The Market’s Main Concern Now
The
market continues its unproductive action. We have not seen a solid
accumulation day since the end of April.
Since the indexes stopped
dropping 4 days ago, there have been a few growth stocks and breakouts popping
their heads up. Digital River (DRIV) was one and is currently holding
above its pivot point of 30.65 following a choppy breakout.
Genprobe (GPRO)
attempted a lackluster breakout of a wide and loose base on 5/13 only to stand
no chance of success. The stock has been on many growth investors’ radar for
over a year now after a strong performance.
Internet stocks continue to
hang in there. Yahoo! (YHOO) stands just off its split-adjusted high
of 29.17.
On the other side of the
spectrum, the homebuilding group appears to have thrown in the towel as rates
climb. Of course, I could be wrong as this group has bounced back numerous
times, but stocks like Ryland (RYL) and Hovnanian (HOV) do not
appear in very sound technical shape.
For now, the market appears
very concerned with uncertainty as a whole. Considering Iraq, interest rates
and politics, there is a lot to account for. Additionally, we saw a fairly
large bounce off the October 2002 lows in the NASDAQ and other indices.
Similar to the 1932 bottom in the Dow, the averages may require a prolonged
period of correction and stabilizing before attempting another move higher.
For now, cash remains a great
place to be to protect capital for the eventual and inevitable move the market
will make to the upside. The important thing to remember is to wait for signs
of accumulation and individual stock leadership before moving money back in.
Tim Truebenbach