Friday, September 24, 2010

State of the Stock Market - 9/24/10

Up, up, and away.   That's what we say today on Wall Street, as stocks shot up hard in the first half hour of trading and gave nothing back the rest of the way, closing with gains of over 2%.   Most of the action did take place early and there was only a slight upward trend the rest of the way, but nonetheless the action continues to be bullish and stocks keep moving higher.  Volume appears to be higher, particularly on the S&P.

Technically, we just keep chugging higher.   The three day pullback was enough I guess on the S&P and Nasdaq, but unless you were buying yesterday, entries were hard to find today.  I mentioned yesterday that I just didn't see many setups even after the three-day pullback and that many of the big boys (AAPL, BIDU, NFLX, etc) were still very extended.   There were two stocks on my list last night (ARMH and REXX) that had great sessions today but besides that, I don't know what I would have been buying today (and ARMH was a huge gap that I wouldn't likely have chased anyway).   The market keeps moving higher but it's very hard right now to find good buy points - if you bought back back in early September, you're sitting pretty.  Otherwise, the market hasn't given too many chances to hop aboard this seemingly runaway train.

The Russell 2000 and financials remain under their June and July highs and that remains a negative divergence, but both outperformed today so maybe they will just be in catch-up mode.   One other positive from today is that the semiconductors seem to be ramping up here as well.  I am frankly amazed that the Nasdaq has run so far with the semis underperforming on a relative basis, but it is what it is.  Who knows how high we head if these start moving too?

Chart from Telechart, Courtesy of Worden Brothers, Inc.

I'll be back this weekend with some more thoughts, but right now the market just keeps moving higher.   I continue to see a ton of leading stocks that are very, very, very overextended (MIPS, SOL, AMZN, INFA, BIDU, HS, INFN, NFLX, AAPL - take your pick) but it just doesn't seem to matter.   Amazing.  Take care and enjoy the weekend.

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