IBD 85-85 Index Rallies Over 1%, Outperforming The Overall Market, On Slightly Higher Volume; A Lot Of Beautiful Strong Chart Patterns Continue To Show Up

April 14, 2009

ALOHA! FULL COMMENTARY TODAY COURTESY OF CHRIS MAYE (MARKET SPECULATOR):

Starting the week off in good fashion stocks were able to gain traction after a bit of selling at the onset only to finish well off their lows, flashing once again bullish signs. Volume may have been lower on the day, but volume was tame during the early morning decline. More importantly, leaders began to display some explosive action. The IBD 85-85 index jumped over 1% suggesting leadership is beginning to show its might. This is precisely the type of action we need to see in order to sustain this confirmed rally, if this continues we’ll see the market continue to move higher.

An important note is the big banks are finally stabilizing, regardless if you are a permabear or bull we can not rally if these banks continued to move to new lows. I fully expect the rally in these banks will continue, although their gains will pale in comparison to the leaders we are finding. The banks simply have far too much overhead supply to really become MONSTER STOCKS. MONSTER STOCKS all show incredible sales and earnings growth as well as other stellar fundamental characteristics. Unfortunately, banks will not be able measure up to the leaders that are in the IBD 85-85. Nonetheless, it is very nice to see them push off their lows and stabilize.

A big issue for the banks is the commercial real estate market and their exposure with Commercial Backed Mortgage Securities (CMBS) and Collateralized Debt Obligations (CDO). The most dangerous being the CDOs as they use 25.1 leverage could pose significant risk if the Commercial Real Estate market implodes. It is something to keep an eye on with these banks, but we’ll be able to spot the cracks with price and volume. Until then, watch banks continue to march towards higher ground.

Our main focus is the leadership emerging here. There are plenty of stocks that have made initial runs and now looking to consolidate their recent gains. This is where we are going to see patters like a Cup with handle, Flat, maybe even a Flag base form here. It is important to make sure you keep your watch list active and you are pay close attention to their price action. They very well could be forming another buy point and if you aren’t paying attention you could be chasing the stock. Keep up with your watch list, a very important tool when you are going after MONSTER STOCKS.

I am going to continue watch these leaders build bases and look for more potential buy points. We are on top of this market and continue to take advantage of the CANSLIM method. This is an excellent opportunity to make some money in this market and we are not going to let this slip away.

Keep your eye on the ball.

Market Speculator

VIDEO ONE (11:00), VIDEO TWO (20:00), AND VIDEO THREE (25:00) ARE AVAILABLE IN THE GOLD FORUMS FOR SUBSCRIBERS. VIDEO ONE AND TWO ARE TIME SENSITIVE TO THE OPENING BELL. VIDEO THREE CAN BE ENJOYED AT ANYTIME YOU WISH ON TUESDAY.

FREE YOUTUBE VIDEO FOR TUESDAY: