The strangest thing I have seen in this market

  • March 21, 2006
  • Tim Truebenbach



Timothy J. Truebenbach is the President of True Capital Management and
general partner of True Capital Partners LP, a hedge fund. He uses a
disciplined model that trades on the intermediate-term time frame. For a
free trial to Tim’s Nightly Stock Analysis Report

href=”https://tradingmarkets.comsubscriptions/details.cfm?item=5915&subcat=it”>click here or call 888-484-8220 ext. 1.

You just cannot be
too excited about the action we saw in Tuesday’s trading.
The NASDAQ piled on another distribution day on above-average volume. This
heavily indicates that we are seeing large sellers very willing to continuously
unload stock at the market’s current levels. The Dow
(
DJX |
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were below-average, but still technically a distribution day.

The strangest thing we have been seeing in this
market continued as there was positive action out of a few individual stocks.
CBOT Holdings (BOT) made a nice move through resistance around $128. This
fundamentally strong company went public in October and has picked up the
leading reigns from the groups that it is from: Financial Services.


Charming Shoppes
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attempts from base patterns. Both companies exhibit triple-digit earnings growth
in their most-recent quarter, but CHRS felt a little more pressure as it
attempted the move.

 


Recent breakouts: CH Robinson
(
CHRW |
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CWTR |
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also trading just off recent 52-week highs. The divergence we have seen out of
this market has been constant rotation. For example, when the NASDAQ is weak, we
see underlying strength in names such as the previously mentioned. When the Dow
was pushing back above 11,000, we saw small- and mid-cap stocks correct or
consolidate. In fact, since the market confirmed its current rally in October of
2005 we have seen broad rotation rather than any kind of constant broad rally.
It seems as though picking your spots to invest as well as take profits has been
the key to making the most money possible. Otherwise, despite all of the doom
and gloom, most major indexes are at or near new 52-week highs. Remaining
constantly invested has returned a profit!

Moving forward, there is no doubt the market is closely watching the Fed for any
indication as to the direction of interest rates and future hikes. Reminiscent
of 1994, we may just have to wait it out; BUT if current day is anything like
the mid-90’s we should have no problem doing so for the reward that will await
us.

Exhibit Patience and remember a great quote I recently heard: “If someone or
something bothers you, simply change your point of view.”

Tim Truebenbach