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Anyhoo, the refiners are starting to look better after their correction, so you may want to tale another look, this time from the long side. Everything is trade. I will review the same stocks that I talked about in the April post in the same order.

$VLO- Was a good short down to the 200 day simple moving average, where it found support (yellow line). As you can see, it bounced and is moving higher again.  It had a bullish day on Friday as volume improved and MACD is trying to turn up.  It close  slightly above its 50 day moving average (red line) which also happens to be right around where its downtrend line is (white line).  A move above the 41.50 level with volume could break this one out again.

$PSX – Is at lateral resistance and could get going again on a move above 66 with volume.

$TSO -Had a massive high volume breakout on Friday, so watch for a continuation higher, although I would not chase this one as it has already broken out.  Wait for a pullback or just let t go.

$WNR- As you can see WNR had a massive head and shoulder pattern, broke  the neckline, bear flagged and went even lower. It did find support at  its 200 day moving average (yellow line) twice (double bottom?) and bounced hard. Those 200 day levels can be magic, I use them all the time for really good support and resistance levels. Anyway, if this one can get above the 50 day moving average (red line) which is around 32.75, it could get going to the upside again.

Hope you found this update helpful.

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I’m not a Pollyanna or a perma bull or bear, but it’s quite possible we have entered full stock market melt up mode. The fundamental or technical playbook isn’t as important or telling as it usually is, because risk has left the building for now.  Some of the skeptical bulls are asking what the next catalyst will be to send stocks even higher, while the bears look at a weak macro snapshot and wonder how we are even here at all.  It really is fascinating when you think about it, yet bull cycles often don’t make any sense at all. The technology bubble confounded everyone, yet it kept running until it didn’t. Then it ended in tears.

I don’t care about volume because the depth and breadth of this market is really quite healthy,  and most sectors are involved now. We have basically doubled the $SPY on low volume since the depths of the 666 lows., (net out the original short squeeze volume).  Housing ($XLB), materials ($XLB), financials ($XLF) and tech ($XLK) has finally woken up. The fact that utilities and consumer staples are at the highs isn’t necessarily a negative tell, because true bull markets lift all boats anyway.

The world still prints, and although there has been some conversation about the “The Bernank” curtailing QE, keep in mind that we are probably one soft employment report away from that being right back in full wing.  So bad is good for the market. God forbid things do improve…watch out above.

We witnessed about a 50-60 handle dip in the $SPX in mid April, it got bought, and we’ve been in rip mode ever since. The bulls want to be so much “more long” than they are, but they are waiting for a pullback to take meaningful long positions. A non meaningful pullback leaves them no choice but to chase prices higher.

Bull markets bail everybody out, and if your wrong on a trade, it usually isn’t for long. Good times right now. Have a great weekend and good trading next week.

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It’s fun to be Shinzo Abe these days. He’s become an economic rock star and even has a Wikepedia page to describe “Abenomics”.  Here is what Abenomics is :

It consists of monetary policy, fiscal policy, and economic growth strategies to encourage private investment. The detailed policies includes inflation targeting at a 2% annual rate, correction of the excessive yen appreciation, setting negative interest rates radical quantitative easing, expansion of public investment,buying operations of construction bonds by Bank of Japan (BOJ), and revision of the Bank of Japan Act.

I don’t know what else to say other than I still love the long Japan trade via  $DXJ and very short the Yen via $YCS.  It will probably end in tears two years out, but for now, you need to be long this bubble.

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This stage of the market is really one of disbelief in my opinion. It seems to go higher everyday as most just watch.  It’s been a record 177 days since the market has corrected 5% . By the way, Tuesday is the best day of the week ,as we have seen 17 straight up Tuesdays.  In 1968 we saw 24 “up” Tuesdays in a row.

Corrections can happen in two ways, “price or time”. Meaning that we don’t necessarily have to pullback hard to shake out weak hands. It can just settle and consolidate constructively over mini time frames. Of course the market can get hit hard and pullback, I’m just saying that that isn’t the only way we can consolidate gains.

Hedge funds aren’t close to keeping up with the benchmarks and many chief investment strategists at the bulge bracket firms still have $SPX 1350-1450 targets by year end.  As an example, I watched the chief equity strategist at Wells Fargo get interviewed yesterday. She has been at a 1350 S&P target since January and sticks by it. She seemed nice, but seemed better qualified to manage your local bank branch.  Her 401k is probably jammed with her own Wells Fargo stock, but she has probably never bought a stock. I’m rooting for her.

I’m neither a Pollyanna or a perma bull, but I know when you need to be long stocks. You are fighting an epic global market manipulation to do otherwise.

So if you think you missed the move you really haven’t. To give some perspective on this, look at the chart of the financials below. Yes the banks have moved, but they aren’t close to where they probably will be.

My best advice is not to chase stocks that have already ripped, but do your homework and focus on set ups that haven’t even started to move but are developing technically. Good trading.

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