7/14/16 update

Ok, I learned today that the Empire state manufacturing survey is actually important. It’s a survey of over 100 manufacturing CEOs and their report of activity in their company as well as next 6 month projection for manufacturing activity in new York. It seems that when this survey scores consistently above 3-4, the market is in rally mode, such as in 2013 and 2014. I will be watching.

The market has been quite strong recently, many times when you think it should reverse and pull back, it just doesn’t. including when the BOE didn’t’ lower rates today. However, I’m not a big buyer of traditional IBD growth stocks at this point. Indexes are touching major major resistance points that come from the early parts of the bull market and while I definitely think it’s possible to break above them, it will most likely require a decent pullback or at least a decently long consolidation period before breaking out. I’ll stick to being more patient until stocks either consolidate to their MAs in constructive action, then PP upward with good volume and good representation by the leaders.

However, other classes such as commodity stocks, namely steel, coal, and natural gas (and possibly precious metals) I am more excited about. Many of these have been super constructive in their accumulation patterns while pullbacks have been on light volume. They have been powerful movers recently.

I am now long SDRL, CHK, SWN and tentatively BET; and am waiting for pullbacks for YRD, EBIX, FCX, TCK

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