Wednesday, June 03, 2009

Holding Gains Stocks End Higher as Leading and Small Cap Stocks Lead the Way Higher

by Market Speculator

Once again stocks stage another bullish trading session. It was important that stocks did not reverse course and give up a sizeable amount of gains from Monday and prior Friday's sessions. Even more important is that we have leading stocks taking center stage and the reigns from junk off the bottom stocks. Intraday action was not volitile as we have seen it from last week. Much of the day we spent in higher ground and avoided any nasty sell off heading into the close. All around a positive day for the market and signs we are poised to continue to march higher.

We have plenty of members in the chat room who are taking advantage of this market. As we begin to rotate into quality growth stocks they will offer up the ability to get long in a big way. Are we there yet? Not quite, but we might be closer than many believe we are. Big Wave Trading members will certainly be taking advantage of the opportunities these quality growht stocks may provide.

Aside from positive price and volume action the number of New Highs vs. New Lows. Remember, for Monster Stocks to show up we need a positive NH vs NL ratio. Today, 162 new highs were made while only 26 new lows were hit. Removing the New Lows from the AMEX only 5 new lows were hit, a very positive sign indeed. Keeping in mind the massive bear market we witnessed it took quite awhile for New Highs to really start pounding on New lows. Not too mention during the 1938 rally it took over 3 months for sound leadership to take hold from the bottom. We may be entering into a sweet spot in this rally.

The most important aspect of this uptrend is that we have the IBD indexes leading for the second day in row. Of course, it will take much more than two days but nonetheless we need the IBD indexes to lead. We are no almost 3 months into this rally and we are beginning to see signs of leadership. Reviewing the 1938 market rally there was an excellent opportunity to make money. Strike while the iron is hot because if we follow the 1938 market it took another 3 1/2 years to find another bull market. We shall see but the market in front of us might yield us an excellent opportunity.

As always, remember to keep your losses short and never let them to have the chance to grow.

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