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Friday, October 7, 2011

Friday Morning Update

The NFP numbers are in, and while they are better than expected, they weren't enough to give the market any juice today. The Dow jumped at the open and pulled back, but the Nasdaq dropped, so apparently the market is going to be a bit schizophrenic today. Now I have to wonder about the jump we got this week: did someone get the numbers in advance? That would explain the seemingly inexplicable rally we got all week, and the tepid response we are getting now. Anyway, enough of my paranoid rantings and on to the chart. I really went out on a limb with today's range; basically no matter where we are today i will be right. 1150 is going to be the key klevel I will be watching; if we manage to get as high as 1175 I suspect we will see some fierce resistance, but at this point I will be surprised if we get there. Today we are looking for an o.Neil follow through day, but so far I doubt we get it today. Leading sectors this morning are XLP, XLU, and XLY; lagging are the usual suspects XLE, XLB, and XLF. The Nasdaq and Russell 2000 are both lagging. Oil and gold are up, treasury yields up pretty big. Hmmmm.

I have 11 new highs today, with breakouts in PROV and RAI. I have nothing reporting this morning.

4 comments:

Y.Y.B.C said...

I'm looking for Follow Through just like you are. I'm thinking about setting my threshold at 2% gain due to higher volatility, what do you think?

David said...

Hi YYBC

2% sounds good to me, but if we get really high volume I might go as low as 1.5%. I will also be looking at the performance of the leadership list and relative strength list, you will see a lot of high volume gainers there as well.

Y.Y.B.C said...

Im having a hard finding real leadership in this market so I'm worried we are backing in a choppy market again. I just hope we won't get another follow through day that's outside of the 4-10 day range Oneil recommended.

I thought yesterday's volume set up will be prefect for an easy follow through today, afterall, the market just does what it wants... Ha

David said...

I actually don't expect to get one, although I guess it can come at any time. If you look at what was leading up the last 3 days, it was generally the weakest stocks, so i would guess it was mostly short covering triggered by that late day ramp we got on Tuesday. I still think we have another leg down, probably somewhere near 1050.

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