The commodities sectors continue to find dip buyers and as oil consolidates near the top of its range, a strong break higher is the potential here. Since the S&P 500 is weighted fairly heavily with some of the larger oil companies such as XOM and COP, stronger oil prices are likely to keep this index afloat longer.
The NASDAQ on the other hand is vulnerable to some sort of correction. We however continue to believe that bulls maintain the upper hand and the trend remains up. The trend break mentioned earlier in the week has resolved itself as dip buyers once again fed a spoonful of pain to the shorts.
Our question is, why short when there are so many great opportunities to go long in the oils and metals? We suppose there is a natural competitive tendency to want to call the top and prove one's self superiority over others by being the smartest one in the herd. The temptation has been a very destructive one for four months now. And, with the trend aging in people's minds, the temptation is probably stronger now than ever.
We've said it before and we will say it again. Tops take time to build and shorting a strong uptrend is a loser's game.
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