First, a word on the overall market. Here’s what I said last week regarding the S+P 500:
For months now the S+P has been bouncing in this channel. And look what happened just over a week ago- the S+P broke out of this channel, upwards- a very bullish sign. When a stock or index breaks out of a trend like that, you should pay attention.
But, as you can see, the S+P as I write has pulled back to the top of the old upper trend line. This is very common and a healthy sign AS LONG AS the S+P stays above it, around 1,750. If next a customary bounce occurs, as I suspect it will, the S+P will have truly just broken out to a new, higher level.
And here’s the latest chart so you can see that bounce happening:
I like this action.
And another sector joined in this bounce last week- the alternative energy sector. Here’s the chart:
The GEX is a representative basket of alternative energy stocks. It’s been in a steady uptrend for a year now, and shows no sign of running out of steam (or should that be, running out of battery?). It’s been trending sideways of late, and nothing wrong with that. These sideways spots of turbulence serve to shake out all the weak and frightened money…
Remember: a bull will try to take as few people along for the ride as possible.
You need to make sure that YOU don’t qualify as the weak and frightened money, and that comes from lack of ignorance and/or following sound advice from people you trust. A lot of trading is counter-intuitive to your human emotions, always remember this.
So don’t fool for this bull’s tricks, this sector is stabilizing and bouncing. If GEX can push above $60, ride quality alternative energy stocks higher still.
Best,
Jim.
