Friday, May 02, 2014

US Stock Market Flat Lines While NYSE Advance Decline Line Continues to New Highs

Today's action was a touch more exciting then watching paint dry. After a week of wild intra-day swings, and positive closings, the market traded mostly sideways for the majority of the day, but not before a morning seesaw ride. Closing little changed in lower volume. 

Leading growth stocks outperformed the market for a third straight day, but need to start powering and following through on their moving average bounces, preferable in heavier volume, or risk stalling and retesting recent lows. Fleetcor Technologies (FLT) made a major move up the right side of its cup shaped base, Cabot Oil and Gas (COG) has started tp form the handle of its cup shaped base, and NPS Pharmaceuticals (NPSP) continues to round the bottom of its cup shaped base.

Short trading ideas continue to consolidate around major moving averages preparing to roll over with the next tide of selling. Still a major sign of weakness with the current market rally. Typically these will start to break higher rather stay tight.

Nothing wrong with a bit of a rest after the gains made after Monday's reversal bottom, but let's not sit around too long to unnerve the already extremely nervous sellers and profit takers. The NYSE advance/decline continues advancing into new highs, making it hard to be too bearish yet. 

In general, the market and leading growth stocks need much more time to setup a major sustainable rally. With value leading and a few growth stocks bouncing, short term, the current rally still has some legs, but very shaky.

Few positions triggered tighter stops, broke out, or followed through on recent gains. Giving traders little to do. But, with little follow through and potential stalling at moving averages, traders need to keep tight stops in case another shake out develops on unexpected news headlines over the weekend or next week. For now, stay patient with current positions and look for new entries on pullbacks. Unless, current positions start triggering protective stops en masse. Then, cash may become a great position and sell in May and go away can begin?
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