This Quality Company Is Still Outperforming The Herd
The
stock market just doesn’t excite me at this point. From
late January, we have constantly seen the same pattern of high-volume declines
and low-volume rallies.
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Today’s trading was
no different as the major indexes pushed slightly higher on less volume than
yesterday. Technically, we’re in the middle of a correction that has brought
the Nasdaq about 10% off of its high just over 2100. Any market decline of under
20% is coined a correction. Anything over 20% is a bear market. So far, we are
not in the latter, and one thing makes me believe these declines won’t
lead to that.
^next^
First of all, most bear
markets have a tricky way of starting and lead many to believe it is still a
Bull Market. For example, the market topped in March of 2000, but we still saw
a huge rally in June of 2000 and large point and percentage rallies later that
same year.
This correction feels much
more similar to the market declines in 1998, where the average sold off hard,
marked by the top on 7/21/98 to the eventual follow-through day on 10/08/98.
We saw hordes of distribution
in late January that the market has capitalized on by dropping with very few
bounces.
I have said it before and
I’ll say it again, right now is a great time to prepare a laundry list
of quality companies acting better than the rest of the herd. I cannot guarantee
Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating) will continue,
but the last few days showed more strength than the market. We saw evidence
of accumulation on 3/17 and 3/19 while the stock dropped on lighter volume over
the past two days.
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Hang in there and we’ll
keep an eye out for a change in the environment.
Until next time,
Tim Truebenbach
timt@tradingmarkets.com