Seasonal Positives Still In Play

Traders ran for the exits after some scary infation data on Tuesday, but little technical damage was done.

We are still in the usually bullish seasonal period starting on the last day of the month and running through the first five days of the new month.

This is traditionally the time when large pension funds put new money to work in the stock market, and often leads to temporarily higher stock prices.

We still suggest caution and strict adherence to what's working at the moment, large cap S & P 500 stocks.

The S & P 500 continues to act better than the Nasdaq and the small stocks, so this would be an area to concentrate on for those interested in trading this period.

Our S & P Spyder trading model is now an open long.

The S & P has been benefiting from one fact, money flows have turned away from growth, toward reliable earnings, such as those produced by large drug stocks, big oil stocks, and consumer non-durable companies.

Big oil stocks, utilities, consumer stocks, and large drug companies are starting to see some money flows are increasingly strong with the Amex Pharmaceuticals Index (DRG) and the Consumer Index (CMR) both testin key long term resistance areas.

Still, if technology was to make a bottom, and start to rally, the current climate fits the bill of such a set of developments, given the doom and gloom on the sector.

From a practical point of view, the next few days might offer a slight to moderate upward bias, worth trading, although we suggest avoiding huge risk taking.

Commodities Still Trading Sideways

Natural gas rocketed above $8 in the nearby September contract.

Crude oil is still trading near the $75 area with the $80 resistance level proving tough.

Gold is still trading inside the $600-$675 area, with prices responding to news reports from Israel, but also responding to economic news.

Check our energy section for bond, gold, dollar, and currency recommendations.

What To Do Now

See all our sections for new recommendations.

This is a good time to follow the money, but to be prudent in allocation. In other words, this is not a time to be 100% invested, even in strong sectors.

The bond market is also interesting. See our bond trading model, on our energy page.

There are some interesting stocks in the health care and energy areas, as well as our Fallen Angels portfolio.

Our ETF trading systems have been adjusted with our utility trading model finally getting a wake up call. See the energy section for details.

Remember, our Fallen Angels portfolio is designed for those seeking a potentially diversified portfolio with a longer term time frame, and offers both long and short recommendations.

Check all our sections daily. See tech, biotech, Fallen Angels, and timing systems for the latest adjustments. Our ETF trading systems for energy, Spyders, Small Caps, and technology have also been updated.

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Disclaimer: The financial markets are risky. Investing is risky. Past performance does not guarantee future performance. The foregoing has been prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable, but there is no guarantee that future results will be profitable.