Getting Closer
Waiting for a
follow through is the best thing to do at this point. Whether the
market posts blatant distribution or the selling has gone on throughout a bear
market, I always like to consider new purchases only after seeing solid
accumulation in at least one of the three major indices, and there is no better
method for identifying this accumulation than the standard rally day, followed
by a 2% move in the same average, four to seven days later.Â
Yesterday marked the
first rally to begin counting from.
Regardless of what the market does do
at this point, there are still very few long opportunities that have been
setting up. Even fewer have been succeeding. Direct
Focus
(
DFXI |
Quote |
Chart |
News |
PowerRating) and Kronos
(
KRON |
Quote |
Chart |
News |
PowerRating)
have been the two recent standouts I have kept my eye on. Even these two have
been less than spectacular. For example, after rallying 9% above its pivot point
on the initial breakout, DFXI undercut the pivot point of 33.34 and declined
about 5% below it before continuing the advance.
Kronos gapped higher and
traded at a new high before reversing to negative, where it currently sits as I
write this article. It is just another piece of evidence that stocks breaking
out are lacking fresh institutional support. When strong support is added to the
equation, they tend to smooth out a stock’s performance with their constant
buying.
I have been watching many of the
earnings reports from the growth companies that have been on my radar, and they
have been consistently beating expectations. This fact, along with a strong
market, will eventually present us with many opportunities. Has anyone ever
heard of the saying: “Once over the hill, you pick up speed”? I
believe we are getting closer and closer to the market we’ve all been waiting
for, and starting in early February, I will be launching a new
trading service designed to take advantage of opportunities as they are
presented, in addition to providing defensive strategies in order to preserve
capital during choppy markets.
Have a great weekend,
TimÂ