Stocks started the morning on the downside, after a better than expected job report number. I am not sure how much impact this bit of news had but it was a major focus today. The number didn't mean much for the bulls as they stepped up, bought the dip that sent stocks up faster than they went down, and then went on cruise control for the rest of the day letting stocks drift to a positive close.
At the closing bell, the Nasdaq rallied .4%, the DJIA gained .2%, the SP 500 gained just under .2%, and the SP 600 diverged and closed lower by .1%. The IBD 100, remaining on theme, finished with a .5% gain, leading the market.
Volume was lower on both the NYSE and the Nasdaq, as traders started the weekend early. Possibly to get a jump on Chanukah and Chirstmas shopping, before the last rush starts.
Breadth was pretty much flat, with advancers barely beating decliners, on both exchanges.
For the week, the SP 600 was the big winner rising 1.3%, the Nasdaq was up 1%, and the SP 500 and DJIA were up .9%. The best part of the week came from leading stocks. The IBD 100 managed a 2.7% gain for the week, well outpacing all other indexes. This continues a trend of outpacing the market to the upside and keeping smaller losses on the downside, for the past five weeks.
The gains by the IBD 100 and the gains in the indexes, considering it was a week with a negative and bearish overtone, show that underneath, for now, the market is very strong and is not to be messed with. I mean, think about it, for a rough week we closed up.
This market has been very impressive with a broad rally lifting many leading stocks in many leading industries. The strength of the breadth is a testament to the strength in this economy. You can bash Bush all you want to about Iraq (they did this to Truman, Lincoln, Reagan, and Churchill) but if you bash him on the economy you are a fool. Stocks would not be going up in every sector the way they have since 2003 if this was not a strong economy. The tax cuts worked, rather you want to believe the facts or live in a fantasy world of utopian BS.
One of the more conflicting points of data I have reviewed is the sentiment surveyes. AAII shows more bears than bulls; however Investors Intelligence shows near record bulls and very low amount of bulls. II is a bad timing for market tops, normally helps when bulls bears cross showing extreme bearishness in the market and that normally marks a bottom. As for topping, the II has been pretty useless, unless the bears go below 20%. Then you know a top will be near.
You must remember, that these area all secondary indicators. The only important piece of data you MUST know is the price and volume trend on the major market indexes. This is the actual movements of big money. Their buying and selling will have the real impact on stocks. Not some stupid survey. Those are only guides to help you know where you are. Just like the VIX, as a timing tool, it is useless.
For now the market is in a strong uptrend and shows no sign of stopping yet. There are a few signs that momentum is slowing, via the recent trading, but that is no reason to assume that the trend is going to end here.
The stocks that I am long are still doing very well and few stocks are giving me the "bail, bail, bail" signal. The scans are still producing many new long candidates and there seems to be few stocks even showing extreme weakeness.
Three out of four stocks follow the general trend of the market and the right time to short is when three out of the four time frames of the market is in a clear downtrend. The only time frame not in an uptrend is the short term and that is in a lateral pattern. Until the trends say it is time to short, there is no way in hell I am going to bet against this market.
For more info on what the market is doing overall, I recommend reading the past four post.
Have a great weekend and Aloha! I will see you at Investors Paradise.
New Swing Longs: GRRF INMD MAMA TRMA MBLX
Adding To Current Positions: DLB AMSF ISIS PSMT
New Swing Shorts: NONE
**number is % gain from opening position. Only stocks up 25% have number**
Longs Up On The Day: AKAM-237 KNOL-172 JST-91 MA-102 ALTH-116 AOB-113 FFH-30 PCCC-30 ICE-44 INWK-59 LWAY-53 IGLD-56 DIVX-30 CPA-41 HRZ-87 SEIC-25 AOI-34 SVNT-95 BMA-29 OMTR-60 ISIS-32 SOFO-68 IDEV-51 GENT-36 NHWK BTJ DLB TSRA GIFI MAIL RKT IMKTA RBN BOT ACP SQM BONT RJET NSTC CMCSA AZS TSG DECK CVLT CELG IFOX AHS AMSF ETE LCC RENT MIKR MALL ASCA CNH CMT GLDN ACGL EVEP UCTT KALU CBF AWH HOTJ NLST FLML PLB LNUX CLRT VCLK IMGN VCP HNZ TGEN MDF PSMT RMKR CANI (long 282 stocks)
Stocks On Radar Screen: TAM CTRP SCA AHD RNIN AQR GOAM DTC MSFT GERN CAE DFC GSOL
Cut All Your Losses/Take All Your Profits: RMTR BULK DUCK LQDT
Examples Of Some Stocks I Will Be Taking Some Profits/Losses On: PMID AFT TCHC
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