Note rotation into tech as commodities got spanked last week. We wrote last week and repeat today — this is one of the sectors where we’ll be fishing for break-out longs.
Trannies holding well and another sector currently showing relative strength.
We’re not big fans of trading retail stocks (for the most part they lend themselves more to swing trading than daytrading) but this is an undeniably strong chart.
As long as silver was making extreme moves (50 top or last Thursday’s plunge ) it had our interest. However the rubber band has now snapped back and the commodity is rallying (albeit in a very mute manner). Except for possible intraday scalps (likely long) we’re much less interested now in this metal. What would change that? Further weakness into 30.5 area which doesn’t look likely in the immediate future. We expect at least a bounce here back to 38 support (now resistance) but most likely will not be involved as we don’t feel the same “edge” as we did before. For the most part if we don’t have a concrete edge/spot to trade against we lose interest.
If you trade commodities you always watch the USD. This is the dog that will wag the tail — and right now it’s barking. We’ve seen the USD try to rally and fail countless times — will be interesting to see if it will be any different this time. Logical first target is the 50SMA.
As you can note, we don’t particularly feel any edge in any direction right now. We need a bit more guidance (even a one day rally could change the scenario) from the market and the USD to see how the trend will develop. Take it easy out there and if you see what we see, then trade accordingly and don’t force trades!
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