A gap open in the morning, thanks to some Airline merger news and strong retail sales, soon gave way to some quick selling that took the indexes slightly to the red. After those early morning lows stocks danced around the flat-line area until the final hour when they caught a small bid and managed to close green.
At the close the SP 500 ticked up .12%, the DJIA ticked up .02%, the Nasdaq ticked higher by .03%, and the SP 600 continued its negative divergence with a .02% decline. The good news comes in the form of leading stocks, again. The IBD 100 gained .3% and the IBD 85-85 gained .2%.
Volume was decently lower on the NYSE and the Nasdaq, with volume below the 50 day volume average on both. Breadth was positive on the NYSE with advancers beating decliners by a 6-to-5 margin and diverging with the price gains breadth was slightly negative on the Nasdaq.
Something I saw that could be very positive for the market came in the form of leading stocks leading today and the fact that the top three industry groups in IBD's Industry Groups were part of the top 10 biggest gainers on the day. The leading Transportation-Airlines Group was up 2.6%, the Media-Periodicals Group was up 2.9%, and the Internet-Network Solutions was up 1.2%.
The loser of the day was the Semiconductor Index with a 1.2% loss. However, this group of stocks have been laggards the entire rally so this shouldn't be a surprise to anyone.
The Nasdaq just keeps on basing. This just leaves investors/traders to wonder what is next. The basing period right now is good for traders like me who are long and need the basing pattern to tell what stocks are setting up in strong bases and which stocks need to be trimmed back because they are lagging. Listen, if I am long a stock that is supposed to go up in a good market and it can't go up. What makes me think that it will go up if the market weakens? I know I keep on this point but it is a good point to keep harping on as we sit here in no man's land.
The basing pattern is really positive for possible longs. But the longer we stay around these highs without making any gains, the odds increase for a pullback since we are already up 10%+ from the lows.
The Nasdaq looks a bit weaker than the NYSE, to me. But I am still getting plenty of longs from both markets so I am not sure I am too worried about the Nasdaq giving it up. I am just ready, in case it does.
The fact is, after all that negativity that has followed since the one 1% across the board down day in late November, stocks are still holding up. Momentum is hard to stop when it is in full swing and I have watched many "smart" traders miss HUGE upside moves (99-early00, 2003, and Oct 05-May06 come to mind) trying to call the tops and reversals in the market. Nothing has changed in the trends. Are all up except the Nasdaq. There all are up but the short term trend which is in a lateral congestion trend.
I recommend reading the past couple of post to know where I completely stand on this market, if you have not read them yet. We will see what happens tomorrow. Aloha and I will see you at Investors Paradise.
New Swing Longs: FTK LFL TATTF WPZ PFWD NWK HA NMGC SNCR
Adding To Current Holdings: GIFI
New Swing Shorts: NONE
**stocks w/ number up 25% or more since I went long**
Longs Up On Day: MIKR-34 CPA-55 DIVX-32 IHS-92 FTEK-49 JST-91 DA-54 AOB-125 TTEC-59 BMA-30 HRZ-76 MA-93 SOFO-100 MEH-57 IDEV-38 MAMA-78 PTT-79 GENT-34 IIG ININ DLB BTJ UAUA GLDN PQ GIFI OMNI HOS RKT NITE CCO SQM FFH GRRF NU EVEP AMSF RBN WTS NUE MVSN CVLT SEIC SRSL SKX CBF BMTI KOG MBLX ULTR HINT CLRT LMRA IMGN BITI HCSG NRF CCBL ETE BUF ISBC IMA TSG ATX INMD TTG HEI
Stocks On Radar Screen: AMK HLT BRG MIDD XTO ONT LEAP IMMU KKD DYN LOOK MVIS HLTH BJ NI ADST PDA
Cut some losses/take some profits: GSL AOI TRT UCTT AGR ISE MCDT MNG INWK CHINA
Take all profits/cut all losses: BEZ TWLL SAI
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