No Time To Be A Hero
The market isn’t all that exciting right now.
It’s difficult to say that it would be after volume has been consistently
coming in lighter than average since late July. On top of that, we have only
seen evidence of distribution in the major indices to point toward lower prices.
Now is no time to be a hero out there. A few stocks have been breaking out,
but they will most likely suffer the consequences of a poor market environment. Blue
Rhino
(
RINO |
Quote |
Chart |
News |
PowerRating) exhibits what I am talking about. The stock broke
through its pivot of 15.09 on Monday, only to see the move evaporate today.
There really is something to be said about buying stocks when the market is
in your favor. Penn National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating)
is another casualty. It hit its buy point of 20.12 at the close on Friday, and
after a brief rally attempt, decided to give it all back today as well.
Engineered Support
(
EASI |
Quote |
Chart |
News |
PowerRating) remains
the lone wolf. It had a nice move on Monday following the break through a pivot
of 54.04 on 8/29. Whether or not this stock is able to face a sell-off in the
market remains to be seen. History shows that its chances aren’t that great.
Unless today’s market action reverses, we are going to be looking at
another day of distribution in the major averages. Volume is running heavy as I
write this. If we do reverse course, that could be a significant sign as the
reversal would occur on heavy trade. For now, seven days have passed without a
follow-through of the rally that began on 9/5. If we still see one, it will
represent less impact and should be taken with a grain of salt. It will then be
important to see how leaders are acting. The more potential leaders that appear,
the better.
For now, Commercial Services-Schools
along with Defense are the two best groups I
see that are capable of leading a market higher. These groups will face trouble
unless the market is able to mount a solid rally on higher-than-average volume.
I will be out of town on Thursday, and unless something in the market
changes, the column will appear again next Tuesday.
Enjoy the week,