Tech Leads The Market And Not Chasing Overextended Stocks

Happy Memorial Day to all NBT readers!

In this video I discuss the weak breadth that has occurred across the stock market since early March 2017.  Weak breadth means that less stocks are participating in a market rally, which means that it’s harder to find a stock that’s outperforming the market.  The market so far in 2017 has been led by large cap tech stocks and by the semiconductor industry groups that have been in strong Stage 2 uptrends since the middle of 2016.

In the second part of the video I go over the importance of not chasing overextended stocks that are far away from the 30-week moving average.  This can lead to losses and occurs because traders lack discipline to wait for a better buy point after the stock has consolidated for a while.

Interview With FinancialSense On Stage Analysis And Leading And Lagging Markets in 2017

Last Thursday I had a great opportunity to interview with Cris Sheridan of FinancialSense.  In the interview we discussed the following:

  • 2017 has been dramatically different than 2016 in terms of market leadership and breadth
  • Currently the market is being led by semiconductors and large cap tech stocks
  • Small caps continue to lag large cap stocks
  • Commodities and cyclical stocks have performed the worst in 2017 after leading the markets last year
  • Foreign stock markets are outperforming the S&P 500

Since early March I’ve been noting on Twitter that the breadth of this market has been weak and therefore it’s been much harder to find winning stocks this year than last year.  This is definitely a stock picker’s market so far in 2017.