Monday, May 04, 2009

Stocks Soar on Higher Volume Led by NYSE Composite and Mid-Cap Stocks

By Market Speculator

From the open bell to the close stocks were being accumulated. Institutional players stepped up to the plate with cash from the sidelines. Leading the way was the NYSE Composite index up 4.16% followed by the S&P 400 (Mid-Cap) up 4.15%. Small caps weren't far behind. Volume was up double digits (percentage terms) acorss the board marking a heavy accumulation day.

While Small and Mid-Cap stocks were the highlight of the day it is important to note the NASDAQ composite index was able to retake its 200dma on higher volume. A very important and highly positive move for the index. Although the NASDAQ has been the leading index it lagged today as other indexes are now playing catch up. Since the follow-through day the NASDAQ has been the index who has seen the accumulation. It will be important for the NASDAQ continue its lead.

Leading stocks are continuing to shine through, but the majority of that light is coming from China. China has been leading the world's stock markets higher and have been under a tremendous amount of accumulation. We are certainly seeing this translate into the Chinese ADRs who are traded on our markets. These stocks are, if not already must own stocks by mutual funds. China is the only country in the world with MASSIVE reserves and they have the ability to take those savings and pump them back into their economy. Unlike the United States that has to borrow, China will simply use its savings and drive new investment. Continue to pay attention to these leaders as they will help push this market higher.

The important note here is to pay attention to leading stocks and how they are responding to the market. At the moment, they are leading and building bases. It will be important to continue and watch their action and take advantage of the situation. This market is acting awfully bullish, keep your eye on the ball and keep losses small.

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