So far this year, any dip below the 50-day moving average (blue line) in SPY has been an excellent time to pick up stock exposure and I am continuing to advocate adding to positions on weakness. However, having a trailing stop loss in place only makes sense given the height of the market combined with the increasing volatility and reliance on political deal making.
Moving forward, I am cautiously optimistic about the balance of the year. As a trend follower, I am always watching the tape and letting the price be my ultimate guide. However, the adage of "buy the rumor and sell the news" is lingering in the back of my mind as we make our way through this choppy month.
My advice is to keep an open mind and a balanced portfolio that is ready to shift in response to any new data that will derail this fresh momentum. A fade from these highs and a break below the long-term trend line may suggest that we are in for more corrective price action.
At the time of publication the author had no position in any of the stocks mentioned.Follow @fabiancapital This article was written by an independent contributor, separate from TheStreet's regular news coverage.