Where The Rubber Meets The Road
Nothing has
changed since my last report.
The markets appear to me to remain overbought and my sentiment indicatorsÂ
continue to flash warning signals. This is evidenced several ways:
- The VIX
and VXN are now at their lowest levels in
several months. In other words, the opposite of what happened Sept.21 — at
the lows. - Bearish advisors have now sunk to
28.6% as bullish advisors have moved higher. While not at overly extreme
levels, these contrarian indicators are going the wrong way. - I have found a bunch of $1 stocks
doubling and tripling. I am never fond of frothiness and speculation.
The good news is that the markets have
continued to ignore these numbers. I believe eventually, they will affect things
— but right now, NOT. Very simply, the
market has continued to act well and I am amazed by its ability so far to not
even pull back. So I see no reason not to continue to give it the benefit of the
doubt. Certainly, there is a ton of resistance all the way up but it has yet to
stop the move.
There are other postives to consider.
World Markets are now going along for the ride on
the upside. I have written in the past when world markets dropped along with our
market. New Lows have contracted which means the
technical bottom of the market has lifted. I have also mentioned this in
previous reports.
Now, as far as the longer term, the 200-day average
will have a lot to say about it. I have not mentioned this average because the
markets were so far below it, but they are now in the market’s site — and
amazingly so. Here are the
numbers: Dow
(
$INDU.X |
Quote |
Chart |
News |
PowerRating): 10,180; S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating):
1180; and Nasdaq
(
$COMPX.X |
Quote |
Chart |
News |
PowerRating): 1970. That is
where the “rubber is going to meet the road.” If by chance these
numbers can be breached, then the bullish argument gets stronger.
A few names for your review:
Roadway Corp.
(
ROAD |
Quote |
Chart |
News |
PowerRating) broke out above $30 and
successfully pulled back and held support.
Perot Systems
(
PER |
Quote |
Chart |
News |
PowerRating) moved out on volume above
$18. Lots of longer-term resistance.
Biovail Corp.
(
BVF |
Quote |
Chart |
News |
PowerRating) was attempting to break out
again after completing a secondary offering.
Wendy’s
(
WEN |
Quote |
Chart |
News |
PowerRating) was another good-looking Restaurant.
My next report will contain a bunch of stocks with insiders selling after a big
drop. Don’t ignore it. The last time
I put out this list, I was glad I did.