Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Friday, July 23, 2010

Full steam ahead...

You can put me down in the bullish column now. We got the 5 MA itself crossing the 50 MA today, Wall Street's confirmation signal that the rally is on. Today's trading action is exceptional for one particular reason, as I mentioned last night the advance/decline was at plus 4856 and we needed to have a pullback to either zero or closer to negative 3000, the beginning point for the next oscillation up. Normally it takes 1-2 days to go from overbought numbers to oversold numbers but as the market opened today it was at the negative 2500 with just a minor pullback in the indexes that just lasted the first 30 minutes. Then at 9am the advance / decline started a new up oscillation & charged up all day. This doesn't just happen. Wall Street is bent on not letting the shorts get back control of the market. The best thing about it was that in pulling so many thousands of stocks back down just a little, the big caps that really move the indexes hardly had to pull back any and in a period of minutes we went through what was normally a 2 day sell cycle and the indexes only went negative for less than 30 minutes. Now we are already well up in the next oscillation. This only happens when institutions are going in big and fast on everything.

I'm listing an update on the current trades. Of the 5 limit buy orders I mentioned last night and entered premarket this morning, 4 triggered and executed within 1st hour of trading.

Trade duration 3 days:
SSO - in at 35.06 - current 36.80 (+5%)
QLD - in at 55.57 - current 58.57 (+5%)

Trade duration 1 day:
MBI - in at 8.00 - current 8.49 (+6%)
PMI - in at 3.51 - current 3.85 (+10%)
RDN - in at 8.94 - current 9.09 (+1%)
BYD - in at 8.26 - current 8.44 (+2%)

CIGX - still has not reached 1.90 buy trigger price

I'm going to spend a lot of time this weekend looking for the second wave of runners which will kick off their run when the advance/decline gets back down in the negative 25000 - 3000 range (it closed tonight at postitive 3874 which means that sometime Monday, maybe afternoon, we should get our next pullback but don't count on a just a 30min pullback, each down oscillation will typically be longer than the previous one throughout the rally).


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