holiday season so keeping that in mind and not getting overly aggressive outside of day trades.

Have a good week and God Bless.