The List To Keep Your Eye On
As quick as the ink was drying on my last report, the market
pulled back on cue. A few things stood out. First, the
Dow did not confirm the breakout in the
Nasdaq and the S&P 500. In fact,
a picture of the Dow shows definable resistance at approximately 8525 . Second,
many stocks had become stretched from their moving averages. As I told you, this
occurrence does not continue for too long. Third, short-term sentiment has been
off the page as no one has been betting on a drop.
But as of this second,
this pullback should not sway you from what really matters…and that is the
fact that leading growth stocks are starting to work. Names have broken out. All
that is needed is a pullback into support on lighter volume…and the good news,
this latest pullback had very light volume. This indicates a lack of buyers
right now, not heavy selling. Of course, if selling picks up, we will react.
It is at this point in
time, I am going to do something I have not done much of…show you charts of
leading names that I want you to keep your eye on. All of these names acted well
off their earnings. Keep focused on these names as they will tell you a lot
about market conditions going forward. If the leaders fail, the market will
fail. Simple as that.
AMGN is extended but gapped up off of their recent numbers. This
stock has been leading the BIOTECH INDEX. Keep focused on this name. It may also
become buyable if it pulls back on lighter volume towards support.
EBAY has been leading the comeback kids…the INTERNET. EBAY is
very extended, so only buyable on pullbacks. Keep in mind, this popped off of a
very short base.
AMZN just gapped out of a base on 5x average volume. Another
INTERNET name that needs to be watched as well and possibly picked up on a
pullback.
I used these three just
as examples to show you that there is strength. Of course, that could change.
Keep your eye every day on the NEW HIGH LIST. If the list continues to grow,
that will tell you that the market continues to gain strength. I would take the
time each night to look at the charts of any new names joining the list and
gauge whether breakouts will continue to work or start to fail.
Lastly, for the
hundredth time, watch the SEMIS. Once again, when they topped, the market
topped. I have not seen a lot of damage just yet, but seeing a few names
starting to gag.
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