Here are some of the key charts I’m currently watching.
MSFT
Continues to act well, shallow pullback and breakout to new high. Looks headed for a restest of the 2018 high.
CVS
Deeply oversold and a lot of damage has been done. Will probably take some time to form a base, but there is some value there for long-term holders. Implied vol is fairly high so there are nice premiums for option sellers. WBA in a similar situation.
AMZN
Holy Moly, that is some tight action so far in 2019! Pretty sure a breakout is coming soon, but which way??
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JD
Continues in a really nice uptrend that began once it retook and held key moving averages.
GDDY
Look much more promising compared to last year. Nice break out above the 200 day moving average and then a shallow pullback and successful retest.
LONG TERM DIVERGENCES
Scary looking and something to keep an eye on.
MARKET BREADTH
Would like to see the number of stocks above their 200 day moving average a lot higher as we attempt to retest all-time highs. If this drops below the 55-50 level, look out.
STOCKS V BONDS
On other concern for me on this latest market rally is this – a rally is equities, suggests a strengthening economy, which would lead to higher interest rates. But, the bond market doesn’t seem to be buying that story as yield stubbornly refuse to rise. Then of course there is the almost inverted yield curve.
If you’ve got any other charts of interest, let me know.
Trade safe!
Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.
