Online Stock Trading | Dow surpasses 13,000 for the first time ever, massive volume follows it.

Dow surpasses 13,000 for the first time ever, massive volume follows it.


Filed Under Market Commentary |

Traders pushed stocks higher on massive volume. Opening the day the Dow Jones Industrial Average had some difficulty maintaining the 13,000 level. However, traders were not going to let this happen for very long. By the end of the day NYSE soared 2%+ while the NASDAQ volume screamed higher by 12%+. Even disappointing new home sales could not keep this market down. As durable goods orders came in a bit hotter than expected. A great day for bulls leaving many bears left licking their open wounds.

The Dow Jones has just been on an absolute tear since the 3/21 follow-through day. The day the FOMC removed language regarding further rate hikes. Large cap stocks have been certainly fairing much better than their smaller counterparts. Let’s go to the chart:

DOW_4_25_07.png

The S&P 500 has had a few rough spots but, did manage to end the day higher.

S_P_500_4_25_07.png

Moving onto a nice stock play for tomorrow’s action. SOLF - another solar play that has been trading quite nicely into a price consolidation patter. Check it out:

SOLF_4_25_07.png

Now onto more interesting notes about the market. First off, 74% of stocks are over their 200dma and 68% of stocks are over their 50dma. Over the past few days, weeks I’ve been pointing these numbers out to you frequently. It is not to necessarily go out and short the market it is more of to put caution to your trading. We are not too trust this market, this rally is being built off the fear of missing out on a huge rally. My point, where was everyone at the beginning of 2003? That is when this real uptrend began.

There was a bit of divergence going on in the market. I would like to point out the VIX, or Implied Volitility in the options market.

VIX_4_25_07.png

After our recent run up, the VIX was falling. Now after today’s action hitting new highs we have the VIX jumping yet the overall CBOE put/call falling to .71. At market tops, action tends to be a bit choppy. I believe the VIX is starting to tell us we are now working ourselves into a top in the market. It may happen tomorrow or next week but we are working into one.

For now, I am sure there are a lot of bears who have put on some massive short positions on the market about to get squeezed. More than likely we’ll see them rush to cover their bets and sit on the sidelines. To fuel the fire we’ll have the retail investor looking to jump in hoping he/she hasn’t missed a giant move. All setting up for a “Sell in May and go away” scenerio.

Again, I would keep a large cash position on hand. For those who are jumping into the market I would do so with small positions and with a tight cut-loss strategy.

Aloha and Happy Trading,
MS

marketspeculator@gmail.com

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