A nice last hour of the day made for a nice close near the highs of the day for all the major market indexes. Volume was lower, sadly, indicating a lack of institutional investors willing to put money to work. I am sure earnings season has something to do with this.
The very short term trend has turned up but besides that there is not much else bullish about the overall market. Even with bearishness creapin higher, volume is lacking on the upside and breadth is still very poor. With that calling for a bottom here seems way too premature.
Down days on higher volume followed by rallies on low volume is not what you like to see if you are bullish and looking for a meaningfull bottom. Normally the last leg lower will have lower volume and the subsequent up days will have very noticable increase in volume (think March 2003 bottom). Until I see that it makes it hard for me to think any solid bottoming is actually happening currently in the market. We still need more bears in the market, however we are down quite a bit and a relief rally is deserved.
Since it is day four into the most recent rally attempt, we have to now look for a 1.5% move to the upside on an increase in volume. If that happens it will be safe to start looking for great stocks breaking out of great bases. Until that happens, keep cash heavy incase we reverse to new lows.
The markets can follow through out of nowhere. You never know what it will do tomorrow, so stay on top of leading stocks in leading sectors and take your cue from them.
Have a great Tuesday. Goodnight.
New Swing Longs: HOM ALO OXM AH WBMD FWLT NT CAMP
Longs Outperforming Market: KNOT PRLS LWSN BRLC AKAM GES BCRX TSAI THRX
New Swing Shorts: OMI
Shorts Outperforming Market: GPRO QGEN IPCR
Small Stocks On Radar Screen: AKN KNAP
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