We have been noting that Tech, for example, is 100% intact to its daily, weekly and monthly up trends. As I hold a big chunk of QQQ off of the media’s ‘RIP Big Tech’ style headlines and that intact trend status, I am also short less prospective areas.
While I am long some Medical Device companies and a couple Biotechs, we have noted in NFTRH that general Healthcare is both of those areas plus Pharma/Generics, Insurance and services of all kinds. It’s a big, fat amalgam that I’ve had no interest in from the long side since before XLV even hit our long-standing (from 2016) upside target of 88.
I have not decided how I am going to handle portfolio composition if the ‘M’ double top scenario starts imposing its will on the market. I may just hold shorts like my current one on XLV even as they go against me while longs keep me balanced and bull biased or I may try to get cute and lean into that bounce, if applicable by reducing shorts. I mean, I wouldn’t particularly enjoy riding XLV short beyond a fill of the March gap down.
On a more immediate view however, XLV is a piece of garbage below the noted resistance line. The market is playing to our bounce script and it will be interesting to see if it can take out the SMA 200 and that resistance. Sooner or later if the market keeps correcting all that Trump/China/Trade War hype it’s going to drag the sludge up with it.
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