7-27-2013 Comments

The market is in position for a possible Follow-Through Day as today is the 4th day of a possible advance. 6/24 counts as day-1 of the possible advance since it closed in the upper half of the day's range. We ignore days 1, 2 and 3 because short covering masks institutional real buying intent.

My expectations of a solid rally here are muted. Since 1994 the market has only had a single good rally that started in June and that was 1999. It seems that June just is not a good time to start tradable rallies. That being said we had a Eureka (really strong market internals) on Tuesday. This is one of the signs that can accompany a tradable rally. The other two signs I look for (Coppock buy signal and IBD 6000 %E in a proper range 7.4%-16%) are not in position to confirm. Leading stocks however may be setting up. I uploaded a new watch list to the Thrust section with the stocks below.
TSLA has set up in a high-tight flag with buy point of 107.23, ten cents above an internal high made 4 days ago. High-tight flags are rare formations but also the most powerful. They essentially double in price over 8 weeks or less and then consolidate in a tight pattern for a few weeks. If and when they break out they can double again in a short period. QCOM is a November 1999 example.

Long

CMG
CHUY
EQT
FLT
OII
OSTK
PKG
RH
SN
SNTS
SSNC
TSLA
ULTI


Short

EXPE
CTSH
EW