Wednesday, April 04, 2007

The Quiet Bull

The gains were small as volume slipped 11%, but a bullish bias to the market remains in place.

The most obvious example of the market's new mood is how it looked past two weak economic reports Wednesday morning. Even though Service and Factory data were particularly lame, sellers were few. Up Volume beat Down Volume 2-to-1, and New Highs outpaced New Lows 387-58. For now anyway, the market appears to have already discounted some bad news.

It's also encouraging to see the IBD100 continue to chug along. On a so-so day for the broader market, leading stocks put in a solid showing on Wednesday. The IBD100 gained 0.6% as 63 of 100 stocks moved higher. More importantly, a hefty 21 stocks on the index notched record highs. As we've noticed throughout this 3-week rally, the IBD100 isn't signaling the end is near.

The Composite closed above the March 21 follow-through day on Wednesday. That's a good sign. Even though the volume was light, the market held on to its gains. That's another good sign. Finally, I'm seeing a large number of stocks continuing to set up across a broad range of sectors, while the various indicators on the chart below suggest more gains ahead.

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It's been a long day and I need to cut it short, but on the eve of a holiday, I doubt there'll be much heavy lifting on Thursday. Since an important employment report comes out on Friday while the market are closed, it would be unsurprising to see investors take some off the table tomorrow, but you never know.

Until then, have a great evening.



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