Feast Your Eyes On This Chart
Nice tail on the indices!Â
Volume came in much heavier than yesterday as things looked great this morning
and went downhill throughout the session.
 
The market rallied through
the entire morning in an effort to show that the recent distribution days in
the S&P 500 meant nothing. By finishing with a strong 2% gain in the Nasdaq
on heavier volume than yesterday, we would have been given a nice confirmation
that it is alright to initiate new purchases and give holdings more room to
wiggle. WRONG! In the end, the indices were left with something that
resembles an upside-down “Tâ€.
The market really is struggling to find leadership.Â
Ebay
(
EBAY |
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Chart |
News |
PowerRating) is still holding above its 50-day moving average
much isn’t participating in rallies. Genprobe
(
GPRO |
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News |
PowerRating) produced amazing numbers but sold off $3 nonetheless.Â
Time and time again, we have
seen stocks flash sell signals only to re-group and move higher.
University of Phoenix
(
UOPX |
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Chart |
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PowerRating) and
Inamed
(
IMDC |
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PowerRating) provide us with perfect
examples. Take a look at UOPX as it undercut and closed below its 50-day
moving average on increasing volume back in late May. It is now trading a
fraction off its high!
Feast your eyes on the weekly
chart of Inamed
(
IMDC |
Quote |
Chart |
News |
PowerRating) and you’ll see
a stock rising on lighter and lighter volume couple with distribution evident
during the weeks of 6/6, 6/20 and 7/18. The stock enjoyed a huge, $8-1/2 move
today.
It does not usually pay off
to fight blatant sell signals or what has been proven to work in the
past. Aberrations happen from time to time, but over the long run it pays to
follow a strong set of rules without deviating.
Moving forward, we are looking to see if the market can spend some time
absorbing some of the recent selling. We are also continuously looking for
solid setups that may be able to lead the averages higher.Â
Have a great weekend!
Â