Stocks shook off Friday’s sell off reversing course and closing near the highs of the day. Perhaps the perceived victory by Scott Brown in Massachusetts help drive Healthcare stocks higher. Regardless of the reason, stocks drove higher. Volume was lower after a quadruple witching Friday. The bottom line is the market was able to shrug off a poor earnings report from Citigroup and close near the highs.
In our chatroom Friday I alerted to our members the inability of the VIX index to close near its highs, not even its mid-point. Sellers simply were complacent during Friday’s selling leading me to believe the action had more to do with option market makers repositioning themselves for next months expiration. Quadruple witching Friday always plays interesting games with stock prices and it make it increasingly difficult to make any deductions from the action. With that said, the VIX did clue us in on the fact Friday’s selling wasn’t done with vigor.
Repeatedly we inform our members not to fight the trend. Today proves our point once again. Although Friday’s action added a day of distribution the leading index the NASDAQ has only two! After today we have another day of distribution fall off the S&P 500 giving the index only 4 days of distribution. Are we nearing a top, possibly but the signs are simply not overwhelming.
We still continue to find great longs and our current longs are doing well. This uptrend remains intact and we believe it will continue. Our portfolios are positioned to take advantage of higher prices.
Many Wall Street pundits have been touting a stock market rally if Scott Brown was to win in Massachusetts. Tomorrow, we’ll see if this is true. Although, today’s action may have been projecting a win for Brown.
Enjoy
