Hey Market Pilots,
This market has been one of the more challenging ones I can remember and the most bewildering, too. I say this because if we were to simply look at the indexes, we would think the market is doing really well where names are trending and setups are prevalent. But if you step into the fray and actually try to trade, it has been frustrating to say the least.
There certainly are bullish themes as financials, oil, and commodities are doing well. But they tend to be vehicles that don’t swing trade well and are better suited for the longer term investor who can hold through a multi-month trend with non-specific setups. Even if we drill down into some specific names, differences emerge. Steel Dynamics (STLD) and Nucor (NUE) have been on a tear which resembles the energetic moves we had a few months ago in the “future tech” names. But then we look at Cleveland-Cliffs (CLF) and U.S. Steel (X) which just got held up at their previous highs and are much more choppy.
I do think CLF and X will continue rising, and I think this rejection at the previous high should actually turn into a buying opportunity. Still, it is interesting to note the differences in setups and behaviors.
I also like the look of many oil stocks as the economy comes back on line with COVID vaccines and summertime activities. The problem there for me is that it has been earnings week for so many oil names and, as a rule, I wait until after earnings to take a trade. Therefore, I haven’t been able to tackle any names, but that will start to change as most of them will be past earnings toward the end of the week.
Oil will be the area I start to explore the most… searching for a new strike.
Your Profit Pilot, TG.
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