Hoping this message finds you doing well!

Today, we have a few developments to consider. It looks like we may get a signed infrastructure bill in the Senate at some point this week, as Congress wants to get it done before their August recess.

The $VIX has captured my attention today, as it is higher by approximately 6.25%; with the $SPX higher by ~0.17% the last time I checked. When I see divergence like this, it always makes me curious as to what may be around the corner.

Let’s be proactive looking for a GRID exit here today.

Figure 1 -First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) Daily Candles April 9, 2021 - August 2, 2021. Source stockcharts.com

Let’s look to the $96.45 - $96.75 level today for an exit. This exit can be viewed as “selling the news” even though we don’t have the infrastructure bill signed just yet. Since we have the $VIX rising today, with a slightly higher $SPX, I’d prefer to be out of this one if we get a broader market pullback, and then the infrastructure bill is signed. These are my thoughts today on GRID. It has done very well since our first mention of it in the May 6th publication near $86.91 and $88.17.

ERTH No changes here. Hold.

TAN is higher today so far by approximately 0.50%. I like the price action and consolidation, plus the way it traded near its 50 day SMA. Hold.

IYT (short) is slightly lower by 0.09% the last time I checked. It seems to be consolidating for a test of its recent lows near $245.48. For now, let’s keep working limit orders to cover any short positions at $243.01.

Thanks for reading today’s Stock Trading Alert. Your readership is valued and appreciated.

Have a great afternoon!

Thank you,

Rafael Zorabedian
Stock Trading Strategist