Besides a slight intraday blip off the FOMC minutes, it was another day of gains for the indexes, for the fourth day in a row. The SP 600 is just a few points away from hitting all-time highs and the rest of the indexes keep hitting five year, six year, and all-time highs. Nothing has changed, since Thursday, when it comes to this market.
At the close the DJIA rallied .3%, the SP 500 rallied .2%, the Nasdaq gained .5%, and the SP 600 led with a .8% gain. The IBD 100 and 85-85 index rallied .6%, keeping ahead of the three major exchanges. The biggest winners on the day came from the Airline stocks. The AMEX Airline index rallied 5.2% and the IBD Transport-Airlines index rallied 4%.
Volume was higher on the Nasdaq, marking another accumulation day. On the NYSE, volume came in a tad lower than the day before. Breadth was positive on the NYSE by a 5-to-3 margin and positive on the Nasdaq by a 3-to-2 margin.
Inflation remained at the forefront of the Fed's discussion. The minutes from the Oct. 24 Fed meeting said, "nearly all FOMC members viewed the current rates of core inflation as uncomfortably high and stressed the importance of further moderation." The minutes also said the Fed was less worried that the slowdown in the housing market would lead the economy into recession.
However, all of this is just noise to me and I am putting absolutely ZERO weight on this when it comes to making my trading decisions. Traders can dissect and discuss this piece of news till they are blue in the face but there is no way that this is going to make you a better trader and help you make money in the market. There is only one way I know how to do that. Studying price and volume action of stocks and the major indexes.
Tomorrow's BS story of the day is the CPI and Philly Fedx Index. Traders will blame the market's movement on these two stories but these stories will only serve as the effect of the big boys prior executions before the news is released. Once again, these numbers, are good for the CNBC douche-bags to talk about but they will NEVER make a professional speculator consistent money. It is best to ignore all this BS data. The liberal slanted media is going to spin it negatively anyways.
Less than 15% of IBD's 197 industry groups were lower. Many highly rated stocks reached 52-week highs or broke out past buy points. In earlier rallies this year, such rapid increases were much scarcer among noncommodity growth stocks. Another difference? Many current leaders are of better quality, with higher capitalizations and liquidity. (this is from IBD's "the big picture")
IBD is saying the same thing in this paragraph that I have been saying for a while now. I am starting to have a LOT of stocks zoom out of their breakouts and rack up some nice sized gains rather quickly. None are becoming raging 100% gainers in two weeks but many are making 20-30% gains in a month or so now. If you look below, you will see that I have a ton of stocks up over 25% now. Most of these are buys within the past three months. So if you know how to do math, you can figure out the annual gain on the stocks.
The market is still very bullish and more and more traders are getting bullish on this rally. The II Survey in IBD today shows that bears are getting extremely low and bulls are getting quite frothy. Even I am starting to get worried about how strong this rally is. We really need a pullback to help setup some HOT HOT HOT charts. Until then I will continue to play this momentum. However, I would love to mix this short term momentum with some nice long term chart patterns so we could get some long-term momentum. Stocks breaking out of bases longer than five days are better than stocks breaking out of three-day bases. Three day base breakouts have a much higher failure rate. I like nice long flat and green bases. Those are the best.
I will not be holding my breath for a pullback but it wouldn't surprise me if we come upon one soon enough. I am so long right now and have some good gains that I don't think a 3-5% pullback in the market would create too much damage.
I am super sleepy and am cutting this short. Have a great day and I will see you at Investors Paradise.
New Swing Longs: ACTU INPC EROC EXLS ESPD GCOM RENT
New Swing Shorts: NONE
Longs Up On The Day (low vol non-IBD excluded): CVO-133 AOB-47 INWK-49 CHINA-50 IMKTA-25 CPA-39 TYL-51 SVNT-63 IHS-86 DKS-31 DA-49 HRZ-67 BRLC-81 RMTR-38 STEC-35 IDEV-39 SOFO-64 ALTH-69 AUXL-59 MEH-31 BAM-49 REGN-42 UAUA COH IGLD HRT BOT INAP LNET NSTC MVSN TRT BEZ BLUD PCCC SMSC RBN ROG VDSI TCHC SEIC LWAY ISE LMT CNH AHS HMSY LTM ACGL HCSG QDEL DECK BEBE BMC EHTH EVR ICFI CVLT AWH SAI LMRA CKSW ALXN GSIC GLBC MRB IONA AMAG IGT ADBE AOI VOCS SFL AXTI BEAS GSL AZK HNZ ETR TSG RSTI AYE MNG SIGM CAB NWL MCRS MALL MTOX PTT RMKR SUAI APRO RIV ABCB
Stocks On Watchlist: WNR SUPX NYX COL RCRC FTK NTGR VLCM FFIV NABI THS CYTR MKTX ONI
Cut All Your Losses: ELOY
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