The market remains in a uptrend despite the talk of being overbought. The scanning to find opportunities become more of a challenge, but they are there nonetheless. The following have been added to the watch list to review and track for potential plays:
Small Cap Index – The S&P 600 index continues to trade in a defined range of 410-426. We hit against the upside this week at 425, but moved lower again into the range. This is setting up for a opportunity on the break higher or lower short term. There is an opportunity to trade the range as well if you like trading. Specifics are on the Sectors-to-Watch page.
Alternative Energy is coming into focus as energy prices rise and geopolitical issues arise. There are plenty of options in the sector with solar energy, wind energy and specialty items. The price of crude rising to $90 per barrel has invited investors back into the sector as well as research money. Specifics are on the Sectors-to-Watch page.
Treasury bonds continue to slide as yields rise. The question mark relative to how low prices will fall on bonds remains the central theme to the sector. There is resistance at the 4.75% level. The primary question is do you short the bonds or look for the bottom and buy? Specifics are on the Sectors-to-Watch page.
Networking is bouncing off support and making a move back towards the January high. Earnings in the sector have been hit and miss. Last quarter Cisco started the disappointment, but Broadcom and Juniper picked up the slack. The sector has continued higher despite those not helping the cause. Specifics are on the Sectors-to-Watch page.
We see opportunities, but equally see a need to manage the risk of the current market environment. We have addressed all the stops on the Sectors in Play table today. Take the time to review and manage your risk currently, but maintain your focus on the uptrend in play.