Despite a weaker than expected retail sales figures and a bond rally US stocks continued to push off their most recent lows. European shares rose erasing Tuesday’s losses in a sign of strength and helping out early morning futures. On the day, volume was higher across the board as market participants were active accumulating shares. The Dow Jones Industrial Average and the S&P 500 remain below their respective 50 day moving averages and continue to inch higher towards the moving average. However, the NASDAQ Composite and NASDAQ 100 are currently above their respective 50 day moving average. It is clear the NASDAQ is the leader and where your focus should be. A decent day for the market and we continue to search for a confirmation we are in a new uptrend (AFTER FURTHER REVIEW TODAY IS A FOLLOW-THROUGH DAY ON THE NASDAQ ACCORDING TO OUR CRITERIA AND THE NASDAQ AND NASDAQ 100 MODELS ARE NOW UNDER A BUY CONDITION. ALL OTHER INDEXES REMAIN NEUTRAL).
If you have been paying attention to the price action of the major indexes then you know the NASDAQ 100 and NASDAQ Composite continue to be the leaders of this market. It is easy to assume you would find leadership with the NASDAQ. Typically, stocks holding up in market sell-off will be the leaders in the next rally. We have our eye on our potential leaders and they have triggered entry signals. Getting into these early leaders will provide us with sizeable gains if this market cooperates. It pays to keep your eyes and ears on the market by following price.
There are a few stocks we have our eye on as both of these are coiling for big runs. LYB and QLYS fit the bill and while they coil it is important to know where your position size, entries, and exits are. Without these three you will be lost and cause a great deal of havoc for yourself. We so many traders pick the right stock, but because they do not have a plan they wind up losing money.
Given we have a few stocks coiled it is another good sign we see a few stocks breaking out. Just to name a few: CSIQ, FLT, VIPS, PANW are just a few leadings stocks breaking out. CSIQ has been quite for much of the year building a big long base. While it may be early in the base the strong breakout on gigantic volume certainly is a good sign for the stock. FLT continues to power ahead alongside VIPS. Both stocks have been tremendous. PANW rounds out the crew and has been a Big Wave Trading Chat Room favorite.
We will continue to look for price and volume confirmation of this rally and until then we will continue to stick with our process. In the meantime, take advantage of our summer sale. Go here to get 20% off.
