Monday, December 19, 2011

Stock Market View...Leading Stock Analysis Updated

Stock Market continues its indecisive non-committal action.  Considering all the bad news that keeps circulating around, the market & many strong fundamental leaders have held up quite well.

At this point of the year we don't really want to see much of a rally.  It will most likely be accompanied by low volume and setup a bull trap into the new year.  More constructive action would be continued sideways or downward movement with one last shakeout.  Of course leading stocks would have to continue holding their setups.  What's been interesting, for every leader that breaks apart, a new one takes its place.

The short side is too extended, wild, and more susceptible to headline risk.  While there are many old leaders setting up classic short patterns, they need more time to shake out the shorts and tighten up.

Outside of a major surprise, we continue to look for the third leg of the bull market led eventually by the large caps.  Mid caps have held up better then most and should lead early before passing on the baton.

Stay patient and dip your toes but don't let any stock move too much against you.  Cash is not a bad place to be through the new year.  As I always say, it is rare that a Bull Market just takes off and doesn't offer a second opportunity.

Review the updated Leading Stock Analysis section updated this weekend.
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