1-13-12 Comments

The current Portfolio Exposure Count is +5 (maximum portfolio exposure of 100%) and the distribution count over the last 25 days is 2.
If the market closes up today we will see a B5 buy signal (NASDAQ lows living above the 21-day). This signal requires the lows above the 21-day for a continuous 10 days and the day close is positive. That buy signal would be non actionable as we are already at the maximum exposure. A move up today could also drop the distribution count to 1. We drop distribution days if they fall out of a trailing 25-day window or if the index moves intraday 6% above the close of any particular distribution day. The distribution day close price on 12/21/2011 was 2577.97, so an intraday move up .23% (above 2732.65) would remove that day from the count.

The indices seem to be rallying better than CANSLIM stocks. I don't see compelling action in stocks that have broken out. INVN, TCBI, BKI, CELG are doing okay. TSCO broke out yesterday. CLR, MKTX, BWLD, GCO, GOOG, WLL, PRGO, SBY are trading below their buy points. There are some stocks that were doing well last year that have stumbled on meeting the new year such as QCOR and MA. This is a stock pickers enviornment it seems.

The bigger question is whether the move above the 200-day by the NASDAQ is a long-term move or a short term move. Past bear markets have shown cases where there are short term moves above the 200-day (4 weeks or so) before the market rolls over into another leg down in a continuing bear market. I have spent some time looking for precedents for a bull market to be underway right now. I haven't found any. We live in strange times however and a Fed new QE move could do anything. So I remain open and wait for Mr. Market to resolve my uncertainty.