Despite these positive developments, a couple of troubling divergences stood out for me. First, the VIX volatility index, which had been moving inversely with the market, rose several percent today. Secondly, despite broad strength, the financial sector remains several percent away from making new uptrend highs, and it missed by a hair getting above its 200-day moving average. This sector had been a leading one this entire rally, so either it's to be a laggard this go-round or it's a sign of trend change. Looking at subsectors, the Philadelphia Bank Index had a negative close and the KBW Regional Banking Index bounced off resistance at its 50-day moving average after falling below it a couple weeks ago.
This latest phase of the rally is still in the early stages, and there's time for these discrepancies to be resolved. As for our holdings, TWM was killed by the rally, and we bought all the longs from yesterday's list—at reduced risk, since the buy points were breached within the first 45 minutes of trading.
| Current Holdings | ||||||
|---|---|---|---|---|---|---|
| Ticker | Basis | Closing Price |
Perf. | Sell-Stop | Additional Exit Guideline | Chart |
| DGP | 18.68 | 21.85 | +17.0% | 21.29 | N/A | Chart |
| SSO | 25.06 | 27.60 | +10.1% | 25.29 | N/A | Chart |
| ASIA | 20.68 | 21.08 | +1.9% | 20.19 | N/A | Chart |
| RATE | 30.77 | 31.06 | +0.9% | 29.63 | N/A | Chart |
| UYG | 4.11 | 4.27 | +3.9% | 3.89 | N/A | Chart |
| JACK | 27.01 | 27.62 | +2.3% | 25.69 | N/A | Chart |
| CPSL | 2.26 | 2.42 | +7.1% | 2.22 | N/A | Chart |
After today's huge surge, finding new ideas will require a pullback or consolidation. The following idea is the only one I was able to find that looked halfway decent.
| Ticker | Entry | Exit A | Exit C | Chart |
|---|---|---|---|---|
| CENX (Century Aluminum) | 6.54 | 6.09 | 5.79 | Chart |
Please refer to "How To Trade The Ideas" (right-hand side) to read this table.
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