Thursday, February 23, 2012 Dazzles in After-Hours as Stocks Close higher

Volume rose on the NASDAQ as the index was able to find its footing again. The S&P 500 had a good day, but volume continues to be below average a sign institutional investors continue to stake out in NASDAQ listed stocks. Jobless claims fell more than expected and the Kansas City Manufacturing index rose more than expected. A few positive signals from an economic stand point certainly didn’t hurt the market today. in the after-hours session CRM posted positive earnings sending the stock higher by 10%. The cloud computing space is making a bid to become a leading industry again. The end of day surge into the close was another positive signal for this market and we continue to remain in an uptrend.

It is Thursday so we have a look at the release of the AAII sentiment survey as well as the II survey. Yes, these are released on Wednesday, but AAII does not become available to me until today. In the AAII survey we see both Bulls and Bears edge slightly higher, but nothing major in terms of a sentiment shift. There continues to be a bullish tint in investors’ attitudes towards the market, but it is not a surprise given the recent run-up in stocks. Only 51% of II survey respondents are bullish despite the recent run up. Extreme sentiment levels come when the II survey posts 60% or more. Perhaps we’ll get there soon, but for now sentiment isn’t at extreme levels where a possible major pullback could occur.

The NASDAQ does have 3 days of distribution and is something we’d get concerned with if we do see a major distribution day soon. However, concerning ourselves “if” it happens is silliness. We are discipline and react to the situation. Many times guessing is based upon a hunch or fear which rarely works out in your favor. Staying disciplined and following your rules will ensure your survival! Stick with it and follow rule #1.

Enjoy the weekend ahead!

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