Tuesday, April 24, 2007

15 Rounds

Buyers and sellers pounded it out today, with no clean knockdowns on either side.

Sellers dominated early, but dip buyers stepped in to rally stocks well off their lows as Composite volume accelerated 19%. This is bullish behavior, although mixed internals show it wasn't a solid win. While breadth was negative, Up Volume beat Down Volume and New Highs sailed past New Lows, 373-97. It's a close call, but in light of that long tail on the chart below, Tuesday edged to the bulls.

The IBD100 told an interesting tale. It lagged the broader market, sliding 0.7% as just 35 stocks moved higher. However, 6 stocks had completely horrific days: UCTT and IIVI each tumbled 19%+ on misses. Ouch. However, these 6 stocks accounted for all of the losses on the IBD100 on Tuesday. If you back out the bottom 6, amazingly the IBD100 would have posted a gain. Thermonuclear implosions aside, leading stocks continue to hold up well, and no key breakouts are failing for random, unexplained reasons.

OBV got its up day, and that long tail on strong volume is bullish. Technically, the Composite continues to look OK.

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Another bright spot in Tuesday's action was that the Banks pulled a nice bounce off their 50-day. Nothing goes straight up, but when it's time to go down, style points count.

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About seven sessions ago, Commodities began looking very wobbly, and one-by-one, the action took me out of almost all of my energy stocks. The CRB is perched bearishly at its 50-day, looking like it's ready to jump lower. If you'll recall, the broader market capitalized on Commodity weakness last summer and fall. Keep an eye on oil, PMs, etc. over the next few sessions to see how it impacts the broader market. Energy gets inventory numbers on Wednesday morning.

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Though Semiconductors are hardly out of the woods, it was a great day for the SOX. The chip index printed a 52-week high and briefly pushed through 500 on Tuesday. Should the semis continue to see accumulation, the broader market may eventually benefit from their strength. At this point, it's still a very big if.

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Amazon's numbers tonight continue the broader theme that Q1 earnings aren't any cause for widespread hara-kiri. However, tomorrow we get a fresh round of reports, plus data on manufacturing, housing and the Fed's Little Beige Book.

Lot's of stuff for investors to react to, which sure beats the alternative.

Until then, have a great evening.



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