Thursday, September 16, 2010

Jobless Claims Drop Along With Volume as Stocks End Mixed

ORCL Posts Positive Earnings as the Stock Jumps After Hours

Today was another day of gains in the market with the NASDAQ closing higher for the 10th time in the last 11 sessions. Early going the market was given a dose of good news with Jobless Claim figured showed a claims fell more than expected. However, buyers weren’t excited as the market pulled back in the morning, even with the Dow finding green territory. Volume ran lower throughout the day as sellers didn’t gain much traction. Small caps pulled back and underperformed noticeably, but with volume coming in on the light side it hasn’t become a glaring red flag. While the crowd continues to look for a pull back this market continues marching higher.

AAII sentiment survey showed Bulls jumping above 50% while Bears dropping below 25%. The shift certainly highlights the need for consolidation in the market. While the sentiment survey isn’t a sell signal it can signal turning points. However, with the market off its lows and still well off the April highs the survey shows how jittery the crowd can be. Back in August we did see the survey along with the Investors Intelligence survey show bears at max levels indicating an intermediate low. Remember, sentiment survey’s aren’t meant to be “indicators,” but reference points.

If you read financial websites and other pundits most will let you know about obvious resistance levels and overbought conditions. We are more concerned with our stocks. Normal corrections or pullbacks happen and are a part of any uptrend. Many will sell out of positions well before ultimate tops and lose out on big gains. With so many top quality stocks continuing to act well it is not likely a pullback here would lead to new lows. In fact, a pullback may offer secondary buy points. Let the stocks guide you rather than opinions about the market.

Tomorrow we have options expiry and most certainly push volume higher. Friday’s action will certainly be helped out with ORCL’s earnings. In after-hours trading ORCL jumped 4.6% after posting better than expected earnings. Revenue jumped to $7.59billion when compared to $5.06billion a year ago. The jump was welcomed by the market and should continue into tomorrow’s market.

Keep in mind chasing stocks away from a proper buy point will only increase the odds you being shaken out of the position. A huge benefit you get from Big Wave Trading is we do not chase stocks and buy properly keeping the emotion out of trading. Always cut your losses short as huge losses are very difficult to recover from.

This economy has been tough for many Americans. While government figures point to unemployment just under 10% other statistics show unemployment in the double digit range. Unfortunately, this has forced many Americans to tighten their belts, but there is something you can do! Take charge of your financial future with Big Wave Trading. Email us at

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