Today was a solid day of consolidation for the overall market with volume falling on the trading session. After the recent run-up a period of consolidation is always welcomed. Volume once again was lower across the board, but it was a positive sign with the market mostly flat. It doesn’t take much for a market to consolidate in order to continue to push towards new highs. FB broke out on the day in heavy volume another sign this uptrend may have legs to it. There were other break outs today (noted in our Chat Room) giving us a bit more confidence this market has the ability to continue to run. Even though we only had the NASDAQ Composite finish in the green we still had a constructive day in the markets.
There will be those who will discount the breakout in FB due to its low handle. However, you can’t deny the strong price move over the recent consolidation in huge turnover. FB is a big boy stock and had been slowly basing out as the chart really tightened up. You can see the volatility in the stock dry up a good sign. Today’s move only solidifies the stock in its march towards its recent highs made back in March. Another stock on breakout watch is GOOGL. The stock is too currently consolidating although a bit looser than FB. PCLN is another name to watch for a potential breakout. These big boy stocks appear poised to punch higher helping the NASDAQ push towards new highs.
There isn’t much in the way of economic news until Thursday with Retail sales set to be released. Tomorrow we’ll get a read on mortgage applications and the US monthly budget statement. Neither should make much noise other than those who read ZeroHedge.
Speaking of ZeroHedge the site had an interesting picture depicting all the time wasted watching Psy videos on YouTube. We have to admit, they have a point:
We continue to operate on the long side of the market. It is simply foolish to choose to fight this trend just like it is unwise to swim against any current. Leave the guesswork to those on CNBC and Bloomberg and focus on price. Stick with what is moving and shed what is not.
