Mike
08-27-2011, 10:39 AM
The NASDAQ put in a higher volume reversal to the upside on Friday. The 2.5% move would qualify as a follow-through day in its own right if we had been in a correction. As such it represents a further confirmation that the market is trying to wake up. This also erases concerns about whether we had a distribution day on Thursday or not. Friday also qualified as a Eureka, a really strong upward thrust of internals on the NYSE as defined by Ian Woodward. Essentially a Eureka looks at all the components of the Richard Arms or TRIN index and analyzes for strength in all components as well as the TRIN. Eurekas are rare. These two impulse conditions together often accompany a rally with some legs. The third thing I look for is a weekly Coppock bottoming signal within 20 days of a FTD. I believe this is in the cards also, or appears so as I write. What the Coppock tends to do is not signal before the market has had time to consolidate a prior downmove. We have had a significant downmove and the consolisation could continue for a while but essentailly enough consolidation may be present now. The three factors place the odds of a successful bear-market rally around 57% based on my studies. It is no secret that I have been quite bearish lately. This is so and I remain so on a nine-month to one-year time frame but between now and the end of the year I suspect the market could be up or at least don't see obvious road blocks. Volatility remains high so this will not be an easy environment.
IBD's market pulse headline says "Stocks Rumble Higher, But Leadership Is Missing". This is a true statement. However below will be a list of approximately half of the IBD50 that are holding up. If something other than a junk off the bottom play ensues look for leadership on this list, as I will be doing. We could have of course a junk off the bottom rally with legs, there is no law against this. The lower risk play may be an ETF of your choice with or without leverage. There is a chart in IBD on page A11 that shines a light on Big Caps vs. Small Caps and Growth vs. Value. The strength on the charts seem to be Big Cap Value right now however at market turning points as we might be in this could change. If you look just over the last five days, small caps are outperforming with midcaps next as well as the NASDAQ 100. So small-mid cap technology looks like one of the bounce play grounds.
If you peruse the list of stocks below you will see more than a few defensive names as well as many stocks related to precious metals. I am in GLD, DGP and UWM as we speak. I selected the 2X UWM vs. 3X TNA based on volatility of this moment.
The interview below is Fred Richards. He is an economist and CANSLIM investor (and member of VIT) with experience that goes back to the 1950's. He always has valuable insight.
http://www.moneyshow.com/investing/article/44/DailyGuru-24248/11-Stocks-to-Watch-for-the-Next-Uptrend/
Some stocks to look at:
ALXN, AAPL, PRGO, AUY, HANS, MA, ABV, GOLD, SLW, GG, DLTR, CERN, RGLD, V, SWI, TDG, NUS, NTES, IAG, SHPGY, EGO, JAZZ, WCN, BBBY, ABX, SSRI
IBD's market pulse headline says "Stocks Rumble Higher, But Leadership Is Missing". This is a true statement. However below will be a list of approximately half of the IBD50 that are holding up. If something other than a junk off the bottom play ensues look for leadership on this list, as I will be doing. We could have of course a junk off the bottom rally with legs, there is no law against this. The lower risk play may be an ETF of your choice with or without leverage. There is a chart in IBD on page A11 that shines a light on Big Caps vs. Small Caps and Growth vs. Value. The strength on the charts seem to be Big Cap Value right now however at market turning points as we might be in this could change. If you look just over the last five days, small caps are outperforming with midcaps next as well as the NASDAQ 100. So small-mid cap technology looks like one of the bounce play grounds.
If you peruse the list of stocks below you will see more than a few defensive names as well as many stocks related to precious metals. I am in GLD, DGP and UWM as we speak. I selected the 2X UWM vs. 3X TNA based on volatility of this moment.
The interview below is Fred Richards. He is an economist and CANSLIM investor (and member of VIT) with experience that goes back to the 1950's. He always has valuable insight.
http://www.moneyshow.com/investing/article/44/DailyGuru-24248/11-Stocks-to-Watch-for-the-Next-Uptrend/
Some stocks to look at:
ALXN, AAPL, PRGO, AUY, HANS, MA, ABV, GOLD, SLW, GG, DLTR, CERN, RGLD, V, SWI, TDG, NUS, NTES, IAG, SHPGY, EGO, JAZZ, WCN, BBBY, ABX, SSRI