Another volatile intraday session ended with stocks lower. A plane crash that killed Cory Lidle of the Yankees and hawkish comments from the FOMC helped the selling pick up around 2pm EST. But by the end of the day stocks finished off the lows, closing in the upper portion of their daily ranges.
When the bell rang, the SP 600 led to the downside with a .4% drop, the Nasdaq fell .3%, the SP 500 fell .26%, and the Dow Jones Industrial Average fell .13%. The bad news today was that leading stocks led to the downside with the IBD 100 and the IBD 85-85 falling .7%. The good news was that the SOX index rallied 1.3%.
Volume was higher on both the NYSE and the Nasdaq. That gave both indexes their first distribution day in over three weeks. However, the closes and small point loss suggest that stocks received heavier support than selling as the day went on. All indexes closed in the upper portion of their ranges. Hard to call that a scary distribution day.
It should also be noted that it is normal to see one or two distribution days every two weeks in a rally. It is what happens after those few bouts of distro that matters. If the market works them off, great. If more distro days pop up, then we have to take defensive action.
Breadth was negative by a 10-to-7 margin on the NYSE and negative by a 3-to-2 margin on the Nasdaq.
There was plenty of bad news today: AA earnings, DNA earnings, North Korea, free trades by BAC hitting other brokers, hawkish Fed comments, and the death of Lidle in a plane accident in the Upper East Side. Still stocks did not tumble. In fact, as I keep saying, they finished in the upper half of their trading ranges. Is this all the bears can do with all of this bad news? Yikes.
Financials did the worst today, overall. But an interesting fact amongst those is the fact that the leaders all held up well while all of the laggards like LM and AMTD fell. GS, MS, LEH, etc...continue to climb or pullback on lighter trade. This shows, that underneath, leading stocks are still doing well while the laggards keep falling.
The good news on the day was the SOX index. Seeing this index setting up in a nice cup with handle pattern is very promising. I don't like that it comes from a downtrend but the pattern is looking quite nice. I see a lot of stocks making bottoming patterns and have plenty of leading longs that are ready to make more gains. With the SOX setting up, we might see some more speculative money want to come in from the sidelines, since this is the momentum guys favorite sector.
It is earnings season and everyone should enjoy the fireworks. Not a lot changed today that has not been discussed about over and over. Read the past six post I have blogged and please go to Investors Paradise and read all the post posted today and yesterday. If you do that, you will know exactly what is going on right now. And that is way more important than guessing where we are going.
New Swing Longs: NSTC FLEX BVX CBF
New Swing Shorts: NONE
Longs Outperforming: AKAM-216 HSR-28 INPH-67 OMRI-43 INWK-32 SEIC-25 XING-39 ZONS-66 DA-37 TYL-39 FCSE-38 RMTR-26 BRLC-28 CLEC-51 CAB PRFT APLX RICK CTCM BMC IMKTA SMSC WEBX TDY CHINA DECK SIMG EVR DUCK ICE ACGL IMA BONT MPW FORR DKS PT IDXX HOTJ BMRN PHRM NXL CYBS SUMT NHP PCTI CMCSA SOFO SZE EMS APRO
Shorts Outperforming: DDE-20 HYDL-24 ZRAN-31 CPE-18 WTI KMP KMR NGS IXC ASA SM TTI MDG TDW ATPG
Stocks On Radar Screen: GYMB LRCX MVSN VBAC CKSW SBAC RTEC GLDN SYMC FNM PAE EAR
5 comments:
what do you consider 'leading longs??' is there new leadership now, and if so, what?? i am having a tough time trying to discern what is going to lead the next few months and upcoming year... tia
Do you have IBD? They have 197 industries listed by 3 and 6 month performance. Look at the stocks on the top of the list.
and when you find a great stock you do an IBD checkup and chekout the top 5 stocks. If they all look good then you know you have strong leadership. But if you type in a ticker symbol and yours doesn't show up in the top 5 to 10 you know you have laggards.
I subscribe to the IBD premium products so it is easy for me to find new leaders. If you do not subscribe to a good data service you are only hurting yourself.
Finding leaders is easy using the IBD premium tools industry analyzer.
The sectors that move up the most during the past three six months are your leaders. then you must check the stocks.
thank you!!!
i have been meaning to subscribe to IBD... will do that.
you really know your stuff - i love reading your blog.
your fan,
s
btw, what do you think of the retail sector now? it has been leading i guess.. does it mean that the best retail stocks would be good picks or are they due for a pullback??
do you have a favorite sector for new long positions now?
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