Stocks Pullback On Lighter Volume, On Yom Kippur.

Despite positive numbers from the SIA report showing semi sales jumped 10% and oil dropping 3%, stocks instead focused on the weak manufacturing data and closed lower for the second straight session. It could have just been an absence of bulls out there on the Yom Kippur holiday but no matter what the reason was stocks finished lower.

At the close techs and small caps led to the downside with the SP 600 falling 1% and the Nasdaq falling .9%. The big cap indexes did much better, with the SP 500 closing down .3% and the Dow Jones Industrial Average closing .1% lower. The IBD 100 lagged the big caps again but outperformed the small cap and tech indexes showing that a rotation into new leaders might finally be showing up.

Volume was slightly lower on both exchanges today. This was odd because many market talking mouths thought volume would be much lower; this includes me. Breadth was negative on the NYSE by a 6-to-5 margin and negative on the Nasdaq by a 2-to-1 margin.

The major stock indexes pullback on lighter volume today is a positive to see after the gains of last week. The count of distribution days is also about ready to get some relief as a couple of the distribution days from the previous month will come off the count by Friday. Currently there is 3 in the past four weeks. Not bad, considering the markets are higher since all the distribution days.

There still is some weak leadership out there. The rotation is slow but all the bases starting to show up along with all the stocks that I am long that have broken out and continue to make small gains indicate it could just be taking a while for a solid rotation to take place.

The IBD 100 is still not leading the whole market but it is outperforming small caps, as was mentioned above. So the quality of stocks in the IBD 100 are rising along with this market. That could set it up to start leading the market, should the market continue to rise.

There are still plenty of fresh longs even with the market being down the past two days. I was not getting that before from May-August. Now on down days I am getting plenty of stocks that are coming out of very green and pretty bases. It doesn’t mean they will all work but the fact that they exist now is proof enough that this market is in much better shape than it was in August.

Inside I still want to be bearish with all the possible indicators that are showing me that this rally is not the real deal. But the facts remain that this market has been going higher and is in a position for more gains. Until all those green, pretty, and uptrending charts turn into ugly charts there is simply NO reason to be bearish. This isn’t the best market but it sure as hell isn’t a poor market to make money in either. The only way to be missing out on this rally is if you are letting your opinions lie to you into not believing all the breakouts I am posting at IP everyday.

The markets should see some pressure tomorrow from MRVL. But that stock has been a laggard since May. Anyone still long that POS needs to take some IBD lessons on how to sell stocks and cut losses.

With that I wish you well. Stay positive, mentally strong, physically fit, get plenty of rest, cut your losses when your stocks don’t rise, and I will see you at Investors Paradise.


New Swing Longs: NOVA DLA HOTJ MCDT VCP NOC PHRM SUAI RIF

Adding To Existing Positions: CPAK IIVI

New Swing Shorts: NONE

Longs Outperforming: ZONS-43 INPH-41 MWRK-26 BAM-43 BITS CPAK IIVI HSR RICK CTCM LWAY GROW LMT APLX DKS RSTI DUCK CPA IDXX ROG BW SIMO BEBE EMS BMRN SVNT AUXL NU ETR NWL STZ RMTR SMP AXTI

Shorts Outperforming: HYDL-19 CPE-20 WTI KMP NGS KMR IXC SM TTI MDG TDW ATPG

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