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Stocks Come under Accumulation, Big Cap Tech takes a Back Seat
By BigWave_Trader on January 7, 2010
Another day of accumulation for the market with small cap stocks taking the lead on the day. Volume was up across the board with large cap technology stocks weighing down the NASDAQ. The S&P 500 finished the day with above average volume, showing strong institutional support was displayed. This uptrend is beginning to gain strength as we move forward despite the NASDAQ lagging on the day.
While it may appear the weakness displayed by the NASDAQ is a negative for the market we have to take into the account its most recent run. While the NASDAQ has been on a tear the S&P 500 has been noticeably lagging. Today, we were able to see the S&P 500 gain strength with volume. It is important to see institutions buying up stock. They can not hide as they move large amounts of stock and we see this with volume.
Accumulation has been lacking for the major indexes over the past few months. During the end of the 2009 calendar year accumulation simply wasn’t piling up. It appears now, institutions are accumulating shares and this action bodes well for further upward price movement.
The market is now looking ahead to tomorrow’s December job report. The recent action in the market tells us we will move higher despite the number. Back in December we saw upward revisions in the October jobs number showing jobs weren’t being shed as quickly as once thought. Today, we saw strong retail sales numbers and would lead me to believe we’ll see strong revisions to the November jobs number. However, this is all guess work and in the end simply doesn’t matter. What matters, the accumulation that is underway in the market.
Opinions in this market are simply useless and will only diminish your ability to get solid returns. This market is mimicking January 2004 and if this is the case we have more upside to go. We see accumulation in the indexes and continuing is quality growth stocks moving. The trend is your friend and we continue to see an uptrend and we’ll stick with it.
Posted in Commentary