Close But No Cigar…Yet

 

It’s
just what the doctor ordered!
A strong trading day on the
heels of  what was clearly a distribution day. Unfortunately it
wasn’t on big volume. Yes, I probably put a damper on the party but it
was a fact. We want to see the markets move higher on high volume.
Breadth was not strong enough to take out yesterdays high on the Dow.
The Nasdaq advancers led decliners 17 to 15 and similar action was
seen for the NYSE where advancers vers
us
decliners were 18 to 11. 

If you are trading, just a
word of caution…don’t look for an intermediate term hold and always
use open protective stops. I like to use what Larry Connors calls 2
for 1 money management and on the remaining position implement a
trailing stop technique so I c
an
let
profits run if the markets decide to move my position higher. Just be
sure you honor your stops.

Stocks which are showing
some constructi
ve
activity

are:

Medical stock Amsurg (AMSG)
is basing
;
overall
the company has been showing an increase in earnings verses a year ago
(25%, 31%, 21% and 27%). Sales have increased also (44%, 44%, 43% and
43%).

Restaurant Ruby Tuesday (RI)
is creeping up the right side of its multi-week base and looks to be
forming a handle. Earnings have increased 25%, 31%, 33% and 18%
respectively. Note the relative strength line is rising and the stock
closed strongly.

Tier Technologies (TIER)
is interesting in th
at
the company has close
d
above the mid-point of the bearish long body. Price has been ascending
as is the relative strength line. Fundamentally, the company has been
showing good earnings growth (88%, 111%, 383% and 150%) and sales
growth.

Exchange traded funds,
which gained in the session
,
were led by the Oil Services Holdrs (OIH)
,
which rose 4.8% after OPEC announced it would decrease output by 1
million barrels per day.

Gaining also was the Energy
Select Sector (XLE)
which rose 4.6%  and the Ishares DJ US Energy Sector fund (IYE)
gaining 4.5%.

Losing today on the ETF
front was the Morgan Stanley Internet Street Tracks (MII)
which slid 4.0%.

The Ishares S&P TSE 60
Index (IKC)
fell 1.9% and the WEBS-Germany Benchmark (EWG)
closed lower 1.3%.

Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops
where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.

Greg