July and August of this year the market corrected hard back to the long term uptrend that has been in tact over the past 5 or more years. Following the bounce off the uptrend, in September the market had created an inverted head and shoulders pattern on all major indices. Likewise, many stocks that looked set for further declines in August, had by September and October followed the broader market and created their own inverted head and shoulders patterns as well.
The reason? The Fed had stepped in to bail out the banks.
In November bears started to show their teeth once again as the banks pulled the S&P down and took the NASDAQ trend off its rails. This led to a steep decline back to the long term uptrend again.
Now, here we are again. The Fed is stepping back in and the set up is virtually the same. While major indices don't have a head and shoulders pattern to play off here, we are seeing the same sectors that ran hard in October set up with exactly the same patterns now that we are in early December.
History does indeed repeat herself and sector strength is repeating itself here. If you pay attention, you can profit from the repeat.
Big Cap Tech, Chem, and Industrial Metals are all catching a serious bid here.
The run up last week came on decreasing volume, so we should get a dip buying opportunity this week.
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