Are the indices nearing a pivot high? Will tech stocks run out of steam? Are the small caps headed higher? These are questions we will attempt to answer over the next few trading sessions.
The S&P500 SPY ETF
The SPY is trading just above its upper trendline. Over the next few days, we anticipate another flag, similar to last week. Volume has been below average, while TICK cumulative rises. Daily ranges are smaller.
As we approach August, we are aware of potential weakness, as summer and seasonality kicks into high gear. As a result, we will be taking partial profits and trimming the laggards in our portfolio.
NDX-100 – Technology
The Nasdaq-100 has risen for 10 straight sessions, without a respite. We anticipate a red day soon, as this index as trades at all time highs. TICKQ cumulative, though not shown, is rising with price action. As we extend further away from the 9/20ema, potential exists for some mean reversion. That said, volume suggests institutions have been active.
Russell 2000 – IWM
The Russell and biotech stocks have given us every reason to remain long, as these two risk indicators continue to suggest investors and traders show an appetite for risk. As we near the upper end of this ascending channel, we would anticipate some mean reversion or consolidation. Targets for the past couple of weeks have been achieved.
Considering where the indices are trading and the approaching August seasonality, we are compressing our swing size in both existing and new positions. Take profits or trim lagging positions.