Stocks started the day pretty calm and soon gave way to some very rapid selling that dropped the indexes hard to their lows of the day; the Nasdaq fell as much as 1%. However, stocks found strong support on that selling and after the FOMC announcement stocks worked higher finishing well off the lows. Overall, a very impressive fight back from what looked to be like a really bad day in the making.
At the close, the SP 500 and DJIA fell a meager .1% and the Nasdaq and SP 600 fell .5%. The obvious bad news came in the IBD 100 as that index lost 1.3%, clearly signaling leading stocks were the hardest hit.
Volume was higher on the NYSE but still below the 50 day volume average. The Nasdaq's volume came in slightly higher. That gave the Nasdaq its 3rd distribution day in four weeks.
The selling in NYSE did not seem that severe as volume was under the average and stocks closed near the higher levels of the day. The Nasdaq's distribution also did not have that feel of extremely strong selling.
Breadth was negative on the NYSE with decliners beating advancers by a 9-to-7 ratio and decliners over advancers by a 3-to-2 ratio on the Nasdaq.
Steel stocks were the worst hit of the sectors today, with the IBD Steel-Specialty Aloy group getting crushed 4.9% and the Steel-Products getting creamed 3.3%. This goes to show once again yesterday's leaders are not normally tomorrow's or today's leaders. These are the old leaders and most of these chart pattern have the same patterns many stocks have on their last breath. I don't trust this group at all. NEXT!
I guess I should move on to the Fed speech. Well, no surprise, the Fed decided to leave the Fed rate alone at 5.25% for the fourth straight time. There was one dissenting member Richmond Fed Lacker who wanted a rate hike.
In its policy statement recent indicators showed that "economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market." Looking forward, the Fed said "the economy seems likely to expand at a moderate pace."
"Inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand," the statement said.
The FOMC said further hikes are still possible, saying that "the extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information."
I still remain caution that a pullback could be possible but the action in the market continues to show me buyers are taking every dip they can get. This can change at any time but for now it has not.
Some stocks are starting to show signs that momentum money is tired. Stocks like MAMA shooting up a lot show a lot of money is chasing few speculative issues now. Before a lot of stocks might have taken bids like this. But many issues like SWAT show what is really going on with most pure speculative issues. This is a sign of a tired market.
The poor breadth in my top stocks of 404 issues showing only 113 up shows that it was a weak day but in saying that at the same time I only had a few complete sells out of 285 stocks. There are a lot of stocks that needed some good profits locked in and a lot of stocks that need to have most sold now because they are not immediately moving up since breaking out. There are about 50 of these. So obviously I am raising cash here, by just reacting to how my stocks are acting. I am only making 2 new buys and selling partial shares in about 50-60 stocks.
I still don't know what this pullback will be. I have a lot of beautiful charts still but a lot more are now in that limbo stage where they could go either way. This is the first time I have seen this in this whole uptrend. This is officially day one where I have sold what I would consider a lot more than I am buying or interested in.
The key here is to be prepared for gains or losses. Right now is not the time to start buying tons of stocks because they are pulling back. This one could last longer than the others and adding to losses is a LOSER and LOSING game.
Just because the market looks ready to pullback, REMEMBER, it might not. So play the middle and be ready for either move. That way NOTHING can surprise you. Patience will pay off here.
You sure don't want to sell all your stocks and see stocks like MAMA start popping up left and right before the "real" rollover starts. It is best to wait for the market to tell us it is ready to rollover. I would look for a 1% down day across the board on heavy volume. When I see that...then I might get worried. For now I am just ready.
Aloha and I will see you at Investors Paradise.
New Swing Longs: PRXI ATX
Adding To: NONE
New Swing Shorts: NONE
**stocks w/ number up 25% or more since I went long**
Longs Up: HRT-58 PCCC-31 LWAY-41 DA-53 IAAC-45 FTEK-45 DIVX-28 TRBN-35 OMTR-73 MAMA-76 PERY-32 PLB-29 MFRI-49 PTT-74 GLDN SRSL ININ IIG CCO RCRC RENT BTJ GRRF DLB NU CELG BMTI SAI CTCM QI EXLS TSG MDF TGEN CLRT GLBC RHA HURN CMCSA HNZ SFL AZK RWT PSMT ZILG
Stocks On Radar: DLIA TDS CNP CBG KBR EROC MKV ONSM BIOM ED HHGP KR SPI EE THS VRSN MEL NI AMCR....Utilities in general are on my watchlist.
Some Examples Of Stocks I Am Taking Partial Profits/Losses On: MAMA TSG BEZ GSL OPTM REGN MEH NLST ANAD TWLL HRZ NUE IDEV
Complete Cut All Your Losses/Take All Your Gains: ULTI NEWP SWAT
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