For the second day in a row, even with retail sales falling in September and disappointing economist, stocks defied the odds and rallied on lower volume.
At the close the SP 600 led to the upside with a .6% gain, the Nasdaq followed with a .5% gain, the SP 500 rallied .2%, and the Dow Jones Industrial Average managed a positive close with a .1% gain. The IBD 100 kept up with the top indexes producing a .7% gain on the day.
Volume came in lower on both exchanges and breadth was positive by a 3-to-2 margin on both exchanges.
For the week, the big winner was the SP 600 with a 3% gain, the Nasdaq also scored big gains with a 2.5% rise, the SP 500 rose 1.2%, and the DJIA rose .9%. A very good week for the bulls, to say the least. The best news came from the week came from the SOX index and the IBD 100. Both are showing combined leadership in this rally, with the SOX up 4.4% and the IBD 100 up 2.3%.
The awesome action in LRCX and the very pretty well formed base being built by the Semiconductor index has to be seen as a very bullish development. What could make it get ugly? The base in the SOX reverses. That would be a failed breakout and very negative. However, I see TONS of beautiful green charts in that sector so my money is on the SOX breaking out.
Even with the lower volume, the gains still look the same to my portfolio. Volume was running higher most of the session till the last hour, anyways. It appears that traders just decided to step out early and get an early start on the weekend. As everyone knows volume is normally a lot heavier in the final hours. On Friday, traders checked out early. Could it have been because of the Mets game? Who knows.
Another positive that can be taken away from this session is that we closed near the top levels of the day and on the DJIA did close at top levels. This shows that even with the low volume, stocks are being bid up and forcing shorts to cover. It still is not looking good for the bears.
Leading stocks did well but still are not completely leading yet. Keeping up with the SP 600 and Nasdaq is still very bullish. As long as this top index keeps getting fresh new candidates placed in the index and those candidates keep setting up, breaking out, or are doing both, I will be happy with this current rally and keep looking for long setups.
As long as this uptrend remains in play, it seems very silly to me to try to predict a top and turning point. The smartest thing would be to take your clues from individual stocks and the indexes. If the market starts flashing distribution days and you notice all of your stocks violating key bases, then it might be time to protect yourself and raise cash. Until that happens, don't fight this trend.
Get ready for a busy week full or earnings. It is sure to be a fun wild one, like it always is.
I will see you at Investors Paradise. Aloha!
New Swing Longs: CY AWH ???? ADBE OLAB APN GTSI VVI JST
Adding To Positions: TSRA SVVS ELOY
New Swing Shorts: NONE
Longs Up On The Day (low vol, non-IBD, excluded): CPAK-30 RMTR-32 MEH-27 CHINA-25 CVO-131 CTCM-30 MWRK-36 TYL-45 AKAM-217 IHS-76 OMRI-47 STEC-40 SYKE-42 SOFO-29 BITS HMSY BOT UAHC SIMG MPW TWGP IMA DIOD APLX ACGL SMSC DECK NSTC FBNW KBAY HURN CAB DLA BONT NITE INAP BEAS PERY BEBE AHS DUCK PSPT HRZ ROG SIMO LMT HOTJ ALXA CBF SUMT LYG SUMT TSRA MCTD SVVS REGN PCTI MNG BRLC ALSK IDEV MYE TIBX GISX AIQ GILT OPSW CMCSA MOS SMP ELOY
Shorts Up On The Day: DDE-19 KMR ARLP
Cover Shorts Completely: NGS NTE
Stocks On Radar Screen: NVEC LRCX GETI SPSX CVGR MCRS PCBK SIGM NEWP DPL ATRM EAR
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