Taking The Necessary Steps
The good news
is that I have returned from Las Vegas without losing my
shirt! Also good news is that the major indices are moving higher today and
volume is running much heavier than yesterday on both the Nasdaq Composite and
NYSE. Fortunately, I don’t need to talk about the bad news because you’ve
already seen it over the past week.
It is good to see volume running so
heavy on the indices, and I have also seen several sentiment indicators moving
in the right direction. Bullish/bearish investment advisors are not making me
drool, but they have marched a couple of steps in the right direction. Bulls
currently stand at 52.7% and Bears stand at 30.1%.
I also like to see more 52-week lows
to stand alongside a slightly reduced number of 52-week highs. As of Monday’s
close, there were 234 new 52-week highs versus 148 new 52-week lows. It is much
easier for the majority opinion to become bearish, which
is what we need more of, when there are not 300+ new highs and the
new lows are in the single digits. The recent market and weight of the major
indices has obviously helped us out.
Recent breakouts have been very
uneventful. At best, they have rallied a couple of bucks and then taken a hit
that has left them below their pivot points. Some have recovered, but some have
not. Of course we would all like to see them follow-through without looking
back, but the positive spin on this action is that the “big guys”
(institutions) are not letting them fall apart either. Take the recent recovery
of Movie Gallery
(
MOVI |
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PowerRating) for example.
The stock got knocked over 15% below its pivot of 17.99 and has since recovered
to set new highs.
If the market is able to build on the
current rally over the next week, it will help the chances for growth stocks
tremendously. Many of the growth names that I am watching are all having a very
solid day today alongside the market. Autozone
(
AZO |
Quote |
Chart |
News |
PowerRating) has reclaimed its pivot point of 76.10.
Itron
(
ITRI |
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Chart |
News |
PowerRating) has returned to its former trading range after re-testing its pivot
point.
DRS
Technologies
(
DRS |
Quote |
Chart |
News |
PowerRating) is attempting to break its pivot of 46.10, but
seems to be having some trouble.
Right now, the market is taking the
necessary steps that are required before it can enter into the next unequivocal
Bull Market that we are all waiting for. Making observations about the major
indices and individual growth sectors and stocks are important on a daily basis.
The next step to look for is whether or not today’s rally can confirm itself
with further upside over the next week.
Until Thursday,