Online Stock Trading | NASDAQ Follow Throughs, Again.

NASDAQ Follow Throughs, Again.


Filed Under Market Commentary |

6:20amEST  NASDAQ 100 stocks AAPL, GOOG, QCOM, RIMM lead the way pushing stocks higher notching another follow-through day since 1/31.

The overall market got a jolt from positive retail sales numbers showing gains of .3%.  However, it has been my view that technically we have been ready for a bounce since our outrageous oversold conditions.  AAPL, GOOG, RIMM, QCOM all lead the way with price gains but on lower volume (from the previous day).  Investors Business Daily has called this a follow-through day with the NASDAQ surging 2.3% and on volume 1% higher than the previous day.

Did this feel like a follow-through day?  Not at all, we saw our broken EX-leaders push the NASDAQ higher but their volume was lower than the previous day.  What we saw yesterday was nothing more than a bear market relief rally.  Normally, you would want to see new leaders pushing the NASDAQ higher rather than old broken down leaders.   Is it possible we continue higher?  There is a huge potential we could see more gains here, the real question is how you are going to play the market from here on out.

One of the grave mistakes the small investor makes is they will take a MSFT or GOOG and call them a “value” play and buy up the stock.  However, they are not values here and should not be played as a long term investment.  If you feel the need to trade, allocate a small portion of your portfolio (I mean small!!!) and make sure you take gains and cut losses FAST!  I would not incourage anyone to go extremely long here.  There are plays out there to be made, I just wouldn’t be going “hog wild.”

Options Expiry is this Friday and we should start seeing a little more intraday action as a result.  As I posted over the weekend, the past 14 out of 16 February options expiry the S&P 500 has traded lower.  I think what is more important is the overall market will be looking to next Tuesday’s release of the Consumer Price Index and the Producer Price Index later in the week.  It should be interesting to see how the market will react to these numbers.

Play it safe out there, reckless trading only leads to losses.

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