Wednesday Report: Bull Markets Everywhere… What’s Next?

It’s now been roughly a week since we saw the breakout of the six point bullish falling wedge in the PM stock indexes. Since the last reversal point low they gained roughly 30% so far, which is a strong thrust, which is what you like to see at the beginning of a new impulse leg.

When a stock or market rallies this hard off the bottom it leaves investors a bit confused as to whether to believe the rally is the real deal or just another short term blip in the down trend. The rally has been swift enough where the low risk entry point quickly vanished and now it becomes a question of: do I just jump on the train and take my chances or wait for a backtest to get on board.

We got our core positions before the top trend line of the bullish falling wedge breakout, so now we can pick and choose and take a position here and there with enough cash still on the sideline to take advantage of weaker prices if we get them. We have 14 positions out of 20 in the Kamikaze Portfolio and 15 out of 20 in the PM Stock Trades Portfolio. In the big picture though, this is still a low risk environment if new all time highs are in store for the PM complex.

Let’s start with the daily chart for the CDNX, which now shows the bullish falling wedge similar to the rest of the PM stock indexes. Monday there was a breakout gap above the top trend line, but a backtest is still possible. There was also a short term positive cross of the red 9 day sma above the blue 50 day sma, red circle.