Bullish, bullish, bullish. That was the message from a widely followed market pro this morning.
“We do have higher highs coming,” Bennett McDowell of TradersCoach.com said on today’s Morning Market Briefing. “At this time we’re in Elliott Wave 3 on the 60-minute chart, which is the most powerful of all.”
If you’re new to Elliott Waves, it’s the idea that stock moves generally have five stages. There’s an initial move higher, followed by pullback (second wave). Traders like McDowell often wait for the third move, looking for the biggest surge when the rally continues. He thinks the setup remains in effect as long as the Dow Jones Industrial Average hold. (Wave 4 is a second drip and #5 is the final push higher.)
Biogen (BIIB) is accelerating higher, McDowell said in response to a viewer’s question. “Long trades can be taken at any time.”
Lam Research (LRCX) isn’t so lucky. McDowell’s tracking signs of exhaustion in the semiconductor-tool company, and sees the potential for another push to the downside following a sharp drop in the last two weeks. Ditto for the Natural Gas Fund (UNG), which at risk of making new lows after breaking support.
How about crude? This time the picture’s murky because the U.S. Oil Fund (USO) is getting tired following half a year of steady gains. Longer-term, it may double but watch out for pullbacks first, he said.