All’s Well That Ends Well
A respectable
day, if on light volume, as a bunch of
glamours did the right things on the tape.
What the Nasdaq market needs more than
anything else at this juncture is volume.
At the risk of sounding obvious,
another session similar to Thursday’s, when 1.83 billion shares hit the tape,
would be a step in the right direction.
Of course we would always like to see
volume expand in an uptrend — that’s a given.
But it’s much more imperative that a
fresh bull leg, if that’s what this three-day rally is to become, show early
conviction than an advance that’s been around for at least a few months.
From here, the key stocks to watch
from the standpoint of gauging market sentiment are
not necessarily the same as they were a month ago, or even two weeks ago.
At this point, I would not be watching
the Group of Seven “early leaders” that came flying out of the depths
of the March 10-May 24 comedown.
The behavior of the G7 was quite
useful as a sentiment indicator during June and early July, but they’ve since outlived their usefulness,
as least as far as providing us with a barometer as to leadership and market
health.
So we’ll bid most of them farewell and
fixate on the next gaggle of names that are showing seminal signs of leadership.
One member of the “former
G7,” Sanmina
(
SANM |
Quote |
Chart |
News |
PowerRating), might be worth keeping an eye on, as it gapped up
and out of a two-week pullback Monday on dense trade.
Otherwise, some of the stocks that you
wanted to see act well, did just that Monday.
For example, Sonus
(
SONS |
Quote |
Chart |
News |
PowerRating)
exploded to a new high on double average volume.
Brocade
(
BRCD |
Quote |
Chart |
News |
PowerRating) moved up on brisk
turnover for a Monday, camping out on new high ground.
Likewise, Ariba
(
ARBA |
Quote |
Chart |
News |
PowerRating) also
showed good volume for a Monday as it put in its fourth accumulation day in the
past six sessions.
Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating) put in an outside
day, going out near the top of its range, though volume wasn’t impressive.
Extreme
(
EXTR |
Quote |
Chart |
News |
PowerRating), which nearly
quadrupled over the course of two months, also rose.
i2
(
ITWO |
Quote |
Chart |
News |
PowerRating) lapped higher on robust
volume as it neared the top of a rising four-month channel.
Interwoven
(
IWOV |
Quote |
Chart |
News |
PowerRating) acted very well
as it moved up the right side of a three-week handle.
In the bells, EMC
(
EMC |
Quote |
Chart |
News |
PowerRating) eked out a
new high on average trade.
Sun
(
SUNW |
Quote |
Chart |
News |
PowerRating) also located virgin
soil, and on a pick-up in volume.
In all, a decent enough session,
highlighted by some important leadership type names powering ahead.
But make no mistake: Through Thursday,
the Naz had lost 18% over the span of 14 sessions, on an intraday basis.
This leaves us dealing with a market
with lost leadership.
And that means the opportunities for
intermediate-term players are far fewer than a month ago.