The markets

On Friday the market was quiet, although transports were up, 0.74, and the Russell 2000 was up 0.66%. The Nasdaq was up a smidge, 0.4%, and the S&P 500 was up 0.16, while the Dow Jones Industrials were dead flat.

In terms of the sectors, energy, which has recently been weak, was the strongest up 0.67%, followed by technology, the largest sector, up 0.63%. Financials, the second biggest sector, was down 0.38%. Last week we had strong moves in Biotechs, up a total of 9.57%. What did that do for the market? Probably only sent it sideways. It was not a catalyst to move the market higher, but may have stopped it selling off.

21-Day EMAs

The S&P 500 is above its 21-day EMA, as is the Russell 2000, the Nasdaq, transport and the industrials. Given that all five major indexes are above their 21-day EMA, you’d have to conclude that market is still in a bullish phase. There are no tell-tale signs of weakness. Technically the indexes are not looking bearish, but they are lacking stimulus to send them higher.

The technology sector is still looking relatively strong. The XLK index is a great way to gauge technology and it is back up above its 21-day EMA. Are we going to see that have a bit of a run given it’s got above its 21-day EMA? The Nasdaq is also above its 21-day EMA. Will it also move higher? Possibly! We are in some technology-based trades that are doing exceptionally well and the elite students and I are looking to roll-up and consolidate profits on those.

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Going forward …

The futures market, which opens before the cash market, is up. Overseas, all the major indexes in Asia and Europe are up today. We will probably see the US markets move higher as well. I’ll be focussing on the Nasdaq and technology to see if they hold their 21-EMA. Biotech is looking a little bit tired. We have closed out of our Biotech positions.

The MACD is looking very over-bought. There may be some opportunities to the downside. I’m really studying the market, particularly technology now it has pushed back above its 21-EMA.

One stock I did tell my elite students to keep an eye on was CARA, also in the biotech sector. Since I mentioned it two days ago it has moved from $19.50 to $22.65. That has been a brilliant trade.

I’m currently a little weary of Biotech and am concentrating on technology. There may be opportunities there. Tonight I will of course observe the first 30-minutes of the market after it opens and, as always, I will trade what I see and not what I think!