Friday, September 10, 2010

State of the Stock Market - 9/10/10

We saw another up session today on Wall Street, but with volume coming in low once again, nothing really important happened.   Hopefully trading volume will increase in earnest starting next week. 

I maintain my belief that the market needs to consolidate if it is going to rally strong through September, but right now we are grinding just slightly higher instead of consolidating.   Perhaps this is one of those times we rest as we move slightly higher (happened a lot back in '09) but we'll just have to see.   The numbers and the market overall remain bullish and so you should be looking for longs.   Ideally, however, we would see some rest.   I don't like seeing the type of action I have in leading stocks like JKS and RDCM the past few days, where they went parabolic and then reversed very hard.   I mentioned both of those this week as potential warning signs but as of now they are the only two I see that give me pause.  

Meanwhile, the individual stocks I am watching are for the most part pulling back very nicely.  So much so, in fact, that I am wondering if I need to just ignore what the overall market is doing and focus solely on them.   The problem right now is that I don't see enough really nice charts to get rid of this feeling that we need to rest before moving higher.  I only have 8 or so stocks on my potential buy watchlist and that is not a traditionally large number.   Meanwhile, I see a lot of stocks extended and no where near any reasonable buy points and perhaps that is what is really getting at me.  

Overall, the market remains bullish and I am looking for longs, but a light pullback would help to lengthen this rally significantly in my opinion.   I'll be back this weekend with the video - until then, take care and enjoy yourself.  

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