Monday, February 19, 2007

Fallondpicks.com: Weekend commentary

Newsletter, Members Click Here. To Subscribe - click Bull icon. Friday saw a weak breakout in the Russell 2000 (at least a new closing high) as the past five days saw new closing highs for large caps [S&P and Dow], combined with decent gains for the tech averages [NASDAQ and NASDAQ 100], but as yet - no consolidation breakouts for the latter averages. Volume climbed in the Dow, S&P and NASDAQ 100 - but given Friday was an options expiration day the overall volume was very light.

There were some technical improvements with the bearish divergence of the MACD trigger line of the NASDAQ breaking, along with a relative strength gain for the NASDAQ 100 over the Dow {Small caps > Tech averages > Large caps = most bullish alignment for the markets}. I have drawn new rising channels for some of the indices in my public Stockchart.com chart list (if you follow the link then please give it your vote by scrolling to the bottom of the screen - it is the only way I know people appreciate the work).

There was little technical change for the tech market internals [$NASI, $NAA50 and $BPCOMPQ] although volatility gave up 13% last week and is fast approaching deep oversold territory.

I am bullish for a 1 month period, but bearish for 3 months+ (although my longer term bearish outlook has been in play since October and has been a bust). Readers of Bill's (aka No DooDahs) excellent blog will no doubt read of his disdain for the cash position, but given it easy enough to get 5% or more for no risk I remain in favor of cash positions until markets reach a point of retreat (on oversold internals) to allow for greater equity exposure.

Newsletter update:



CYTR was a Subscriber pick for January 10th and a Breakout for February 8th. The former closed for a 101% gain, the latter for a 42% gain. BOL was a Subscriber pick for February 1st. It failed to gain ground, drifting into its stop for a 3% loss.


 
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