Still In Good Shape
No important changes from the past few days. Markets, for the most part, are still in good shape, I do want to follow up on a few things I mentioned in
Monday’s report.
The Semis did give back a bunch of recent gains as I
suggested would happen. But that is normal after going straight up. In fact, it is healthy to do so. I would pay attention to the 570 area. A break below and the playing field may change. The one stock I mentioned in the
Semi area was KLA-Tencor
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PowerRating). Notice how it pulled right back to support near $63.
A break below $60 would be a negative and would coincide with a breakdown of the group.
The Nasdaq continues to have the most trouble. There is a simple reason for this. The technical condition of a major index which is still down over 60% is not going to repair itself easily. Except for some of the strong
Semis, I would play it on the light side in Tech...and in fact, I am seeing more shortable stocks than longable in
Techland at this time.
A break above 1177 on the S&P 500 would be a significant positive as it would confirm the
Dow‘s higher low. It is quite normal that the S&P went right to that number recently before backing off.
Another point I need to make is to be nimble. While the indices are doing better, there continues to be amazing sector rotation going on.
Gaming and Restaurants have put in a near-term top and
Housing seems to be in late stage. But now MEDICALS are coming on again. Let’s look at a few names that have broken out or setting up.
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CMX |
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PowerRating)Â moves above $18.
Â
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DGX |
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PowerRating) broke above pivot.
Â
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LH |
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PowerRating) looks about ready.
Lastly, sentiment is starting to get a little too bullish again for my tastes. The percentage of bullish advisors just popped up to 52.1%. This is also normal considering the latest rally. But the number is getting close to extreme where decent corrections are possible. I will be watching.