Take It Day By Day
Sometimes, I
find myself actually trying to come up with new things to say. I
started writing this report and realized it was almost exactly what I said in last
Monday’s report. What does that mean? It means that not a lot has changed.
Technology has continued to play the leading role in the marketplace. As it has
gone, the market has gone.
The one main point I do
want to make is that late last week, the Nasdaq had two high-volume reversal
days. Thursday’s 9-point drop after being up 50 points gives me pause. But in
the context of the strong move off the lows, it is within normal to pull back
here. I suspect more pullbacks are in the offing but I do believe they will be
controlled and not a trashing, at least in the near-term.Â
I know there is lots
of talk of revisiting the lows. I am not in that camp yet. Too many stocks have
built strong bases off of their lows which makes it tougher to break through.
But I am a day-by-day technician right now. Trying to interpret more than that
will only get you in trouble.
Resistance, as I see it, continues to be right ahead. It is bullish that the Nasdaq
broke above the first resistance point I mentioned last
week at 1800 as well as the S&P 500 above 1100. Any break below those
levels on a closing basis would tell me the market’s upside could be done for
the near-term.
Now, as far as action you can take, there still remains a big problem. I see no
breakouts — or very few. The New High List actually
contracted during the week, and take out non-operating companies like Muni-Bond
Funds — take out all the under-$10 names — and you are left with…not
much.
The last point I must make and I urge you to listen listen to is that things can
change very swiftly. As I said in my last report… one of the leading sectors
in the market up until a few weeks ago was Health Care.
It is now being ripped apart at the seams. I am not talking garden-variety
pullback either.Â
The motto here is that even though the markets have been acting
beautifully off of the Sept. 21 lows, even though the market has made a couple
of higher highs, even though the bulls are talking again about the market
forecasting an economic recovery…this market can turn on a dime. But, so
far…so good.