Home Stocks Trading Advantage Stocks – Different Reaction

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A little different reaction yesterday in the market place. Not only did we make new record highs across the board, but we actually had breakout behavior on strong buying. We mentioned since last week that the major averages are showing breakout behavior similar to November. We basically confirmed that notion this week. The banks are helping lead the way. Energy stocks are gaining steam. Airlines and rallying back. Tech names are mixed but the ones that are responding to buying are going bonkers(NFLX). It’s at a point where you can’t even suspect that we may have a pullback. This will be the last session of the week and you suspect we should see some risk off trading. However, the buying frenzy may just buy anything that moves lower. It’s almost insane how aggressive the buying has become at these levels. That’s the primary issue right now. You’re almost forced to buy at the highs of you want to participate. That leads to nasty drawdowns if your timing is bad. Buyers have been rewarded all week for buying the highs. They’re getting trained to think it’s okay and this is what’s considered “High risk, low reward” scenarios. Yet everyone is being taught that it’s worth the risk in the end. Your risk tolerance is only getting stretched out and while breakout signals are beautiful, the context of the breakouts are important. Buying at the highs historically is never a good thing. Be careful of such trading behavior moving forward. There is a time and place for everything. Looks like we have no choice for the time being. Open Position: NVDA RH XLNX QCOM NFLX BABA TTWO Stocks to Watch: TWTR CTXS NTAP JBL HLF WFC  JPM MS NFLX WDC DIS SBUX STZ NKE LULU CREE VZ T HOG MON YUM LOW HD LEN TOL FEYE PANW FFIV AKAM


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