The Santa Claus rally that everyone wanted and did not get helped set a base up for today's strong rally. I just want everyone to remember I pointed out that selling off during this time of the year was very bullish as long as we rallied on big volume after the holidays. The down days in December helped bring out the bears and as each day went on the bears got louder and louder. However, at the same time, as they got louder volume got quieter and quieter. That, inevitably, set us up for today's strong rally. Now to the facts.
The markets rallied across the board today, with the IBD100 up 3.3%, NYSE 2%, Nasdaq 1.7%, SP500 1.6%, and SP600/400 1.5%. The NYSE also closed at an all-time high; that is, of course, very bullish. Along with the NYSE at all-time highs, the Nasdaq bounced brilliantly off the 50 day moving average. Volume was much higher than anything seen during the vacation period and was well above average with around 2 billion shares coming across both exchanges. So on a technical price and volume basis, the market had a fantastic day! What a way to start the new year, after that December lull.
Investors can thank the Fed for the market rally. The rally started after the most recent minutes were released and showed that the Fed may be done with rate hikes soon.
My santa claus selloff followed by a nice January move higher is so far working itself out better than I ever could have expected. This was the opposite action of what most people wanted. Why, I will never be sure. Rallying during the holiday season on low volume gives way to high volume selloffs like last year. The opposite is better and that is what we got.
There are some very nice long bases out there in individual stocks to help propel a good rally. However, the bears are still declaring this just an oversold move that will be sold soon. Excellent!
New Swing Longs: VTS STD BGO TCC LFL SPSX THQI FAC RESC
New Swing Shorts: NONE
Longs Outperforming Market: BOOM-343% GMXR-158% MFLX-142% RBAK-110% PETS-88% EMKR-88% BBD-86% NRPH-72% SYKE-71% THOR-70% SUPX-68% GGR-67% ELTK-65% AAPL-61% CBG-61% NWRE-60% CVO-57% AUY-56% MSCC-55% MIDD-48% OXPS-48% GRS-43% ECLG-39% AAI-39% BNT-38% SLW-33% NXG-33% VGZ-31% TRAD-30% AKAM-30% DEZ-29% ONT-29% CRDN-28% CIB-28% KGC-27% RADN-27% VSEC ALY FFIV TESOF NEM PNRG AU LOGI KEYS BBBB NNDS NMR SAY ENER RVSN CTXS DSGX PAY SXC ANST WOOF JBL BEAV TLEO VIMC DHT AATI DROOY MRB ALKS TFSM AVN GBN ADBE EFII BKHM TOMO UBS ING MEL DB BAM APLX
Shorts Outperforming Market: VRNT CECO
Stocks On Radar Screen: OVTI YHOO ONXS KFX STX ENG XNR CAMT
3 comments:
Hey, I was curious about your thoughts on the base CMED is forming here and a possible buy point? Do you throw the reversal day out the window, or do you factor that in? I'm thinking if it closes above the $36-37 area, that would be a possible buy point. Thanks in advance and keep up the good work with your blog. I enjoy it.
It is funny. Whenever "everybody" is leaning one way, the market comes along and pushes them over. It did that last week when "everybody" was expecting a big surge between The Winter Holiday Event That Occurs on the 25th of December and New Years. Now, "everybody" was expecting a January crash, recession, Armageddon.
It's early, though. We shouldn't get so giddy too early. The market won't be kind to us if we get complacent!
CMED is an awesome stock and company. I would think it would make a great swing long investment coming out of this base. You have to factor in the reversal day, no matter what. Especially one as obvious as the one on CMED's chart. However, I will not be buying CMED solely based on the reversal day and the current sloppy base. The base has some good and bad characteristics in its base and that is enough to keep me away from it. CMED, however, should be much higher than where it is if this rally has legs.
Thank you for reading and for the compliments. I really appreciate them. :)
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So true, Muckdog.
Right now the AAII is showing 40% bears to 29% bulls. So it was obvious they were leaning to one side.
However, once again, you are right in that we should not get to giddy with this rally. But I am never complacent. Trade the same way everyday, cut losses religiously, and always know where the market is at RIGHT NOW. We don't NEED to know where it is going to go, as long as we know where it is at right now. Taking action accordingly to what happens the next day is a lot healthier to the bottom line than trying to predict the future. That is a fool's game.
Great luck everyone!
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