Today the market gave the bulls almost exactly what they were looking for: a minor pullback on lighter volume.Now the ball is in their court. Will they follow through? We shall see, starting tomorrow, with a patch pitch right down the middle: today's volume should be quite easy to beat. The bulls also have a couple of other things going for them, they most important being the green bar on the elder impulse chart yesterday, and the second being the fact that CMF barely dropped in the last down leg. Now for the big problem: this is July, so any rally will be tough to sustain for very long.
The Nasdaq is really showing some big time strength here, although it did take a hit volume wise today. The mid point between the recent high and low was tested today, and held. This, too, has a very strong CMF, so there probably wasn;t a lot of big money selling during the last down leg.
The Russell 2000 has a little problem here: the midpoint between high and low is not a support, but a resistance, level. Unless it can break past that middle line and stay above it, i don;t have a lot of optimism about a potential up trend.
I missed last week's sector post, so was a bit surprised when I saw the sector rankings (by RSI) today. XLE is now in the lead nad has had a very strong run for over a month now. That hould not be too surprising, since this took a big beating in May and June.
The financial sector had a pretty good day today, which is why it is not still in last place. That is now occupied by XLV, which is one of the defensive sectors that were leading the market during May and June. The fact that this, along with XLP and XLU, are dropping in relative strength, while the "risk" sectors (other than financials) are moving up, is an indication that the market is in a more bullish mood. XLF has made a bif two day move, so that could move up, although it has a lot of work to do.
Tomorrow is day 4 of this rally attempt, the first day of a possible valid follow through day. Several big names are reporting in the next few days, so we could get pretty good volume.
I am not a financial professional, just a guy that trades my own account.
I am also not a musical professional, just a guy that makes music on the computer. Thus, two blogs, one trading and on musical.
And, no, the picture is not me, it is the late, great John Belushi, one of the inspirations for these blogs.
This blog is focused on technical analysis of stocks and markets, putting heavy emphasis on chart analysis. My trading style is derived primarily from my mentor, William "Yoda" O'Neil, and the focus here is on leading and breakout stocks, but all forms of trading are covered to some extent. Economic and political news that effects the market are also topics here, and the blog may occasionally become a platform for my political and philosophical ranting. I keep several spreadsheets on Google docs which track various aspects of the market and readers are welcome to vies and comment on them.
Google Docs Spreadsheets
There are several spreadsheet that I maintain on Google docs to track various watchlists and trends in the market.
1. The earnings list - a group of small and micro cap, low float stocks that have exhibited recent rapid earnings growth. They are modeled along the lines of William O'Neil's CAN SLIM system, but limited to small cap, highly volatile stocks.
2. The relative strength list - a group of stocks which are near 52 week highs and have shown an increase in average daily volume. The list is limited to the top 200 stocks according to my methodology, which will be detailed on one of the pages of the spreadsheet.
It can be accessed here, and is also updates weekly.
3. Relative strength by industry - Uses industry data from Finviz.com to track the percentage of stocks within each industry that are in the top 25% of the 52 week price range, looking for trends.