[isatrader]

With the multiple breakdowns in the individual stocks today (Tuesday 8th) and market breadth negative signals building up, I personally think it's time to shift the focus away from Stage 2A breakouts in the investor watchlist and start looking for potential stocks to invest in that are already in early strong Stage 2 advances and beginning to pullback.

There's a saying that I've heard before that says "what was first will be last," and I think this is appropriate as that is very much what we saw today with the strongest sectors of late getting hammered by profit taking etc.

The method is about focusing on the strongest and weakest sectors for longs and shorts respectively, and as we are still in an uptrend overall, I think that the current sell off could provide some opportunities to get into some of the better Stage 2 advances on a pullback in the comings days/weeks. And if the selling intensifies, and the markets look to be breaking down into Stage 4, then we'll need to focus more on the short side of the market.

So, one of the strongest sectors of the last six months has been the Shipping sector, with multiple breakouts into Stage 2A, that have run sharply higher on heavy volume. Multiple examples have been brought up on the thread by members like EGLE, DSX, BALT etc, but the one with most impressive volume has been DRYS, whose volume built strongly week by week over the last few months, as it moved around 70% above the Stage 2A breakout level without a single significant pullback. However, a more significant pullback looks to be beginning now and so I have highlighted the pullback zone that I'm targeting between 2.83 and 3.10. But that could be well off, so the price action will guide my decision ultimately, as to whether there's an entry point or not. In the mean time, I'm going to spend some time searching for more stocks from the strongest sectors that meet the method requirements and would make good pullback buys. Attached is the charts.