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

To: david777 who wrote (12788)	6/2/2005 10:34:14 PM
From: david777	Read Replies (1) \| Respond to of 13331

THE MARKET: Stocks tacked on more gains, rallying late to secure a positive close after a modest pullback and subsequent rebound throughout the session. Volume was decent but lower. A melt up is about the best way to describe the action, though there were some very solid stock moves that led the action. Thus it was not a completely directionless drift; leadership, the hallmark of this rally, was positive once more. Another hallmark has been the weak overall volume accompanying this rally. As noted, the indices have found strong volume on key moves (is that the chicken or the egg?), but otherwise trade has been very light. Light volume moves are always a worry; at some point sellers could wake up, step in, and send stocks lower. We are not selling everything in fear of our shadow, but we are not hesitating to take some good gain, even if interim gain ahead of our original target, when we see a good move soften a bit. 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: 11.84; -0.52 VXN: 14.95; -0.92 VXO: 11.35; -0.03 Put/Call Ratio (CBOE): 0.90; +0.22. The ratio rose even as the indices rose. While the action was softer early and that may have accounted for more put activity, we are hearing from some market makers that there are more sellers of naked puts, i.e. selling puts in anticipation of stocks rising. Nothing wrong with that at all, but when the activity picks up noticeably that is typically another indication that a move is getting a bit winded. NASDAQ Techs continued to move toward their date with 2100, rising on more above average volume and closing at the session high. Bullish. We will see how tough they are soon. Stats: +9.94 points (+0.48%) to close at 2097.8 Volume: 1.816B (-0.81%). A modest drop in volume but not a major fall off. Moreover, volume remained above average. NASDAQ is finding volume as it moves up to test key resistance, and that will help it hold the move better. Up Volume: 1.141B (-269M) Down Volume: 655M (+267M) A/D and Hi/Lo: Advancers led 1.13 to 1. Weak breadth as the large cap techs once again slightly edged out overall NASDAQ in gains. Previous Session: Advancers led 1.82 to 1 New Highs: 98 (-13) New Lows: 41 (-14) The Chart: The Chart: investmenthouse.com^ixq.html Another push higher showing bullish action after a slow start. Volume started soft and then built as the session improved throughout the day. The index even sprinted some at the close, racing toward 2100 as volume started to follow for the second straight session. In doing so the 50 day EMA (2012) crossed over the 200 day SMA (2010). That is a sign of a strengthening upside move. Typically, however, that moves is soon tested. With NASDAQ now is just 2.5 points from 2100, a level of significant resistance, we could see that test soon. This is where NASDAQ shows us what the move is made of. We expect it will pause some here; how it does so is the key. You would want to see another lateral, low volume move or a low volume pullback, both holding much of the gains. That would show few sellers and not many willing to give up their shares. Stingy markets are good markets. The large cap techs edged the overall NASDAQ with a 0.6% gain. Solid action, closing at the high on continued above average volume. SOX was the leader Thursday, surging near 10 points (1.8%) to close right at some resistance at 440, a step closer to the 450 top of its seven month trading range. At this juncture it is a good move but until it can make the breakout it remains in a trading range and indeed many market analysts view all of this action as simply being moves within a range. They may turn out to be right, but they certainly are good moves. SP500/NYSE Large caps struggled all session and turned in one of the weakest performances. Volume was light and the moves were modest as SP500 struggles to find any identity while the techs and small caps lead. Stats: +2.07 points (+0.17%) to close at 1204.29 NYSE Volume: 1.403B (-0.44%). Volume was low overall and low on the session as the large caps pushed to another gain. Very poor action, and while NASDAQ trade starts to improve the large cap trade starts to really look weak. Up Volume: 999M (-411M) Down Volume: 775M (+391M) A/D and Hi/Lo: Advancers led 1.48 to 1. The small and mid-caps were the help once more. Previous Session: Advancers led 2.75 to 1 New Highs: 187 (-33) New Lows: 19 (-4) The Chart: investmenthouse.com^spx.html SP500 continues to rise but it also does so as if it is dragged along by the NASDAQ. It is not posting stronger volume gains, and its price/volume action has deteriorated. It is not distributing, but there is no ongoing accumulation. That type of move is very prone to upset when confronted with an issue. SP500 did manage to hold 1200 once more after dipping below that level intraday. It is not strong, however, and it is not putting any significant distance on that level, and it is not finding the buying strength to really make a move out of the lateral slide the past week. Next resistance is at 1210, and it needs to get it together by the time it gets to that point. The small cap SP600 was calmer Thursday, posting just a 0.3% rise on lighter volume. It is continuing its push toward next resistance at 331.66, the last 2004 high as well as the February 2005 highs. Solid, steady move. DJ30 The blue chips when nowhere again, showing no volume. Not bad given that the index is moving laterally the past two weeks as the 10 day EMA (10491) rises to meet it. It is trying to set up unlike SP500 that is just shuffling higher. This movement, with another test or two lower, could set the stage for a stronger move for the Dow. Stats: +3.62 points (+0.03%) to close at 10553.49 Volume: 187 million shares Thursday versus 233 million shares Wednesday. The chart: investmenthouse.com^dji.html