Only Time Will Tell
I must begin today’s column with the excitement I
have from this past weekend’s conference. It was awesome! I thoroughly enjoyed
meeting both my fellow contributors and all of the people that read this column
and send me e-mails every day. Michelle and Amy did a great job putting
everything together. Larry runs the tightest ship I have seen and is brilliant
in his initiative. Thank you to Marianne for helping me out with my charts
(including the ones we see here today), to Daniel for wrapping up every little
detail of my presentation on Saturday down to the Red Bull before jumping on
stage, and lastly, the amazing audience and attendees of the conference; you all
made this an amazing experience that I will not forget, and I am already excited
about doing it again in a year!
Now on to the current market…
The market has been acting just as we would like to see it in a bull market.
Up days are usually coming on heavier volume and pullbacks are coming on lighter
trade.
Today is the first sign of trouble and it comes as I write this. All three
indices are down and volume has increased vs. this time yesterday. If the market
was to close right now (2:50 p.m. EST), we would have our first day of
distribution. If this happens, it is a cause for concern, but that is all. As
intermediate-term players, it is important we look to follow the trend over a
longer period. At least three or four more distribution days will be needed in
order for us to change our game plan.
I have been looking high and low for stocks that fit my criteria, but I have
not found too many candidates. Either stocks have broken out from deep within
their bases, or they have begun declining after forming the right side of a
base.
Copart
(
CPRT |
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Chart |
News |
PowerRating) falls under the first example and is now working on a high
handle.
Accredo Health
(
ACDO |
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Chart |
News |
PowerRating) falls under the second category and provides an
indication of what we may eventually be looking for: double bottom bases. Many
stocks are not yet ready to break out and appear to still be working on their
technicals and may need to decline and re-test their lows before moving
higher…only time will tell.
American Home
(
AHMH |
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News |
PowerRating) is moving higher today out of a high handle.
The
stock is one of the strongest I have seen on a fundamental basis. Doral
Financial
(
DORL |
Quote |
Chart |
News |
PowerRating) is also working through a high handle.
Express Scripts
(
ESRX |
Quote |
Chart |
News |
PowerRating) is working on a handle and sports fairly decent
fundamentals, but it is lacking in ROE. Apollo Group
(
APOL |
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Chart |
News |
PowerRating) is succumbing
to the ACDO problem of failing near new highs and is down about 5% on heavy
volume. Biovail
(
BVF |
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Chart |
News |
PowerRating) has done it again! It has attempted to break out, but
has not had volume behind it. It passed its pivot point of 48.55 yesterday, but
volume was less than the 40%-50% above-average increase we would like to see.
Today, it opened higher and has reversed on the day. BVF is a perfect example of
the lack of conviction in the current market.
Bradley Pharmaceuticals
(
BPRX |
Quote |
Chart |
News |
PowerRating) is working up the right side of its base.
Cerner Group
(
CERN |
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Chart |
News |
PowerRating) is also attempting a handle on its 11-week base.
Cryolife
(
CRY |
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Chart |
News |
PowerRating) is working through the handle of its 9 ½-week base. Recent
breakout L3 Communications
(
LLL |
Quote |
Chart |
News |
PowerRating) is one of the few stocks to hold above its
buy point, but hasn’t exactly rushed higher. It has only managed a 6.5% gain
from 92 and is currently working on a high handle.
As investors, traders and Americans, United We Stand!
Until Thursday,