Friday, April 20, 2007

Large Caps Party!

Tech and to a lesser degree, small caps, got the case of the Downer Debbies as the Nasdaq struggled to post the gains seen in the Large caps. Its struggles were all the more surprising given recent strength in the semiconductors. The Nasdaq has a case for a double top:



But there are no such concerns for large caps:




while small caps fell between the fences with some nice gains today, but still some resistance to overcome:



The end result was to leave a substantial divergence between the tech averages and the rest of the markets. The problem for the large cap rallies is its hard for buyers to know when to step in; every buyer likes to 'get a deal' and its hard to do this when the market rallies every day. Look at the degree of pullback in the large caps from late March, and compare that to early April and this week; greed is overcoming fear. Who will be left holding the can? There is likely better potential for gains in small caps and tech because orderly buying can been seen from well established pullbacks to support.

The Trade Ideas scan was buoyant in the short term with the most recent 8 picks coming in at 1 minute. But the "20-hit list" had only six candidates over the entire day:



If you would like to try a full version of the Trade-Ideas software, follow this link for a free 7-day trial.


 
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