Make The Market Prove Itself
I thought
Wednesday’s move in the market was very impressive. Following
Tuesday’s distribution, Wednesday’s action wasn’t quite able to reclaim
the entire loss, but we were able to count the move as a sign that institutions
aren’t ready to let this thing fall apart yet.
After yesterday’s rally, it is time
to start looking for another follow-through day sometime from next Monday on.
This is the time we don’t try to jump into something prematurely. Make
the market prove itself, especially since there are very few candidates ready to
break out.
In fact, I am not seeing any real
stocks I want to put into my portfolio. The one positive I am seeing is that the
very few stocks that have broken out are actually working. Hotel
Reservation
(
ROOM |
Quote |
Chart |
News |
PowerRating) broke out of a
phenomenal base that began last July with a large gap through the pivot
point of 48.53. This company has been able to maintain a hefty growth rate
despite the ailing economy. The only drawback ROOM has fundamentally was its 12%
ROE. Technically, watching breakouts succeed is a welcome change from the past
four months if we do head into a new bull market.
Action
Performance
(
ACTN |
Quote |
Chart |
News |
PowerRating) didn’t sport the nice, long base ROOM had,
but its breakout of a 7-week base has succeeded
thus far. It comes from the leading Leisure/Games group and sport strong
fundamentals all around.
For now, things are relatively quiet
with very little to do but watch. That can change in an instant and it will pay
to be ready. In the meanwhile, enjoy SuperBowl XXXVI on Sunday.
Until Tuesday,
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