The market is getting somewhat oversold, and we WILL get a pullback at some point. WHEN the pullback comes a short term trader could enter positions in strong stocks, if keeping in mind that the 3 month longer trend is down.
We will get a pullback and test the 1400 level in SP500. If we get that far, or if we even go through it - only time will tell.
For now it seems like we are in the rally we were anticipating earlier. How long it lasts, or if this is the beginning of a larger up - nobody knows.
KORS is an interesting stock for an upmove. It gapped earlier this year and we have now tried to close that gap, but failed. Instead we had a Wyckoff spring at the 48 level. On the P&F chart this reversal is happening at the exact level of the 49 top earlier this year.
AAPL is again becoming interesting. A stock that has been in the highest number of funds, with funds then wanting to get rid of it, securing profits, as we have seen in the downtrend. We now had some stopping action with the reversal on Friday, and now a big up move. Potential selling climax and automatic rally, as Wyckoff traders would call this. The next pullback would probably provide a great risk/reward position if the selling climax holds, and also a break out above the current rally.
If the test of the selling climax does not hold, and we again see downside in the market. Then it is another story.
It is always interesting to see the big picture of the market on a weekly chart of SPY and weekly 5 point figure chart of SPY.
We are actually in a clear uptrend, had a pullback, that did not reach the lower trendline in place since 2009. On the short time frame trend line we can the higher high turning roughly at the level of this trendline.
On the 5 point figure chart we are in an uptrend, have broken a downtrend line and have a rising 45 degree trendline at our support.