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MARKET WRAP UP 01/03/11
Stocks came flying out of the gate to start 2011, as the S&P 500 screamed to 1276 within the first few hours of trading, before some late day profit-taking closed the key index up 1.13% to 1271. Clearly, the lethargic action to close out December was nowhere to be found today. While some market players seem eager to call a top and are nervous about “chasing,” there are, indeed, many stocks that are breaking out of healthy technical bases and are far from extended. We have about a week before another earnings season officially kicks off, so perhaps we will see a run up until then. Either way, the trend remains higher, while fighting it has been–and continues to be–a losing strategy.
Internally, the financials continue to impress as they emerge as one of the new leaders of this market. Instead of seeing a deep market correction when it is time for the senior indices to take a rest, another possibility may be a sector rotation, with money coming out of the retail/consumer discretionary space and into financials. Moreover, the transportation and small cap stocks–two excellent leading indicators for the broad market–are sporting bullish charts that have only now started to clear their respective consolidation patterns. No uptrend lasts forever, but this one has illustrated its staying power time and time again. Indeed, it has earned my respect and should have yours as well.
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Getting a little dizzy after my first real run through of the PPT tonight! I’ve been on 2 hours now and there is so much! This may be a work in progress!
It is, indeed, a comprehensive algorithm. However, it is user-friendly. Please feel free to ask any questions you may have about it.