Tuesday, September 18, 2012

The Dow Edges Higher as Broader Market Consolidates Again

Turnaround Tuesday didn’t quite work out, but for the second straight day the market puts in an excellent day of consolidation. The past two days have certainly done enough to work off overbought conditions in the near-term. Volume inched higher on the NYSE and roughly 15% higher according to preliminary stats from IBD. Monday’s volume was so light that it didn’t take much for volume to creep higher. All in all another solid day for the overall market as our uptrend continues to stay intact. A few retail stocks took it on the chin today, but all in all leading stocks held up relatively well. KORS and ROST look weak and with KORS secondary pricing soon it appears the stock wants to continue to head lower. ROST on the other hand remains below its 50 day as traders sold the stock today. The stock has been on quite a run since last August and is now looking tired. A quick observation here is QE3 will not help out retail stocks. Why? Who cares, price action in leading retail stocks shows investors are looking elsewhere. Given the back to back consolidation days we need this market to resume moving higher. At the very least leading stocks need to get going with or without the market. We have escaped distribution, but we can’t consolidate gains forever! It is important not to get impatient with the market and allow your stocks to work. But, at some point we need to keep our money moving and stocks that are not moving do not belong in our portfolio. Keep in the game! We have plenty of opportunities with this market and if you give up or “take a break” you may miss a golden opportunity. I don’t like missing out on gains and if you do it makes it infinitely more difficult to capture superior gains. Cut those losses short.

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