Stocks Pullback As Nasdaq Suffers Its Second Distribution Day In The Past Few Weeks

October 4, 2007 | Leave a Comment

I have had a very rough day of physical pains which I believe is a reaction to my beta serun-interferon shots that I have to take for my MS (I just upped the dosage). Therefore, I have to keep this short as I have been working my butt off on the longs, shorts, and updating the forums. All of that…and don’t forget I have to actually execute ALL of my orders. So by now, I am burned out. I have not eaten much today and just feel drained. So thank you very much for understanding.

I just want to state that today’s pullback in no way had anything scary looking about it. Volume barely ticked higher from yesterday on the Nasdaq and on the NYSE volume even pulled back. So I would not panic over anything today or start top calling. I especially wouldn’t top call after watching JRJC take back its old highs after CLEARLY putting in a MAJOR reversal pattern a few days ago. This market simply has too much juice.

The put/call ratio did drop to .79 today which signals that despite the fall some traders did find the pullback worth buying. But at the same end, once again, the NYSE short-interest ratio hit another all-time high. So while the market barely pullsback, traders take more stocks in as shorts. Very odd.

Small Caps And Tech Stocks Rally As Big Board Stocks Take A Breather; Leading Stocks Roar High Well Outpacing The Broad Market

October 3, 2007 | 2 Comments

Today was a deceptive day to say the least. When I first woke up (around noon in NYC) I saw that the market was pulling back in a nice calm fashion digesting recent gains. However, I had no clue what was going on underneath until I finally updated my charts. What followed can only be described as a very pleasant surprise as stock after stock I was long was putting in some big gains.

That mean that despite what the indexes said today the market was much stronger and has a lot of pent of buying pressure in it. Small Caps and leading stocks led today with the SP 600 and Russell 2000 putting in a .8% and .9% gain respectively. I am not sure how leading indexes did, since IBD did not publish them. But my personal IB account had a nice 7.6% gain on the day sending my account in another new high for the year as many of my longs put in 3% or higher gains. One new long, last night, produced a 15% gain. Another long mentioned by another reader named vivek in the chat room made a 75% gain. And he was riding that one higher!! On top of that the man that called JRJC is now up 262% (I can not give him credit because he did not go long his own recommendation). It still was a great one!!

The Nasdaq was barely selling off today when it also found a nice bottom and rallied higher, eclipsing the morning highs, and closing at its HOD. That is a bullish move, without a doubt. The SP 500 and NYSE also recovered all of their losses and closed about unchanged but still below yesterday’s close.

Posted by Joshua Hayes | Filed Under Market Commentary

Stocks Continue To Rally Despite The Best Attempts Of The Bears; Small-Caps Take The Reigns From The Big-Caps

October 2, 2007 | Leave a Comment

Stocks put in another impressive session as stocks rallied steadily all day long closing near the highs with the SP 600 leading the way with a 2.3% gain. The big gains came despite bad news from C and UBS. UBS lost $2.4 billion and C’s profits fell 60% yet the stock market rallied in the face of the bad news. This clearly tells us that the bulls are in complete control as bad news is now treated like good news.

Today’s strong gains set a couple of milestones as the DJIA crossed the 14,000 level again closing at a new all-time high and the Nasdaq hit its highest close since February 2001. The only problem with these new highs is that they are happening on very low volume in relation to the 50 day volume average. It would be nice if the indexes were hitting new highs on the back of big surges in volume. However, the comfort today is that volume did pick up over Friday’s level. That gave the market an accumulation day (a big one, I might add) much larger than the distribution day on Friday. On top of that, breadth was 3-to-1 positive on the NYSE and 5-to-2 positive on the Nasdaq with 508 new 52-week highs to 170 new 52-week lows. This shows that even with the low volume, the whole market is participating in this rally. That is always more bullish than a select few big cap stocks being the only stocks moving.

Speaking of stocks moving, there is no stopping the IBD 100 full of leading stocks and my personal portfolio. The IBD 100 gained 2.2% today and I came away with a fantastic 4% pop out of my account today. This is your clear indication that top quality stocks are being treated much kinder than the general market. Once again, as with most rallies, the best chart patterns and stocks with great fundamentals are blowing away the competitions value strategies. It is the value investors that are, right now, trying to talk this market down and are bashing momentum investors for buying “every” breakout.