As Quiet As They Come
Another
low-volume tape, no surprise for a
Monday in mid-August, and the quietest day in the Naz in six weeks.
Some days ago, I mentioned the
importance of being alert to wedging rallies on low volume in a major index or
stock.
Along these lines, despite the gains
of the past two days, we are in need of a higher-volume session to keep things
"honest."
Don’t count on it for the remainder of
the month, though, given the high number of market participants on holiday and
off their desks.
Looking at a chart of the Nasdaq shows
that, outside of Aug. 3’s reversal action, there have been no up sessions
replete with convincing volume.
Let’s insist on this behavior before
giving the Nasdaq market the benefit of the doubt.
Even on a low-volume day such as
Monday, there are things to be gleaned from the tape.
In the case of Monday, more separation
of the wheat from the chaff was evident in the aggressive growth sector.
Too, the stand-up action of the
financials showed no sign of abating.
That meant another round of mark-ups
in the banks and brokers, with Merrill
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Stanley
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PowerRating) printing new 52-week highs, the latter two on rising volume.
With each day of mark-ups in the
financials — and thus an easing of interest rate fears — comes a higher
probability that the correction in the growth sector is closer to its conclusion
than its beginning.
Among the names, Avocent
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broke out of the first trading range of its young life…volume was
good…buying a recent new issue as it clears its first range is the only way I
play the IPO market…that is, if the general market was something other than
the "iffy" market that we’re currently in.
Check Point
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trace out a base-on-top-of-a-base.
Ciena
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accumulation days versus nil distribution days over the past eight sessions.
Extreme Networks
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out of a micro cup-with-handle on average volume.
i2
(
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barrier and on 20% more turnover than average.
Nortel
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Oracle
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PowerRating), EMC
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remain the favored bells to watch, with an emphasis on the former four.
None are exactly burning the house
down with leadership traits, which is exactly what you would expect from this
fairly rudderless Nasdaq market.
I would continue to watch these,
however, as signs of an accumulation pick-up may presage or confirm a revival of
interest in the growth complex in general.