Stocks gained ground on Wednesday as a good earnings report from PG helped prop all the indexes throughout most of the day. Sadly, for the bulls, the gains started to disappear during the last hour and a half. However, at the end of the day the indexes were up on higher volume. The bad news is that last hour and a half, while stocks went down, is when the volume picked up at a much higher level than what it was trading at before the selling hit.
The Nasdaq and SP 600 led to the upside with a .8% gain, the Dow Jones Industrial Average rose .7%, and the SP 500 rose .6%.
Volume rose on both the NYSE and the Nasdaq. The caveat to this, once again, is the fact that volume picked up as the selling hit the tape. Breadth was positive on the Nasdaq by a 18-to-11 margin and the NYSE was positive by a 2-to-1 margin.
Even after today's gains, there are tons of ugly charts out there. The stocks moving up on my scans are ugly. They breakout from wild loose patterns and make some crazy gains, then dip like a rollercoaster right back down just to fly right back up. Another classic of a lot of these charts is also that they are selling off on HUGE volume on the left side and then rising up the right side and breaking out on lower volume than what was had on the selloff. This with all the shorts that are coming in my scan that are in a position for a trade on the short side indicates that this rally is still too weak to be "the rally." It is simply still all wrong.
Look at the IBD 100. It was up only .3% today. Leading stocks are supposed to be LEADING the market in bull markets. This lagging shows that the market is being marked up and not accumulated.
After all this random action, and having the lows put in by the Nasdaq in July, we still have not had a follow-through on the indexes. Remember, the Nasdaq cutting below the June lows erased the confirmed follow-through of the SP and DJ. We could still get a follow-through but this market acts like it is not finished with the downside yet. However, the only thing for sure in the market is nothing.
I am sure there is going to be more of this action before the Fed meeting. So stay patient, keep sitting on your hands and cash, and if you must trade keep it small and take profits quick and cut losses faster. If you decide to daytrade, LOL, let me know how that turns out.
Great luck out there I will see you tomorrow. Remember the short-term and sub-intermediate trend is up on all the indexes, the Nasdaq is in downtrends in the intermediate and long-term time frame, and the DJ and SP is down in the intermediate trend and up in the long-term trend.
New Swing Longs: IMA MA
New Swing Shorts: TZIX BEC SBL IART FOXH HSY
for more info and charts on longs and shorts, go to Investors Paradise.
Longs Outperforming: AKAM-142 KNOL-169 TFR-108 USEY-58 DSGX-52 PMTR-78 Q-90 VLG-52 BAM-34 DA-29 GPIC-35 CTCI-72 TYL-26 FORR WNR LMT BOT SEIC RNST CXW TRMA DGX HWAY DJO JTX HMSY MO SYKE GISX DLP ALTH TTG SZE KHDH RMR
Shorts Outperforming: BPFH RES AVID BTH APOL GTRC TXRH OPTN NTE HTLD BLK HCBK WTI DSL X RRGB ARO
Cover Shorts: HMY CI CLX CGX--covered intraday (it was posted on Investors Paradise)
Stocks On Radar Screen: IPSU GSTL GES NVEC WAL AMP HRT CTS STEC
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