We’ve Seen This Before
You’d think
you would get used to a down day in the market…it’s not like we
haven’t seen this before! The NYSE posted a day of distribution on Friday,
while all three indices closed down on the day. As I write this, the major
averages are all under obvious distribution. On a positive note, the Put-to-Call
ratio did spike above 1.0 on Friday, indicating the necessary nervousness out
there for a rally.
Over the weekend, I did see a few more
names setting up than the previous week. Pediatrix
Medical
(
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PowerRating) has worked up the right side of its base and is
forming a handle.
Right
Management Consultants
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PowerRating) has been working through a
multi-week base, although it has shown some distribution over the past few
trading days.
Cross Country
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PowerRating) is attempting a breakout of its recent, V-shaped base. This will be
a good recent IPO to watch, although I wouldn’t be surprised to see the market
weigh in on this one.
As I looked into what I saw setting
up, I realized the quality names I would like to see just aren’t there yet.
That usually will coincide with the market itself. I would expect quality to
start appearing as the market firms up. This recent selling in the market may be
what the sentiment indicators need. As I have been saying over the past month
and a half, sentiment has been too complacent. There are too many advisors
bullish and not enough bearish. The Put-to-Call ratio has finally been coming
around after the recent drubbing the market has taken. All of this will
eventually come together as the market emerges on its next Bull Run.
Until Thursday,