Emerging Themes

The last few days I've talked about how I believe there are some excellent trading opportunities and the chance that there is a group theme emerging in the defense stocks.

Well, all of a sudden, most of the great trading buy points have been bought up.  Let's walk through a few thoughts and what to expect if we think a group theme is emerging.

First thing is first.  You don't know with 100% certainty this is the case.  You never do.  

If one of these themes emerge, the opportunities keep coming for some time.  You could say this theme really started in Mid-late October when LMT, RTN, NOC and company all broke to new highs ahead of the market.  

in an emerging group theme, the opportunities keep coming. If it is one, the opportunities will show themselves. There is no need to chase

We're looking for leaders to:  

1) pullback on lighter volume
2) see flat longer term moving averages start to rise

We're looking for laggards to: 

1)  bounce at key supports 
2)  form bases and eventually breaking higher

What we need to do:

1) be patient
2) consistently monitor the price action in the group
3) evaluate whether action is constructive

Thanks for reading!