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Continued Progress with a Pause August 10, 2012

Posted by Tom in Thoughts.
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Monday & Tuesday of last week were very positive while the last 3 days just held that ground.  But over all that’s a positive, holding on to gains and not losing them.  Check the chart below:

We see that a general march upwards with minor corrections to the progress.  So far we’re holding above 3000 on the NASDAQ Composite Index, with the next possible resistance to the up move around the 3060 level.  Interesting to note that our consolidation of the last 3 days also yielded low volume.  Part of that is “summer time”, the rest is likely a wait and see as to what the new week brings.  It’s not unusual to see most of the market action happen in the first half of the week.

Looking at the broad S&P 1500 Index price action we see a fairly healthy condition with roughly half of the stocks in the index “in the green” zone and the other half neutral (yellow) or negative (red zone).  That’s a pretty good sign, as too much of a “good thing” means that the market is over bought and extended.

And so the march upward continues, tho we should always be concerned about a major news item that could disrupt the move.  Many traders are waiting for a sizable correction of 5% or more to increase holdings.  There is no guarantee when or if that will happen.  Sectors that I currently favor are Wireless, Telecom, Biotech and Energy, with International and Emerging Markets showing some early positive signs.

Have a good week !      ……….  Tom  …………

(Note: chart courtesy of MetaStock and pie chart www.HighGrowthStock.com )

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