There’s Only One Thing Missing That Would Confirm This Bull Move
Looking to the indices, on Wednesday, the Nasdaq opened
weak but soon found its low and began to rally. It then generally chopped its
way higher for the remainder of the day. This action has it bumping up against
minor resistance, circa 2100.
The S&P was much more impressive–nearly twice as
strong as the Nasdaq. This action puts it just past the 1155 resistance
area and has it closing at new 52-week highs.
Looking to the sectors, most remain in uptrends and are at
or near new 52-week highs. These include, but not limited to: drugs, financials,
food, health service, insurance, consumer durables, and leisure. Further,
many questionable areas such as retail, broker/dealer, selected banks, and
metals & mining (to name a few) have come back strongly as of late. The only
thing missing is technology. Aside for a few select areas such as selected
telecom, most tech sectors, like the Nasdaq itself, are lagging.
So what do we do? The follow through on
Wednesday is encouraging. As mentioned above, this action puts the S&P at
new highs. True, it would have been great if it could have zipped past the old
highs like butter but I suppose new highs are new highs–something that
certainly doesn’t happen in a bear market. As far as opportunities in individual
issues, there remain very few meaningful (new) setups. I would imagine that if
the S&P forges past its old highs and pulls back, we would see a plethora of
stocks setting up. For now, manage what you have. If you played the last
pullback in the S&P (see the archive for 02/04/04), now might be a good time
to take partial profits and trail a stop higher. This is especially true now
that this index is bumping up against its old highs.
No setups tonight.
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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