After Friday's rally, the market triggered a new technical uptrend.
The Nasdaq Composite had a second accumulation day after the the low established the 6th of June which indicates that some buying pressure is entering the market and a new uptrend is emerging.
We didn't have confirmation from the S&P 500 with another accumulation day. Also the Nasdaq Composite and other indices will be facing stiff resistance of important technical levels and the 50 day moving average.
The buying pressure, looking at the internals through the market monitor, is still weak and thus the strong hands are not buying agressively yet.
This lowers the probability of having a true uptrend and makes the trading of break outs harder.
There are some good setups in leading stocks. I really like the setups of TCBI, ROST, UA, ULTA, ALXN, AME, CMCSA, JBHT, N and HUB.B.
For index ETF's, URE looks great.
But let's don't get too excited yet. The market is filled with land mines at the moment with the ongoing Euro crisis (which is far from over) and with the very weak US economy which continues to show very bad macro data.
The last 6 recessions have started with a similar slowdown in the growth of the personal income. The US economy in recession is in my opinion not discounted by the market at the moment.
We have on Wednesday the FOMC meeting in which the market is putting high hopes of a new QE program. If this occurs it would be extremely bullish for the market.
However, if we don't get a new stimulus, the market may quickly turn south and terminate the new uptrend as the economy will get no help to steer it away from recession.
Dip in slowly in the market. Things are tricky at the moment and a lot bad things could happen.
Use small a position size, don't go all in.
We will probably do some buying on some of the stocks mentioned this week so be prepared to receive some buy alerts.
Again, the buying will be light and the stops tight until we get less uncertainty, with the market confirming the new uptrend with positive action.