Meaningless And Boring Day On Lower Volume For The Indexes Ends With A Lot Of Individual Stocks Making Nice Moves

September 7, 2007

Despite the inside day by the NYSE and near-inside day by the Nasdaq, there was some nice action underneath the market. There were 108 new 52-week highs compared to only 73 new 52-week lows and there were many stocks that either broke out of good or sloppy bases or are setting up in nice bases. This positive action was not noticeable on August 29th when the market confirmed the rally attempt but now the action in stocks is starting to shape up nicely. All of this despite the low volume.

My scans were pretty dry after the August 16 lows and subsequent follow-through. Granted, there were a few nice gems but besides that there wasn’t much out there that looked nice besides the leading big-cap tech stocks. However, now we have a lot of charts that are setting up nice bases and appear ready for breakouts sooner rather than later. The only problem with some of these charts is that a lot are making right sides of bases on low volume. That is the opposite of what you want to normally see. Higher volume on the right side is what you are supposed to see in strong stocks. A weekly chart of AIRM is the best example of what you want a weekly chart to look like.

The clearly two most exciting groups today were the semiconductors, with the SOX rallying .7%, and the gold group which saw a 6% jump with stocks involved in the Metals-Gold/Silver group. In fact, confirming the moves in those two groups, the Electronics-Semiconductor Manufacturing group has moved up from 107 to 27 the past three months. The Metals-Gold/Silver group has moved from 131 to 50 the past three months, also confirming the strength in this group. However, few stocks are showing up from the gold group so I am not too sure how long this groups strength will last. But if the action in stocks like MEAS is any indication, the Semiconductor stocks should be doing well, as long as this market continues to rally.

Besides that, there is not much else to talk about that I have not hit on before. Complacency is making its way back in the market, with the put/call ratio falling to .83, so that might cap the upside a bit here. However, price and volume is our key tool for making money; indicators like the put/call ratio are only accessories to the outfit of price and volume.

Despite all the continued worries and talk over the jobs report tomorrow and the subprime woes that are still ever so present in this market, the market continues to move ever so slowly higher giving me more and more longs everyday. So that proverbial wall-of-worry is still there to be climbed, if that is what stocks want to do….now, if only FALC can climb that wall to go along with the rest of my longs that are acting very well the past few weeks, I will can be a happy man.

ALOHA and I will see you in the chat room!!!!

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