The markets kind of had two different heads on it today. One in the Big Cap arena and one in Small Caps. The SP500 and Nasdaq finished down .1% with volume pretty much flat from the day before. However, weakness was obvious underneath as decliners beat advancers around 8-5. The negative breadth is something we should be keeping an eye on as the ratio of decliners and advancers was so negative while market did nothing that it is an eyebrow raiser.
The weakness in the NYSE and Nasdaq really showed up in the SP600. That index was down 1.1% while volume expanded. And looking at my small cap longs I can see that the charts are starting to lose that pretty green look to them.
Still the market is still in a nice uptrend since the rally started and we have barely had any distribution days. So, hopefully, that means this is only a short term pullback before another sustained move higher. The negative divergences I have on my Index charts (TSV, BOP, moneystream, etc.) makes me think it is just a short term negative pattern. No matter what it is just make sure you keep your sell rules very strict and disciplined.
I am still bullish long-term but feel somewhat cautious in the short-term. But, for now, all trends are up in all time frames for the DOW, SP500, and Nasdaq. So I will remain bullish, even though I really did not like the action in Small Caps and the SP600 today. I also had a couple of stocks blowup. So check that out. No one is perfect. That is impossible.
New Swing Longs: PRTR
Longs Outperforming Market: BMD-336% GMXR-151% CERS-139% VRTX-111% PETS-87% IVX-67% HHGP-63% CBG-51% TSCM-33% ELN-29% LDSH-28% TEVA-28% GGR-26% Q-26% AUY-25% BSMD TFSM SAY PNRG VSEC PAY ORA ARDI STXN TLWT IT GHM
New Swing Shorts: SYD ATMI ATVI CERN
Shorts Outperforming Market: ASR
Disaster of the Day: KOSP....Ouch!!! SMSC sucked too but that is only a .50% loss since entry.
Stocks On Radar Screen: UACL AVAN NATI TLF SMXC
3 comments:
I was wondering how much thought do you give to leaders starting to show weakness as a sign to be on alert for the overall market. The past few weeks, it seems like more leaders are breaking trend lines and or showing general weakness(examples: SNDK, CERN, NWRE, HANS, CUTR, NDAQ, NTRI) Or are some of these charts not as bad as I think they are?
Also with the Naz struggling here while the Dow and S&P continue to do all right, is that a sign of possible impending trouble?
What is your time frame for "short-term"? Just curious.
Thanks in advance for your comments. I really enjoy your blog and continue to learn a ton.
HANS had a very large run up, then recently it turned around and today is about to close under the 20 dma with the 50 dma all the way down at $64. Is this a sell here or do you think I should still hold on?
You give it a thought, but if you see other stocks that are leaders still acting fine or see a new batch of leaders in other sectors climbing the charts I wouldnt worry too much.
You need to see more distribution days on the indexes. And to be quite honest, it doesnt seem like sellers are taking too much control. That could change very quickly but until it does I am not putting too much weight into these stocks acting funny.
It isnt like any of the charts mentioned are fresh breakouts anyway. All have had a big run and need to pullback or breakdown. If these were just breaking out of fresh first stage bases then I would be worried.
Nasdaq and SP change leadership roles often. But normally if big caps start outperforming small caps it is in the last stages of the bull market. This bull market has been long and strong, since 2002. Unfortunately, for most people I know that don't follow stocks they think we are still in a recession or bear market. Since the only TV they watch for their market news is CNN, I guess I will thank the media for not reporting this great economy thanks to their disgusting liberal (I-Hate-GWB) bias.
It would be nice to see the facts and figures reported on screen of the GDP, unemployment, house ownership, stock ownership, tax receipts, outsourcing, and any other economic guage they turn into negative news, on CNN. I wonder why they don't put the actual historical and current data on the screen while they are reporting how terrible the ecomony is????
Sorry for the tangent. I just think the reason everyone thinks this rally is the one before the "crash" is because the fricking newspapers and major news networks never highlight the postive and only highlight what is wrong with the world. If it bleeds it leads. The morons at CNN, ABC, NBC, CBS, PBS, LA Times, NY Times, and Washington Post need to wake up to the facts of what a free trade, low tax, democratic society does to help the poor become rich. It does a lot and in no other form of government can the poor become rich. NONE!
my tangent for the month
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Sell some HANS and hold some. You definitely should be taking some profits, with the recent price action, no matter what. For a stock that is up 3700% since the market bottom, it might be time to sell. I mean seriously how many more ways can you spin an energy drink, expand margins, and continue to grow market share when there are so many in the business now.
Great questions guys. Both of you are very very observant and on top of things.
I just would not worry too much about market until it actually breaks down, since we have not had a lot of distribution days on the indexes yet.
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