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Strategies & Market Trends : IPO and Other Stock Plays -- Ignore unavailable to you. Want to Upgrade?

To: david777 who wrote (12736)	5/31/2005 11:22:42 PM
From: david777	Read Replies (1) \| Respond to of 13331

THE MARKET: The indices sold on rising volume, but they are holding near support on this pullback. Given it was month end and the higher volume that has been associated with that day of late (see February and April), the generally orderly action, and leadership that is holding near support, we were not stressing overly about the higher trade. Breadth was flat, the losses were overall modest, and there were still some good upside moves. Thus for now, even with this pullback, the rally is still in good shape. We don't want to see the volume increase even further on any continuing pullback. Volume was up near average Tuesday as the month ended; if it was just end of the month shuffling we will need to see the price/volume action return to positive, i.e. up on up sessions and lower on down sessions. For now NASDAQ remains the leader, and small caps are trying to help out as well. Both posted very modest losses as SP500 along with DJ30 led the selling as AIG, IBM and other big names sold on rising trade. NASDAQ is in good shape, refusing to give back much of its move. SP500 is becoming a liability, however, as it is becoming an anchor chain after trying to lead in early April but then failed and turned into a laggard. NASDAQ has its work cut out for it as it takes on more of the burden for the market's rally. MARKET SENTIMENT Bulls versus Bears: Bulls rose again to 46.7% from 46.2%. Bulls bottomed in early May at 43.5%. Bears dropped sharply to 26.1% from 28.6% after hitting 30.4% on the high in early May. That was the highest bearish level since August 2004. VIX: 13.29; +1.14: VIX is bouncing on the modest selling, but it is just coming off the low levels that triggered the last pullback. VXN: 16.08; +0.93 VXO: 12.5; +1.24 Put/Call Ratio (CBOE): 0.99; +0.18. Another jump in put activity on an overall modest fade in the market. NASDAQ Volume was up close to average as NASDAQ pulled back, but it was a very modest fade in the bigger picture. Stats: -7.51 points (-0.36%) to close at 2068.22 Volume: 1.666B (+31.55%). Volume jumped significantly from very low pre-holiday trade on Friday. It was the highest trade in two weeks but it was also the end of the month and NASDAQ has shown volume spikes on three of the last four months. Distribution, but given the circumstance we are not concluding it was a change in view by the big money with respect to their stocks they have been accumulating. Up Volume: 700M (-39M) Down Volume: 944M (+444M) A/D and Hi/Lo: Decliners led 1.08 to 1. Very flat breadth. The large cap techs were down a bit more than the overall NASDAQ, and that is what pushed the index lower. Previous Session: Advancers led 1.24 to 1 New Highs: 89 (+10) New Lows: 43 (+12) The Chart: The Chart: investmenthouse.com^ixq.html NASDAQ gapped lower but it fought back twice intraday, managing to turn positive in the last hour before some of that month end shuffling dropped it back down. You never like to see an index close on a selling note, but given the overall action and the timing, the move was not nefarious. NASDAQ is still well above near support at 2051 and the 10 day EMA at 2047. NASDAQ 100 sold 0.5%, pulling the overall NASDAQ down with it. The breadth was flat, and that shows the move was large cap based. As with overall NASDAQ, however, NASDAQ 100 is still in good shape. SOX was underwater as well, but its 0.3% loss was also modest as it basically moved sideways for another session after bouncing to a new recovery high over the April consolidation range. It has the look of working laterally here as the 10 day EMA (423.82) rises to meet it. That would set the stage for the next leg higher to test interim resistance at 440 and perhaps the top of the range at 450. SP500/NYSE The large caps along with DJ30 were the anchors on the market. Overall stocks were lower, but SP500 in particular was more threatening with its decline. Stats: -7.28 points (-0.61%) to close at 1191.5 NYSE Volume: 1.48B (+42.16%). Volume jumped to its highest level in two weeks though it was still below average. That was some consolation along with it likely being attributable to end of month position swapping. Price/volume action on NYSE has been the worst in the market of late, and while not overtly signaling trouble, we want to see it recover and provide some support to the rest of the market or at least not a detriment ot the other action of NASDAQ and the small caps. Up Volume: 720M (-124M) Down Volume: 1.09B (+587M) A/D and Hi/Lo: Advancers led 1.04 to 1. The small caps helped keep the action in decent shape as the large caps suffered. Previous Session: Advancers led 2.2 to 1 New Highs: 134 (+33) New Lows: 23 (+8) The Chart: investmenthouse.com^spx.html Friday's problem at 1200 continued today for SP500 as it twice tapped at that level and twice was unable to make headway. Indeed the index turned sharply away form 1200 both times with pronounced swings lower just as on Friday. The large cap indices, tech and non-tech, were the clear laggards, and while they were not wantonly selling off we want to see the action at this resistance improve, i.e. see the volume dry up some on anymore testing. SP500 bounced off of support at the April high (1192) intraday, but by the close was back down to that level. We don't want to see it dip much more below this level, perhaps to the 10 day EMA (1189) on this selling. That does not give it much rope to play with on this test. The small caps lost ground as well (-0.1%), but were the relative leaders in the market. As with the other indices they were sold rather aggressively to end the session, giving back the modest gain they had scratched out in the afternoon session as they tried to take out the April high (324.64) and join NASDAQ and SP500 with that distinction. The small caps gave up their leadership status to start 2005 after a rocky December that was showing some distribution after a long run. They have now based out for several months and are showing signs that they want to try to establish some leadership. A strong break over the April high will be the clearest evidence that is occurring. DJ30 DJ30 was the downside leader Tuesday, falling back from its low volume bump into the April high (10,557). It managed to hold the 10 day EMA (10,461), its near support, but volume was close to average, the second highest trade in three weeks. Some notable names such as AIG, IBM, and AA were down on volume. With that, it was hard for the index to post any upside. It needs to hold near this level for a move higher, as this is near the bottom of its recent two week lateral range where it is trying to form a handle to the 7 week double bottom that formed in April and the early part of May. Stats: -75.07 points (-0.71%) to close at 10467.48 Volume: 240 million shares Tuesday versus 168 million shares Friday. The chart: investmenthouse.com^dji.html