After last week's big turnaround, we saw follow through all week in the broad market as the S&P closed the week out above the illustrious 4000 number at a new all time high. The market, very broadly speaking, is still in grind up mode until we see something drastically change. We have continued to see last year's losers lead the market, namely financials, industrials, energy and utilities. We did get a big bounce back in the tech space which has not been nearly as strong as its counterparts, coming off a year that saw the QQQ index lead tech names to a ~30% gain.
We're seeing week in and week out how important it is to recognize a changing market's characteristics. We're sitting at all time highs in the S&P and Dow Jones, but the road to highs has been much choppier than the path we saw last year. The important part of this recognition is how differently names are trading this year, where you could get away with buying any breakout and making money last year, to this year where you have to be much more tactical in both your name selection as well as trade setup selection.
On a shorter term trading basis, QQQ had a huge 3 day run off support, I'm anticipating a pullback early in the week to recent resistance areas as it looks to retest those areas. It held an immensely important support area last week and launched higher, telling us the buyers remain in control. But this week I'm looking for those buyers to step up to form new support. The SPY and the Dow Jones are cruising along and look very healthy from a technical standpoint. Buying strength has not paid nearly as well as buying in the hole this year though, as we saw last week. So walking into the week in the context of last week's closing strength, I would anticipate to be more active in the latter half of the week as many names likely need some sideways action.
Other than that I want to limit myself to the best ideas and best acting stocks out there. This is not a time to have a shotgun approach with risk. This is the time to lock in and find the best Easter eggs.