It was another wild Fed day filled with an up and down and back up move intraday. The FOMC left rates unchanged for the third meeting in a row. Stocks took the news well, with the DJIA hitting another all-time high and the SP 500 hitting six year highs.
At the final bell, the SP 600 led the way up with a .72% gain, the Nasdaq followed with a .5% gain, the SP 500 rose .35%, and the DJIA rallied .06%. The weakness was in the leading stocks, with the IBD 100 falling .09%. Not what you want to see on an up day.
Volume was higher on the Nasdaq and the NYSE, easing the distribution day (if you can call it that) yesterday on the Nasdaq. Breadth was positive on the NYSE by a 2-to-1 margin and positive on the Nasdaq by a 9-to-7 margin.
The gains were impressive today, considering the pressure that was put on the market early in the day. Oil rising $2, GM hurting the DJIA, existing home sales falling 1.9%, and many earnings disappointments were some of the things the market was able to beat back today.
The trouble areas are with leading stocks. Having leading stocks fall while the rest of the indexes rise is never positive and makes me wonder how much further upside is left in the short term.
Speaking of trouble, there are some things that really bother me about this rally. In my scan of longs I am having a lot of closed end funds, REITs, and medical stocks show up. These show up in bear markets. The weakness in the Semiconductor arena also worries me about the amount of speculative money that is in the market. Leaders are still lagging, overall, since the August follow through. By this time in the beginning of a rally they should be leading by a good margin. And the biggest problem: I have not been involved in a rally in the overall stock market for over two months and not have ANY stocks up near 100%. You could say RMTR was close moving 64% in three weeks but I still should have one or two stocks up 100%. I do not.
Does this mean that I am getting bearish? No. The trend is still in a solid uptrend and you see how well the bears have been doing the past three months. This simply means that my caution level has to rise. I am simple confused as to why this market is so slow moving up with the indexes like the SP 500 up over 6% this year. Last October, I had tons of stocks BLAZING by the overall market. This is the first uptrend since April-August 2000 where I have done worse than the market and have not reached old highs while another index has.
If you subscribe to RevShark’s service and follow all the top indexes of IBD, you will see that a lot of momentum CANSLIM investors are not doing well. Small profits are better than no profits but I like having stocks run 100% in two months and like having 5 out of 10 stocks move up 25% in two to three weeks. This rally has been lacking of any of that kind of action.
Yet here we are continuing to make higher highs. We will see what the next couple of days bring. I am not sure how much I am going to be able to contribute to the commentary the next three to four market sessions.
If you are not familiar with Halloween in Lahaina, then you would not understand. I will see you at Investors Paradise. Aloha!
New Swing Longs: AETH CLS HGSI TRT BMTI NEWP DCAI NAPS
Added To Existing Position Intraday: TSTC
New Swing Shorts: NONE
Longs Up On The Day: CVO-130 XING-34 AOB-27 HRZ-35 INWK-29 SYKE-43 DA-41 ABI-33 BRLC-29 CCOI-28 VOCS TSTC IAAC TCHC ISE LWAY SIMG SMSC IIVI KBAY WEBX TIBX HRT LINTA BEBE BEAS VARI DIOD SVNT FELE HCSG TWGP ROG AHS PCBK LTM INAP EVR CAB BMC ORB NITE FTEK NSTC MVSN OMTR MOS OMNI SMP PERY ADBE RWT MYE ETR MNG AYE NU NWL IDEV SCI MDRX BULK SZE SUAI IONA
Shorts Up On The Day: NONE
Cover Shorts Completely: ASA SM
Cut Your Loss/Take Your Profits: DDS NOC FLEX ISYS
Stocks On Radar Screen: APKT ACOR DR ANAD SUNW SYNA TOC
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