Stocks Find Strength at the Morning Lows Closed just off the Highs of the Session

After the recent bout with selling the market was able to find buyers pushing the market higher as volume swelled. Whether or not it was managers trying to get in their trades prior to leaving the Hamptons or Shore doesn’t really matter. Expanding volume as price moves higher is generally a good thing. Just after 10:30 AM EDT it appeared as if sellers were winning the day and would extend the trading losses. However, the market was able to find buyers willing to step up and scoop up shares. We did not hit new highs today, but the action was certainly bullish enough to suggest we may have another new high. Stick with the trend. Sentiment indicators crept towards the bullish tint, but not in huge waves. AAII Bull increased to 39.5% from 34.62% last week. Bears jumped too from 25% to 26.65%. Clearly more of the crowd edged towards a bullish stance week over week. However, we aren’t seeing extremes where Bulls exceed 50% and bears are well under 20%. NAAIM sentiment survey showed rose slightly from 74% to 75% invested. This move doesn’t exactly scream over exuberance from money managers putting money to work. Again, price action certainly hasn’t suggested we are at a top and even sentiment hasn’t suggested we’ve hit one either. Market leaders continue to act well in this environment despite a few mishaps with earnings: GMCR and SCTY. Even GMCR which reacted poorly to stop didn’t end the session in terrible fashion. TSLA performed well after earnings and continues to be a leader. PCLN reported today and is jumping nicely in after-hours trading at the moment. If you stick with market leaders and stay disciplined you can reach outsized gains. It takes following the methodology and not making reckless decisions. Many will still try and call a market top here. They may be right about this market and we’ll go lower. However, what we know right now is we remain in an uptrend and we are going to stick by our process. There is no need to be a hero and turn into a zero. Longevity is the name of the game and we are here to build long-term success. Have a great weekend.

Stocks close in the Red; Volume ends Mixed

Continuing with the summer trade the market closed lower lead by the Russell 2000. The NASDAQ posted back to back losses while the S&P 500 losing streak extended to 3 days. We did see a nice rally off the lows, but as soon as the rally began volume was sucked out of the market suggesting sellers left the building. NASDAQ volume did end the day higher notching another distribution day for the index. However, given the move off the lows it wasn’t a terrible distribution day. Many are blaming “The Taper” for stocks selling off. Perhaps the reason is the taper, but we aren’t picking up what the pundits are putting down. Our uptrend remains and we continue to monitor our positions and their respective price action. Solar stocks took a hit after earnings out of FSLR weren’t warmly greeted by the market. Homebuilders once again were to the downside with the entire group showing very negative price action. Given the market is in an uptrend shorting stocks is a fools game. The reason to highlight homebuilders is very simple. They were leading the market higher and now have rolled over. Financials are the only group showing strong earnings growth at the moment and if this group rolls over we’ll take notice. Earnings continue to pour in and we continue to monitor for earnings gaps. Quite a few stocks are running ahead of earnings making it quite difficult to buy with them being extended. We need sound patterns to make use of earnings. We aren’t about to gamble our capital going outside our process. Stick with the plan and execute. No need to be a hero in this market. Tomorrow we’ll get another week’s worth of job data from Initial Jobless Claims. Hard to believe this number used to be meaningless. It’s not hard to believe given the financial media’s need to fill the airwaves. You do not get an advantage by gaming initial jobless claims. It would be wise to avoid that type of trading. In after-hours trading TSLA turned heads again with its stock nearly up 10%. GRPN is another stock moving higher. SCTY and GMCR aren’t so lucky. Ride your winners hard and dump your losers.

Stocks Pullback in light Volume as the Market trades in a Tight Range

Today was largely an uneventful day as volume was well below average and well under Friday’s level. Sellers continue to be on vacation as buyers were able to lift the market into the close. AAPL was the talk of CNBC, but the stock remains in no man’s land despite the potential for the company to return cash to its shareholders. The Yen continued its decline as the Bank of Japan is hell bent on destroying its currency. In commodity land crude oil jumped back to 97 and appears the commodity is headed above par. It remains to be seen if these high crude prices will hurt the economy. We remain in our uptrend and at this point we don’t see enough evidence it will end any time soon. Tomorrow we’ll get the President’s view of the state of the union where we’ll l likely hear about new spending measures. FSLR and SCTY moved and while we have high crude oil prices the President will likely renew his call to invest in solar. We simply see two stocks moving and at the moment it appears the industry is improving. Free government money is nice and when you couple it with higher crude prices solar certainly looks like a hot industry. Europe continues to have issues and the DAX closed below its 50 day moving average again. The EURO has gained quite a bit because at the surface the ECB is not set out to destroy it. Our short-term trend model has been long FXE for quite some time. How long will it last? It is anyone’s guess, but for now the currency is in an uptrend. The Yen continues its decline and the dollar remains stuck in the middle. Currency markets have a funny way of making headlines and for now FXY and FXY remain in solid trends. Bulls are looking for a correction to buy and bears are looking for a correction to sell. Sentiment continues to be bullish, but either camp has yet to win. Remember to have a game plan in place! TICKER ST TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 2/11/2013 151.77 -0.02% IWM UPTREND NO CHANGE 2/11/2013 90.70 -0.11% QQQ UPTREND NO CHANGE 2/11/2013 68.01 0.03% USO UPTREND NO CHANGE 2/11/2013 35.12 1.21% UNG DOWNTREND NO CHANGE 2/11/2013 18.45 0.49% GLD DOWNTREND NO CHANGE 2/11/2013 159.70 -1.16% SLV UPTREND NO CHANGE 2/11/2013 30.00 -1.41% DBC UPTREND NO CHANGE 2/11/2013 28.45 -0.35% FXY DOWNTREND NO CHANGE 2/11/2013 104.42 -1.20% FXE UPTREND NO CHANGE 2/11/2013 132.94 0.26% TLT DOWNTREND NO CHANGE 2/11/2013 117.12 -0.08%