Wednesday, September 20, 2006

Fed Holds Rates Steady; Stocks Stage Another Impressive Rally.

Erasing yesterday's losses, stocks gained ground with good news all over the place. ORCL, MS, oil falling another 2%, and the Fed holding steady at 5.25% were just some of the headlines grabbing attention as this rally unfolded. A small dip after the Fed meeting even found buyers willing to support stocks.

At the close the Nasdaq led the advance with a 1.4% gain, the SP 600 followed with a 1% gain, the Dow Jones Industrial Average rallied .6%, and the SP 500, hitting 5 1/2 year highs, rallied .5%. Leading stocks in the IBD 100 lagged the Nasdaq with a .9% gain.

Volume was higher on both the NYSE and the Nasdaq. However, on the Nasdaq, once again, it was one stock's trading (ORCL) that made up the bulk of the volume increase in the average. Breadth was positive on the NYSE by a 2-to-1 margin and on the Nasdaq by a 4-to-3 margin.

Today was another very good day in this rally. The only thing a bit troublesome was the lack of Semiconductor stocks joining the rally along with the IBD 100 lagging the Nasdaq. If the semis join a bit later I will feel a lot better about the rally continuing this far along into it. What are we up like 20 days out of 26 now?

This uptrend is solid and the rally is really doing well considering all the poor news that was thrown at it the past three months. The trend is your friend and the trend is up. I don't think it is wise or prudent to expect things to change. At this point in the rally any pullback will probably now be a place where underinvested bulls will try to put money to work.

There are a ton of nice bases setting up out there and plenty of my longs during the past couple of months are in possible positions to setup even prettier bases to have some nice breakouts. As long as I keep seeing these kind of green charts I am going to embrace this trend.

I am getting ever more long everyday, obviously. I am bullish in the short and intermediate term. With all of the pretty charts I am long you might think that I wish I was long more of my pretty stocks. No. I am long enough. I stuck to my rules. I can add to the nice ones constantly and be happy knowing that I am protecting cash just in case this rally doesn't hold up. But if this rally keeps going I am obviously going to put all my cash to work. For now I still don't think going on FULL MARGIN is wise.

With that I will see you tomorrow at Investors Paradise!

New Swing Longs (you need to be extremely careful w/ ALL of these): SYX PZA GEO SIMO IONA CPAK BULK

Adding To Holdings: CHINA ABCB MDRX

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): AKAM-189 CVO-137 IHS-58 MA-33 SYKE-38 TYL-37 Q-93 DA-35 VLG-36 MWRK-25 CXW-28 AVNC-68 BEAS CPA VTIV HCSG IIVI CHINA ABCB TWGP HEI CTCM VARI PSPT NITE AHS INPH RSTI BTJ BMC SEIC DDS TDY CACB ROG ORB RNST IDXX IMKTA BEBE ISYS SXCI LMT GROW DKS DGX HURN PRFT XING RAH VOLC BRR EMS MEH ISIG MDRX MFA FCSE GISX NU MO SZE

Shorts Outperforming: Later

Stocks On Radar Screen: GIL OATS ANF AGE CR TRLG GS SIMG VOCS CCOI BONT KBAY NFLD LVLT NSTC SCI PME VTO

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