Karpel’s Corner: When Will the Deere ($DE) Catch Up With the $CAT?

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The S&Ps ($SPY) have hit all-time highs.  But this run for the last two weeks, while impressive, does not have the bullish conviction of the pops to the upside we saw early in year. If we don’t get some upcoming sessions to the upside with some conviction, it would definitely be a flag and warrant some concern. Tradespooners would only be looking to add stocks that have a score of 10 or greater in both the short- and long-term trend analysis.

On the Commodities side, specifically the Grains ($JJG), things have at least started to firm up.  We’re seeing a stall in the deep slide we’ve seen all summer. A move to the upside would be a catalyst for farm machinery manufacturer Deere ($DE). We have $DE with a short-term trend score of 8 and a long-term score of 7.  So, at this stage, we would be relatively bullish on $DE for the next 50 days with ~36 percent of the stock being above ~$87.30 over the next 50 days. This could potentially be a good candidate for a bullish vertical spread in October. But we want to see the stock and the Grains get more of a push to the upside before we would commit much capital to a trading idea.

$CAT has been on a tar lately, with the price action filling that downside gap back in July. We have the short-term trend score at a 9 and the long-term trend score at 8. We are bullish on $CAT. The latest Construction data, out earlier this week, only further catalyzes this recent move to the upside. 

Make sure you join me today at noon for a webinar on the importance of fundamentals. You can register here: http://www.tradespoon.com/webinars.php

See you next time at the Corner!