Well you haven’t heard from me in about 10 days, the reason why, nothing to do. The averages pulled back because of the Egypt and the Libya crisis. As of tonight the markets are interpreting the oil as concern but one of manageable. Saudi Arabia has stepped up to ensure oil output production. We also found out that the USA has the largest oil reserves in the world, even more that Saudi. So what do we trade now? The short answer is it’s not what we trade but how we deploy money into trades. The SP500 topped at 1350 just a few short days ago. It pulled back and bounced constructively off the 40 DMA. We are in a nice area of buying of some of our old leaders but only to a small starter and comfortable position. The IYT (Transportation) is still under the 20 and 40 DMA. This is of concern because as we talked about it before the TRANSPORTS lead the recovery and currently they are not leading.
Pick some of the old leaders, CRUS, RVBD, CAT, JNPR, LULU and SLV. Purchase in small starter positions. Watch the SP500, NDX, IYT and DBC. We need to see the SP500 break 1350. If it touches it and falls back this could be the making of a double top and very concerning. Pay attention to recent tops in your purchases, if they act like what I just described then you got to be concerned and sell.
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