What You Must Realize Now

The
market was in rally mode, if only for a day.  The major indexes
closed higher on heavier volume for the first time since 6/7.  Unfortunately,
we have yet to see above-average volume come into this rally that has not
shown us a whole lot.

 

 

 

Other than wearing investors
out it has been very unproductive over the past several weeks, despite the
fact that we remain in a confirmed uptrend.  Growth stocks have not offered
much in the way of opportunity.  Stocks like Resources Connection (RECN) broke
out on heavy volume and rolled over.  This is not the healthy action that you
would like to see indicative of higher prices in the market.

 

 

Qualcomm (QCOM) tried to
break out of a double-bottom base with a pivot point of 69.10 on 6/8, but
volume was below-average.

 

 

^next^

Don’t get me wrong, the
market could continue higher and these very same stock could go along with it;
but it is very uncertain and hardly worth the risk in my opinion.  If we
started to see new set-ups like Axcan Pharma (AXCA) break out on extremely
heavy volume and advance to quick 20% gains, I would be much more optimistic. 
We have yet to see a 20% gainer, which usually indicates real strength and
leadership capabilities.

 

 

Urban Outfitters (URBN) is
extremely extended from its original base of a year ago and currently stands
out as one of the best performers of this current rally.  It broke out of what
appears to be a 3^rd or 4^th stage base and is up about
17%.

 

 

Also hailing from the retail
sector, Aeropostale (ARO) has made a low-volume move to new highs from an
extended position.  It moved past its pivot point of 25.30 and is up about
16%.

 

 

This market is hanging onto
its current bottom of 1865 on the NASDAQ and the gains above that, but volume
has been extremely light.  It is best to tread cautiously and realize that
there is a higher degree of risk in trading right now.

Tim Truebenbach