Archive for July, 2008|Monthly archive page
Tuesday was the final day for a Follow Through Day to register on our logs.
Heavy buy-volume gave us the clue that institutions are stepping up to the plate to defend the market.
The S&P 500, the Dow and the Nasdaq composite climbed 2.3%, 2.4% and 2.5%, respectively.
So now we look for Leadership and top-qulaity names looking to breakout.
Subscribers will get the low-down in our next report…
The S&P 500 posted two days of follow through accumulation so far this week. But lacked the price move % for a legitimate Follow Through Day.
Odds of a sustainable rally to ensue have been improved dramatically. All we need is solid Leadership from a climbing Industry Group and some top quality names setting up…
Tuesday’s heavy-volume sell-off with an 18 year high in new 52-week lows for the NYSE is the kind of thing markets tend to rally from.
As the selling exhausts itself, there’s often nowhere to go but up.
Wednesday and Thursday’s rebound is long overdue, but we can’t ignore the still dominant downward path the Bears have been paving for us.
And more importantly, as Growth Stock players we need to wait until next week for any sign of a follow through day via heavy institutional buying to give us a signal to buy.
Banks’ bloodbath is spilling over to other areas of the market, but it’s still unclear if it’s going to burry it all.
We’ve been anticipating continued declines from cash-strapped financial institutions who still appear to be figuring out just how deep of a mess the mortgage industry has created for them.
This week’s headlines of lenders Fannie Mae and Freddie Mac becoming insolvent and in need of a government bailout is hopefully something that will lead to a closing of the ordeal. But other lenders probably won’t be so lucky in finding help.
There will be more bad news for the sector. But keep in mind the stock market is forward looking and will likely find some sort of bottom just when everything looks its worst. This could take months though.
And as the banks’ weakness swirls, other areas of the market such as Retail and Technology will also swirl, so we need to be patient buyers to avoid getting flushed during the whole process.
We’re seeing some relative strength from Healthcare as Biotech and Drugs try to gain a foothold on their major averages. We also have some top earners from the group setting up in breakout patterns (as highlighted for subscribers.)
Where Transportation was showing signs as becoming a market leader, it’s succumbed to the downward spiral of the broader market.
Energy stocks have also pulled back some, but their place above major moving averages gives them stronger potential to put in near-term bottoms and resume their rallies.
Oil’s new high if 147 per barrel only adds to the case for Energy stocks. But beware refiners as gas demand tapers off.