Buyers step up as leaders continue to shine
A better than expected jobless claims figure couldn’t help stem the selling pressure placed upon the market by CSCO stock. Panic set in very early on and the market appeared to be succumbing to the selling pressure. However, buyers stepped up just after 10 o’clock hour pushing the market to its high of the day. Many market pundits looked at the news out of Egypt as the reason for the lift in stocks, but you simply cannot deny the support shown by the market.
Leading stocks once again showed amazing strength as leaders such as BIDU stock and NFLX stock. PCLN stock is another market leader who has shown tremendous strength. We do have a new buy signal out of another market leader signaling this market may prove it has much more to go. We want to be on the market leaders and stick on them.
AAII sentiment survey saw the percentage of bulls drop below 50% and bears remaining below 30%. The level of bullishness has yet to bring down this market. Remember, the survey asks responders whether or not they believe the market will be higher 6 months out. To judge near-term bullishness is much more difficult and quite honestly a fruitless endeavor. Remember when Doug Kass called for the market top back in late fall? The “call” was incorrect and has cost those who have followed it money.
We do have a market with an elevated level of distribution days, but it isn’t cause for concern yet especially when we have our market leaders. Do not focus on when the market might turn, but focus on the leaders and how they are acting. When leaders, like we saw in January break down and bounce back it is a signal of a strong market. It is quite amazing this market, but why fight the trend when you can make money sticking with it! Remember; cut your losses your short!
