Monday, March 1, 2010

State of the Market - 3/1/10

The month of March started on a strong note today on Wall Street, as stocks started the day higher and continued higher throughout the session. The Nasdaq strongly outperformed the S&P and Dow, rising throughout the session and finishing at its highs for the day. The S&P and Dow started strong but quickly leveled out after the first hour and a half or so. They still finished near their highs for the day, just not with the same sized gains as the Nasdaq. Volume was strong on the Nasdaq but very weak on the S&P, which is odd. We can never have it easy, can we?

Technically, the major indices closed above both their 50 day moving averages and key resistance (1112 on the S&P and 2251 on the Nasdaq). The Dow however did not - something to watch. To be honest, I expected the type of move I saw today in the Nasdaq to also occur for the S&P, and we didn't see that, although commodities were lower and that may be the reason why. Financials also lagged, which might explain some of the S&P underperformance. With the Nasdaq and Russell 2K doing so well today, it makes sense to focus on those types of names if you're going long, as they certainly appear to be the leading indices now.

From the video last night, we did see some nice movers - UCTT, SFLY, KLIC, RDWR, and PCLN all were up over 4%. I was all ready to get some long positions started today but there was no real volume on the stocks I was watching in the first 20 minutes of trading and so I passed once again. With my work schedule, that is really all the time I can spend checking out the action until the end of the day, so it makes it tough. I can't catch the midday movers and so I am missing out on some nice plays. I almost went into SFN on a slight breakout early on but again, volume was lacking, and I am glad I passed based on how it finished. Meanwhile, a stock that did not make my final cut last night (XTEX) had a great breakout today. Go figure.

I think this remains a stock-picker's market and opportunities are out there if you're careful. Is it an easy market? Heck no - prime example is the trading of CAAS and TSTC today. Both are China stocks, and before today both of their charts looked quite similar. So how do you pick? I don't know - one was up 10% and one was down 10% today.

I am still looking to get long and will do so if the opportunities present themselves but I am also not rushing into things. I have my names on a few stocks from yesterday's video in particular that I think can make large moves in a short period of time, but I have to wait for that trigger. As I go through my scans tonight, I will share any other setups that look appealing and are new. Take care and good luck Tuesday.

No comments: