For about a week now we have had a nice stock market rally after the S&P 500 held its 2662 level, but now that momentum appears to be stalling out.
Here is the Nasdaq, which had a reversal today and looks extended anyway.
And here is the DOW, which simply looks droopy.
Since the January peak in the DOW strength in the market has narrowed to big cap tech stocks and bank stocks, but most of the banks stocks got slammed hard today.
And the two dozen big cap tech leaders have gone up so much in the past two months that it’s hard for me to expect them to continue higher like this at this rate without having a pause or a dip first. Take a look at AMZN or example.
This isn’t to say that the stock market is going to crash, but I wouldn’t be shocked if we don’t see the DOW test its 150-day moving average over the next six to eight weeks.
Over the next few months I’m looking to see internal weakness in the market grow with big cap tech remaining the area of strength.
Right now though with stalled momentum there are some stocks very vulnerable and even sectors in danger.
From a trading perspective I think it’s time to take some money off the table. The rally was nice, but momentum is stalling so ring the register.
From an investing perspective make sure you are on the strong sectors and get out of sectors that are not working right or were passing fads for a few months like blockchain/Bitcoin. But there are even some popular widely owned “safe” stocks that aren’t good anymore.
I put out a free report on several situations like this that are in trouble with five doomed stocks serving as examples. These stocks are in the Nasdaq which makes them more troubling for them as that is where the strength is. To access this report click here.
If you are new to this site then get my next trading update by scrolling below and joining my free email list.