12-22-11 Comments

The rally survived yesterday's morning sell off with the buy switch remaining on with an exposure count of +1 (30% in). There are a few leaders doing well: SBH, CELG, BWLD, BKI, FAST, PRGO, GNC; and others that are holding up: FL, M, GOOG, AZO, SBNY, TCBI, DG, TSCO, ISRG, RAX, QCOR, SWI, DLTR, MA, PNRA, and MELI.

Other leaders that have broken down or may be breaking down: CXO, CVLT, ULTA, RHT, UA, and SPRD.

As in all rallies it comes down to leadership and so far there is enough leadership with a few caution flags out such as distribution on the first day after a FTD. Historically early distribution is a bad omen. My own statistics on a first day distribution day leads to an eventual rally failure rate of 87%. The Oracle down swell however can be blamed for the entire NASDAQ distribution volume; something that ameliorates any conclusion. We could well be in a Santa Claus rally period.