«
»

Broad market following tech higher?

The market’s positive action last week – including new recent highs for the Nasdaq – has turned the current trend picture back to bullish from the mixed picture it presented a week ago. While the market in general remains extended and sentiment indicators are still negative – both possible causes for concern over the intermediate term – the odds of a breakout to new highs over the shorter term appears to have increased.

New positions
No new positions this week.

Watchlists
Stocks of interest showing up on this week’s “upside strength” scans include 1-800-FLOWERS.COM (FLWS), Advance America (AEA), Alon USA Energy (ALJ), LSI Industries (LYTS), Packaging Corporation of America (PKG), SonoSite (SONO), Taiwan Semiconductor Mfg. (TSM), Target (TGT), and Western Digital Corp. (WDC).

Not much new on the “oversold” scans this week, with the only new addition being Pacer International (PACR).

Related Posts:

This entry was posted on Sunday, July 8th, 2007 at 4:00 pm and is filed under Analysis, Market, Watchlist. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

2 Responses to “Broad market following tech higher?”

  1. Dear Sir,

    Thank you for recent post. Still watching the market to get back in. Last few weeks/month has been like watching a rodeo.. Just not sure if the bear or bull is winning (My bet is on the Bull for now)

    Todays mid day action looks like a break-out to upside is close. Just to uncomfortable yet for me to feel a confiction either way.

    Question if I may..

    what indicator(s) do you watch for the general sentiment of the market and against what indices…

    Thank you for continued posts.
    Best Regards,
    FS

  2. Hi,

    There are a variety of sentiment indicators available, but the main sentiment indicator I watch is the CBOE Equity Put/Call Ratio, which tracks the ratio of the total put and call volume for all optionable equities. (It excludes index options, which could distort the reading due to their heavy use in institutional hedging strategies.)

    A high level of call volume relative to put volume – that is, a low reading on the index – is indicative of a high degree of bullish speculation among investors, which is usually a good, although not precise, contrarian signal. Likewise, a high level of put volume relative to call volume (represented by a high reading on the index) indicates a high degree of bearishness among investors – usually a good sign that a bottom may be near.

    Currently the Equity Put/Call Ratio is at a low (bearish) level, but can certainly go lower. And it seems likely to do so, since, as you point out, the bulls definitely appear to be in charge.

    Thanks again for your interest.