Here’s Where I Still See Positives
What
can be said about the action we have seen on
Wednesday and Thursday from the market and leading stocks? It
appears a correction may very well be imminent (as CNBC would put it).
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The major indices have yet to
hand us sufficient distribution to walk away from the market, but it has not
mattered much after surveying the action from growth stocks.
Genprobe
(
GPRO |
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Chart |
News |
PowerRating) got knocked below its 50-day moving average on
volume this afternoon. It will be worth a close watch into
the weekend.
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Solid companies that have
been setting up like
(
SOHU |
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PowerRating), have been taking quite a hit. The
damage is far from irreparable, but some work will need to be done to produce
some solid setups once again. We need to see stocks hold or
trade back above 50-day moving averages.
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It is probably best to
hold off new purchases until we see some sign of accumulation, either in
individual issues or the major indices. The market will
either work through a shorter-term correction (10% or less) or lead to
something more serious, which will be evidenced by further distribution in the
market.
There are still positives in
the market, which include an increasing number of IPOs which will provide the
next great growth stocks. Share buybacks by companies have
been on the rise, as evidenced by Cisco Systems’ announcement this week. Finally,
although new highs have decreased with the recent declines, they still far
exceed new lows.
The upcoming weekend will be
a good chance to sit back and digest recent market action as well as take a
close look at market internals and individual stocks.
Enjoy yours,
timt@tradingmarkets.com