The market is at an interesting juncture this week. Here a few things worth watching
11 sessions into the rally off the lows, we are finally seeing some corrective action in risk-off trades bonds and gold miners. They are both extended after monster runs to start the year.
Is this an ABC correction in TLT? If so it could give a nice long entry.
Just how far will the gold and silver index correct after the test of the 2009 lows? After all, we’ve seen a 50% rally in little over a month.
On Thursday, Frank Zorrilla of Zor Capital made a great point on something else worth watching.
Starting tomorrow is when individual names should start shining while the indices take a back seat…
— Frank Zorrilla (@ZorTrades) February 26, 2016
Can some growth or ‘risk on’ stocks continue to shine in the coming days.
This far into a rally, we can also start to see certain asset classes weaken, even if a market rally is to continue.
The final chart i’m eying is emerging markets ETF EEM. It’s formed a corrective channel during the last six weeks.
It topped out at the critical 31 area and Friday the 50 day moving average and prior resistance level around 30.60 solidified. Is this corrective rally ending?
To summarize, it appears risk off groups can continue to weaken near term. It also appears the market will get more selective this week. Certain asset classes can start to weaken while certain stocks and groups MAY be able to show more signs of life.
Trade ’em well!