On Top Of Old Smokey


In this case we are at the top of the channel in what has been pretty much a one way market this year. Individual stocks and indexes have a tendency to do two things at this juncture; breakout above the top of the channel or get rejected. I guess we’ll find out soon.

There are still two trading days left in 2013 and dont forget that new fund flows will get put to work next week, so dont be surprised if we do indeed rip above the channel and print even more new highs. Nothing surprises me anymore. Bullish sentiment is as high as its been sine May, but that isn’t necessarily a sell signal as we have seen these readings before and the market has managed to trudge higher without a pullback. Still smart to trade smaller with tighter stops up here in the nosebleed seats.

What is very bullish to me was the action last week in the metal & mining( $XME) names.  Stocks like $WLT $CLF $FCX and even $MCP had big downtrend breakouts. My guess is that these moves aren’t just a “one off” scenario.


The financials have been going up ever since Benny and the Inkjets pledged undying loyalty to the cause. $XLF is in a rising bull flag on the daily chart and probably needs a rest soon, but what doesn’t?


The material names ($XLB) also find themselves at the top of a year long bullish channel. Another case of rip or pullback.


So everything still leans bullish into next week. It’s also hard to believe earnings start again in a couple of weeks. Some names that I’m long and still like for next week include:


Good luck next week.

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