Thursday’s action saw 256 new stocks “breaking”. The vast majority were breaking down like Chinese sex toys.
An overwhelming 95% !!!
Sorry, but that’s just too much. Levels like that reflect the extreme pessimism that is pervasive throughout our great and fearful land. We’re going to get a reversal here at some point.
Furthermore, the bull/bear pattern ratio is now at only 19.8% (under 20% is oversold territory). That is a complete flip flop from early last week when it was over 80%. Again, look for a reversal back to the upside perhaps today or Tuesday.
Early leaders: There were only a handful of stocks breaking out of the chute on Thursday. I bought RIMM , which broke a triple top. Some of the other stocks that were bucking the downtrend are worth noting:
It’s interesting that these stocks are in sectors like tech, financials, semis, retail consumer, industrials, and biotech/healthcare.
Note: If you tend to be more conservative and want to play a potential reversal to the upside, look at buying those stocks that are trading or have traded through resistance already, and are beginning to break higher.
Happy Friday. Carry on.
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