Bears Can Not Follow-Through On Yesterday’s Weak Close; SOX Index Leads The Market Higher As Technology Stocks Come Back To Life

I had another rough day today but this time it was on the financial end. I have been receiving a ton of 0% to 3% interest rate offers recently from my various Credit Card companies. Everything has always worked out well as I max out the balance, move it to my stock market accounts, get an excellent return on my money, and then return the cash back before the APR moves back up. This has ALWAYS worked well.

However, today I learned the horrible ignorance of some offers. Luckily, this one is the only one like this, but my 2.99% special offer and regular 9.99% rate, due to the mail NEVER SHOWING UP IN MY MAILBOX, has been JACKED UP TO 29.99%!!! I have been a customer since 1999 and this is Bank Of Amerca’s way of saying thank you for NEVER having a late payment. It seems even if it is the mail carriers fault, if you miss a payment, your rates on EVERYTHING goes to the highest possible and it take six-months to reverse. So now instead of a nice steady payoff, I have to take the full amount out of my stock accounts and pay the whole damn balance off as I refuse to pay 30% interest rate!! This completely ruined my day only because I get great margin rates AND NOW is the time you want to be putting that money to work. So today has gone completely wrong and therefore I am going to bullet point my talking points as I have no interest in writing a full commentary tonight. I wrote too much in the longs analysis anyways. Paying subscribers can get there fill there.

-the NYSE short interest ratio has hit another all-time high of 13.63. It now almost takes 14 days to cover all the shorts. WOW!

-Stock indexes closed at the HOD across the board which is very bullish especially after yesterday’s weak close.

-NYSE and Nasdaq reclaimed their 200 day moving averages. This was the first time for Nassy and second time this year for NYSE.

-volume was higher on Nasdaq, with the 1.5% gain, giving it another day of accumulation and another day of an above average volume rally.

-for the 39th straight day NYSE volume was below average and was lower than yesterday according to IBD and slightly higher according to TCNet. when it is like that it is hard to load up on 200% to 400% margin knowing that the big boys are not bidding up the major market indexes. Only select stocks making it a stock picker’s market. Thank GOD that is what I do for a living.

-The Philly SOX index led the way with a 2.05% gain thanks to a 5% move in INTC after a LEH analyst raised his price target.

-have you noticed that a lot of people (including myself) are all looking for the market to make a short-term top. we are starting to call it overbought, thus becoming nothing more than “top callers.” that might be the ”wall of worry” this market needs to climb higher with that 13.63 short interest ration on the NYSE.

-a distribution is being removed from the Nasdaq after today’s powerful gains have sent it over 5% above the 4/20 distro day. that along with it now being above the 200 day moving average makes that day irrelevant as we are well beyond those levels of selling. occasional distribution days are ALWAYS normal during uptrends. it is the amount and how quickly the next one follows, if it follows.

-CNET up 45% after CBS buy. This is VERY bullish for stocks–that kind of reaction.

-175 of the 197 industry groups in IBD were higher with many groups having leading stocks make strong gains on strong volume. this is just more bullish numbers.

-a few impressive stocks I am not long that I am watching to get long on this impressive day are WGOV, SINA, SOHU, DR, RIG, CYBS, FLIR, and about 100 other. You don’t have this many nice charts in a bear market. But…where are all my DGLY charts?????

-where is the heavy volume accumulation in the indexes. volume is finally coming in consistently above average on the Nasdaq which is VERY GOOD. but without a few huge accumulation days I do not have faith this can last for much longer without eventually getting hit with a solid round of distro. if volume does come in I would be a LOT more bullish on the overall market and not just a few select sectors I see rotation in.

-newbies must not chase stocks that are extended–MVL SINA PDO and many others–in this market as the low volume will offer many whipsaws I am sure in the not too distant future that will really hurt the bottom line of those chasing stocks 5-10% past proper pivot points or the 50 DMA.

-the only two complacent indexes that tell me on the short term we have gotten too bullish is the put/call at. the number finally fell below .65 to .64 which is the lowest since January right before a nasty selloff. So the crowd is definitely getting complacent on the rally and I am sure it will not be too much longer till the market reacts accordingly.

-the VIX is at 16.30 and is definitely showing a reading of a crowd that has come to embrace this market. This is the first time the VIX has been down here since 10/11 and it clearly shows that the crowd has gotten used to the rally, for now.

Hopefully, it will take only a little bit of selling to get that VIX flying and the put/call back to the 1.00 level. For now, the crowd is starting to really embrace this rally and I personally can not find a lot of bears even though it is obvious via the NYSE short interest ratio they are out there. A pullback might be enough to scare us higher.

The charts look really good and there are a TON of stocks that are not only building round bases and breaking out to all-time highs. But there are also a TON of stocks building nice round bases near their 52-week lows which means that the stocks that were falling are no longer hitting new lows but building a very nice round base with strong accumulation. Stocks looking like they have bottomed include PHM ATI CAVM CVLT PWER BYI ODP NTWK OSTK CMCSA. As you can clearly see, they are everywhere in all industry groups. Take that with stocks like HUSA FSIN SOL CSIQ DGLY and you clearly have a market that is under a real rotation process away from commodity winners (see the drop in DE and FEED past couple of days?)

At this point in the commentary, I am, once again (remember I have Multiple Schlerosis and one of the MAJOR problems is fatigue–I used to never be tired like I am now), to tired to continue on. If you go back and read the last 3 to 4 entries I am sure you will COMPLETELY understand where we are at in the stock market and how I feel about our longs.

Once again, it was another great day as one of my top 15 BIGGEST holdings that make up 85% of my account, was up today in a big way giving it a 52% gain in one month (VISN) and if you take that with my other 50% winner in one month (DGLY) you can guarantee that I am having a KILLER month that has made up for the extremely rough January, February, and March period. April came in with a baby roar and so far it has morphed into a full blown tiger growling and roaring as it moves doing whatever it please.

Aloha everyone, I wish a great Aloha Friday and I will see you in the chat room anywhere from 630am to 7am HST. ALOOOOHA!

P.S.–Pray for surf this weekend as I need to get wet. It has been over 7 days and watching the Finals from Teahupoo of Bruno Santos (Brasil) vs. Manoa Drollet (his home break and backyard; Tahiti), after watching a great semi-finals where C.J. Hobgood just couldn’t get it going and I think 26!!! heats yesterday, has me wanting to get out there. Neither could Slater who won the first two events earlier this year but fell short in Billabong Pro Tahiti Teahupoo