Market Wants To Rally – Rotation Back Into Tech Will Be Great Opportunity

Posted 9:30 AM ET - Yesterday the market surged higher and it reversed sharply in the first hour. We saw heavy rotation out of tech stocks and into cyclicals. Prices firmed up and the market finished in positive territory. We are within striking distance of the all-time high and I believe we will break through in the next week or two. Republicans control all three branches and they will be able to implement their plan. They are scrambling to prepare the framework so that Trump can act quickly when he takes office. Lower corporate taxes and reduced regulations will increase profits. That is good for the market and this backdrop should overpower the rate hike in December. Down opens have been very good for us. I will wait for market support and I will be scaling into long positions. Cyclical stocks might still have a little gas in the tank, but we will see a rotation back into tech. This will present an excellent tech buying opportunity in coming weeks. Use SPY $217 as your guide. If we are above it, focus on the long side and use that as your stop if we fall back below it. In the event that the market continues to drift lower, wait for the first hour to pass. Use the low of the first hour as your guide. If we are below it, focus on shorts. If we rally back above the first hour low, focus on longs and be prepared to increase your size if we also rally above SPY $217. If this does not make sense to you, sign up for the free trial to my chat room and you will get the play-by-play. There is still some market volatility that we need to get through, but the bias should be to the upside. The market has been in a very tight trading range since July. The longer and tighter the trading range, the bigger and more sustained the breakout. Seasonal strength will provide a tailwind. Wait for support and focus on the long side today. . .

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