Food For Thought
Now there is some cause for concern…the
major indices have all posted at least four days of distribution in the past two
weeks. Yesterday’s route of selling was the final day in which the market
needs to be heavily considered in future buy and current hold decisions.
Today’s move higher as I write this leaves some food for thought as volume
is coming in higher than yesterday around 12:00 p.m. EST, showing institutions
buying stock after positive news from Apple
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AAPL |
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PowerRating), Yahoo!
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YHOO |
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PowerRating) and
Compaq
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PowerRating) that came after yesterday’s close.
At this point, it is time to take the evidence of solid distribution and
weigh that in on any stock purchases. Secondly, there are very few, if any,
stocks that have succeeded in breaking out and holding the move in the past
several weeks.
Direct Focus
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PowerRating) is the most recent stock to pull below its pivot
point and move towards “failure.”
Krispy Kreme
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KKD |
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PowerRating) knocked any final holders of its break through the
pivot of 42.15 out of the stock for the standard 7-8% loss in the past week.
Kronos
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PowerRating) is one of the rare examples that has held its buy point of
53.15 after a pullback. It appears to be moving back higher, but this is where
the weight of any serious market correction may become a factor.
In the upcoming days and weeks, it is time to keep an eye out for two things:
accumulation and a follow-through day in a major index, and potential buy
candidates in individual stocks. For the current time, spending some more time
in cash definitely won’t hurt anyone’s portfolio.
Have a great weekend,