This coming week could prove to be an important juncture in the markets. The Dow Industrials have already broken out to new highs for this bull move. The S&P 500 and Nasdaq indexes are sitting just below their highs, while the Russell 2000 and Dow Transports are well below their highs. If the Nasdaq and S&P 500 can move decisively above their highs, that will confirm that this bull move has more legs.
As always, I believe there are significant headwinds out there for the market. However, you can bet that if the averages continue higher, fund managers will have to plunge in and buy. They need to do their best to beat the averages for the year, and since the long side has been the place to be for the last eight months, they must be long, and they must be in the hot stocks.
Most of the headwinds facing the market are longer term issues. As such, since this is also a seasonally favorable time of year for the market, it is best to just stay on the long side, but I do not recommend the use of leverage.
Heading into Monday, we have a two week winning streak for Mondays as well. Don't be surprised by any strength in the market on Monday.
As always, since Friday was a positive day for the stock market, there were some nice daytrades. Check out the chart of CSIQ below. This stock was set up nicely by one of the patterns I like to see for a stock ready to make a big move to the upside. After opening slightly higher on the session, the stock did not disappoint, showing a 10% gain on the day.
Have a good week!
Scott Cole www.bestdaytradingstocks.com
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