This Stock Could Spell Trouble For The Market
As healthy as I would like to
say things are right now, I cannot! We had the Nasdaq and S&P 500
take hits on heavy volume as the S&P returned to its 50-day moving average.
Recent selling has amounted to 4 distribution days in the
last 12 trading days for the S&P 500. The Nasdaq still has some breathing room
with only 3 d-days in the last 12 trading days. Unfortunately, we are seeing
something worse as an early indication this rally may be having trouble:
leading stocks faltering.
Hi Tech Pharma
(
HITK |
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PowerRating) and
(
USNA |
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intense volume.
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We have seeing recent breakout attempts in the growth
arena struggle. Genzyme
(
GENZ |
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its pivot point of 49.81 once again.
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Ebay attempted a move through a recent pivot point of
115.58 and managed to close slightly above it. The real trouble didn’t start
until after-hours when they reported numbers investors did not like. The
stock sold off and is probably going to cause trouble for the broad market
tomorrow.
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We are also seeing no-earnings, low-quality names such as
Priceline
(
PCLN |
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weakness. Usually, when a lagging stock picks up the reigns it is not a good
sign.
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Is there hope? Yes! The market technically remains in an
uptrend until we see further distribution. Economic conditions seem to be
improving, but our main problem is lack of individual stock leadership. We
could very well see quality names start pushing higher and sentiment would
change very quickly. For now, we’re left with a few positions that may have
done very well since the rally began, but recent action has taken us out of
newer purchases because they haven’t been working. We will continue to watch
stocks that are setting up, such as Synovis
(
SYNO |
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PowerRating) and others for an
indication of strength.
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We are in the historically slow summer period and the
fall may bring a very strong market with exceptional leadership. For now, we
must play it as we see it.
Have a great weekend,