Jerry Samet
10-19-2013, 12:45 PM
The market had another solid up day yesterday as the major averages rose between .50% on the NYA to 1.32% on the COMPQ. The tech stocks lead the way after a great earnings report from GOOG. There were gap up moves on the major averages, which is a sign of real strength. Volume was mixed, higher on the New York and fractionally lower on the Nasd. The lower volume prevented a follow through on the COMPQ. Leading stocks had a strong move also with the leaders index rising 2.31% on higher and above average volume. The index set a new high on both a price and a relative strength basis. Previous leaders like NFLX and YELP and QIHU went into new high ground and stocks like FNSR had fresh breakouts. The market recovered very quickly from the sell off related to to the budget and debt issues in Washington. The market and leading stocks are starting to get a parabolic feel to them. We could be getting into a melt up phase where we see large gains in the major averages and quality stocks in a fairly short time frame. These melt up, or blow off, phases generally occur late in cycles and we could be entering the terminal phase of the cyclical bull market that began in March of 2009. The classic example of this type of action is late 1999 and early 2000. That was the end of both the secular bull market that began in 1982 and the cyclical bull that began in 1995. If we are in this type of market it can go on for a while and be very profitable. The long side is the place to be, although we must keep a close eye out for signs of it ending. I will be away for a few days, the updates will resume on Thursday. Jerry