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Markets have surprised to the upside and could continue higher but short term risk is increasing. And for those who may think they have missed this train fear not as I also think markets are getting ahead of themselves and will correct. And furthermore this is not the beginning of the next big rally.
But let’s review our sectors:
Discretionary:
The wave four for this sector is still not complete as the oscillator still has not come back to zero – and thus it is potentially dangerous to buy at this point in my view.
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Energy:
The pullback appears to be complete for Energy and there is some small upside ahead – be careful not to stay too long in the trade:
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Health Care:
Health Care has returned to a trending pattern – that happens – but note the pullback is not yet complete:
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Industrials:
Industrials give the impression of having completed the pullback but the oscillator has not come back to within 10% of the axis so I consider there is a likelihood that we could see another attempt at a low:
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Telecommunications:
And you may recall my comments last week that because of Telstra this sector would struggle to find new traction at this time:
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And at the time of writing is actually down for the week in contrast to the rest of the market which is up 1.75% for the week to Wednesday.
It is truly a traders market and will be for some time. So savour it.
Enjoy the ride
Tom Scollon |