In MondayGÇÖs trading outlook, I pointed out that Visx Corp. was an interesting pullback. LetGÇÖs take a look at why I mentioned the stock. Referring to the chart below, the stock, which has been in a strong uptrend, began to pullback (A).
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Techs led the big up move yesterday, but this time they were joined by many of the other institutional favorites. The advancing volume was the second largest in a month.
The Trading Where The Action Is List contains the most volatile stocks and are only for those traders who are willing to assume a high degree of risk in order to capture larger gains.
Last night, we had six buy signals on the Market Bias Page. As a general rule, whenever 3 or more signals are pointing in the same direction it normally suggests a strong market bias.
Techs and telecommunications returned as leaders in the relief rally. All major averages were up yesterday except the Dow, which lost five points. Retail, drugs, brokerage, and banks didn’t join in the rally.
Very few stocks were missed in yesterday’s sell-off–they do get everybody when they want to. All 30 Dow stocks finished in the red and only 35 of the S&P 500 closed up on the day.
Only two out of 35 of our tech friends on the Morgan Stanley high-tech index (MSH) finished on the plus side, and only one of the fifteen stocks in the drug index closed positive.
Tonight, we have six buy signals on the Market Bias Page. This is the most signals pointing in one direction that I have seen in a long time. As you know, there are no guarantees in trading, but when you see this many signals, it pays to take heed, especially in light of the overnight action.
Institutional participation was noticeably absent yesterday in a light volume, negative breadth day. The S&P 500 closed below the low of its high day (1323.75) and traded in a very narrow range: 1303.84 to 1294.18, with a close at 1297.
Anadarko on the Proprietary Momentum List and Pullback List, looks interesting to me for several reasons. It has formed a high level triangle and closed well today.
Friday reversed Thursday, but it had more volume (921,000,000 shares) and more program activity. The swing price percentage movement (the amount of total price change, both up and down, on an intraday basis) was extreme at 7.3%. It was a clear down trending day, with five waves down and not one higher high.