This market is all over the place!
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
click here or call
888-484-8220 ext. 1.
Technically speaking, this market is
all over the place! The S&P 500 and the NASDAQ faced a blatant
divergence when the technology-laden index set a new low on 7/13 while the S&P
500 held the previous low from 6/14. Take a look for yourself…
As this divergence emerged, we are also seeing price and
volume playing havoc with the market’s direction. 8/3 showed accumulation, or
institutional buying in the market and August 8th (yesterday) displayed subtle
distribution. As of this writing, the NASDAQ is on track for a positive day and
volume is coming in much heavier than yesterday. The mixed signals we have been
seeing have made it very difficult to determine the market’s true trend.
If you are a very nimble and have a strong strategy for
short-term swing trading you may be finding strong opportunities right now. If
you focus on the intermediate-term trend such as myself, cash and the sidelines
have been a great place to spend time. The best time to invest in stocks is when
the trend is clearly higher, otherwise 3 out of 4 stocks may very well drop in
price.
Oil has remained strong and so have oil stocks. While it is
not a great time to buy stocks, it never hurts to ‘window shop’ for names that
may work if the market established a strong uptrend. Giant Industries
(
GI |
Quote |
Chart |
News |
PowerRating) is
setting up in a cup and handle base pattern. The company sports stellar
fundamentals and earnings growth as well.
The market is in a downtrend and while it is best to avoid
stocks on the long side during this stage it is important to be ready when the
trend changes.
Tim Truebenbach