Monday, February 12, 2007

Weekend Commentary from Fallondpicks.com

Newsletter, Members Click Here. To Subscribe - click Bull icon.Bears made a long awaited appearance in the markets. The selling may have hurt the short term holders, particularly longs in the semiconductor index - but also traders in the NASDAQ and NASDAQ 100, but the larger picture was little changed. The tech averages [NASDAQ and NASDAQ 100] reversed shy of resistance, but still have a 50-day MA and sideways channel support to look forward too. The Dow lost support of its late January breakout, ending the week on the 20-day MA. The S&P finished a couple points below breakout support, but also managed to find support at its 20-day MA. The Russell 2000 didn't escape the cull, but finished well above 797 support. The markets are at important short term tests (20-day MAs) and it will take a stronger effort from the bears to break the strength of momentum bulls have developed since last summer. In the relative strength battle, large caps regained their position over tech stocks {Small caps > Large Caps > Tech averages}.

Secondary tech market internals [$NASI, $NAA50 and $BPCOMPQ] also exhibited weakness with the $NAA50 generating a 'sell' trigger in its 5-day EMA with a corresponding 'sell' trigger in its Ultimate Oscillator. The $NASI bucked the trend of the other internals and the markets as a whole by actually gaining a few points (in favor of the bulls).

Newsletter update:

GIB was knocked on the head by a mix of a tight stop and a weak market. The stock featured as a Breakout for January 31st and again for February 8th. The latter closed for a 2% loss, the former for a 4% gain. ELY was deeply discounted following earnings, cutting through its January 22nd Subscriber pick stop for a 7% loss. SUI suffered a roller coaster ride with a sequence of gains and losses to whipsaw those with the best of intentions. The February 5th Subscriber pick closed for a 3% loss and an earlier August 30th Subscriber pick for a 3% loss too.

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