The market internals improved on nice volume....a good sign. The screened stock ratio also improved at 5 to 2 favoring buying, this time the buying was much stronger than the "5" indicates because I tightened the criteria screening, making that "5" the equivalent to an "11". (and the 2 is actually equivalent to a 3 so we would be looking at a 11 to 3 ratio, remember last Thursday we had 13 to 3 so the rising stock volume was not quite as good)
Last Thursday evening I wrote: "The market internals improved dramatically, but we really need to see how it reacts to selling before saying we have likely seen the bottom. The ideal pattern is to see a few days up, followed by that critical selling at lower volume and with fewer stocks participating. Then another explosive rally similar to yesterday" But as it goes, we don't have the "ideal" pattern, we didn't get "a few days up", we got one, and then two days of selling before we got the next explosive rally. So I'll wiggle out of trying to interpret the pattern and see how the market adjusts to the next two days of earnings. However, like I felt today, the high risk is on the side of the shorts.
It is hard not to expect to see some backing and filling tomorrow (Wednesday), hopefully it will be contained in the techs that got over extended for a one day move. Oil stocks were once again the dominate group, but for the most part they seem to have gotten a little ahead of themselves. I still like MVK (an oil service), and added it again today. So if you have an oil, add AWK, ....(who said oil and water don't mix <g>). Coal stocks may be going up, but they don't fly, so check UNP.
Long: AAS, AWK, AXE, BMET, FO, HOTT, LDG, MXT and WY.
Good Trading!!
Sam
savvy-trader.com |
