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No More Upside?

Hey Market Pilots,

The weeks leading up to the 4th of July are typically seasonally bullish and this was true for the S&P 500 (SPY) and Invesco QQQ (Nasdaq exchange traded fund), and a handful of stocks. But for the rest of the market, we actually saw a lot of names sink to the downside.

It was frustrating to be right on the market sentiment, but tackling the wrong set of names for the week. Now that the holiday has passed, the opportunity to catch meaningful longs has also passed. 
It has become slim pickings for now, and one way to view that is through a graph of new highs in each index (pictured below). We can see the sharp decline of new highs starting about mid-May. While there was a little blip in early June, the Moxie IndicatorTM subscribers and I were able to catch a few lucrative trades. Since then the number of new highs has dwindled again.

So beware, despite the indexes rallying the past few days, we are now in the pullback I was waiting for. It’s always uncertain how significant the pullback will be, but most things beneath the surface are getting hammered and so we should be prepared to see even the strong names want to let off some steam.

Your Profit Pilot, TG

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