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Saturday, November 23, 2013

Leader Charts

We have a pretty big divergence between the market and the leaders right now, with the market up marginally but, overall, the leadership list down big, about 1.5%. Decliners outnumbered gainers 11-9, which doesn;t seem bad, but he size of the losses outweighed the size of the gains. NUS was the biggest gainer. This one had a nasty drop a couple of weeks ago due to a report that is was a multi level marketing outfit (a la HLF), but refused to go lower and eventually started it way back up, culminating in a breakout yesterday. This could end up like HLF, with a high short interest, and big moves in both directions with no warning on news events.  This one could be hazardous, but right now it is one of the strongest stocks in the market.

CSTE was the second biggest gainer. It was building the right side of a base this week, and hit resistance right were the pivot point projected a target.  This will most likely form a handle in here, but it could try a breakout at any time. Premature breakout attempts will most likely result in failure.

NOAH was the biggest decliner. Last Friday (the blue arrows point to last Friday's candle) this had a pre earnings breakout: on Monday, when it reported, it had a very nasty reversal. Since then it hasn't dropped much, and I will be watching this to see if it can resume the up trend: the 50dma may be the ideal entry point, if it gets that far.

LL barely beat out PRLB as the second biggest decliner, and this all came yesterday. This one has been hit twice in the last six months by news related events, both involving government (buying illegal lumber, no resolution was ever announced) but there was no news that I saw. There was a story about Whitney Tilson, a hedge fund manager, shorting the stock, which was apparently what caused the collapse. This came back from the prior two collapses pretty quickly, but I'm not so sure it can withstand much more of this. I must be nice to be able to talk down a stock you are short, and get away with it.

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