Markets sometimes move in sprints but eventually they have to pause to rest.
The Dow has gained 1,389 points in four days and closed well into new high territory today. Meanwhile the Nasdaq 100 dropped back below 4,700 intraday as it lost 78 points. This was a clear sign of sector rotation as investors move into areas that should do good under a Trump presidency.
The Dow is on fire because it is the large cap industrials, energy and banks. The tech portion of the Dow was under pressure as was the dividend stocks like PG and JNJ. Strangely, IBM was an exception. The gains in the Dow stocks have been off the scale. For instance caterpillar (CAT) is up 17% over the last five days and Goldman Sachs +14%. I am loving it but these gains cannot continue.
We are likely to see some profit taking on Friday. Given the recent gains, it could be severe. Once we do consolidate, I believe we will continue higher. We just need to wait for that consolidation.
NEW BULLISH Plays
No New Bullish Plays
NEW BEARISH Plays
No New Bearish Plays