Today let’s look at the A/D line but instead of the NYSE or the Composite let’s break it down by Morningstar’s 31 sectors. In the same picture we’ll also look at the number of 52 week highs by sector and the new highs as a percent of the total stocks within that sector.  I’ll let you draw your own conclusions:

The minus signs on the AD lines do not mean anything, it’s merely a function of when you began the calculations, so read nothing into the negative signs but perhaps look at the relationship between yesterday’s reading and the High A/D line over the last few years.

Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in your own powers you cannot be successful or happy.

- Norman Vincent Peale

For more detailed economic data click “Today’s Calendar” in the navigation bar to the left.  

Overseas markets are listless to a little bit down this morning: Nikkei 225 -0.95%, Hang Seng -0.25%, Shanghai -0.14%, DAX -0.04%, and the FTSE 100 +0.05%

At about 7:40 AM ET ahead of a pretty heavy calendar today, the futures are somewhat directionless: Dow -5, S&P -1.2, NAZ -2.5, Oil -$0.48 and Gold +$2.40

have a great day!

The Set Up

1. The stock must first puncture and close outside (above) the upper Bollinger Band. The closer the closing price is to the high of the day, the better. The bigger the day’s advance, the better.
2. On the following day, the stock must ‘gap’ down below the prior day’s close. This ‘gap down’ is crucial as it serves as the most important criteria of the entire strategy. If the stock does not open for trading below the prior day’s close by at least 50 cents (preferably more), no action should be taken. We need weakness right at the open. Example: If on Tuesday the stock closed at $40, we want to see the stock open for trading on Wednesday no higher than $39.50. It must open down!

Note: In many cases, this gap down will be caused by either an exceptionally weak market open or a negative news item on the company, such as a brokerage downgrade. But in either case, the gap down signifies major selling (profit taking), and the pros who short will be loving it. Keep in mind that both the above criteria must be met before action is taken.

Running an exploration program I found against my database of Optionable stocks only one showed up.

All the breaks you need in life wait within your imagination, Imagination is the workshop of your mind, capable of turning mind energy into accomplishment and wealth.

- Napoleon Hill

For more detailed economic data click “Today’s Calendar” in the navigation bar to the left.

Asian markets are roaring back from recent weakness and Europe is still on the flat side: Nikkei 225 +1.17%, Hang Seng +1.72%, Shanghai +1.93%, DAX +0.75%, and the FTSE 100 +0.51%

At about 7:40 AM ET appear to be following through on yesterdays advance, at least prior to the PPI at 8:30: Dow +25, S&P +2.9, NAZ +3.3, Oil +$0.66 and Gold +$10.10

have a great day!

Despite yesterdays small give back the A/D line remains well above the bull market high.  Maybe the bull move is over, as of today, but this indicator does not suggest that it’s so. Last week we looked at the advancing minus declining volume on the NASDAQ composite and saw how that was also setting new highs.

Unlike bottoms, tops often take a long time, many months to complete.  If this market makes it’s high in the same manner the 2007 high was made, these two indicators may give us the warning needed.

Perhaps it would be too convenient, perhaps not.  In any case my point is that as traders we must try and move when the odds are in our favor.  While a correction is possible, at any time, of course, do the odds appear to favor a major down move here? I thought so!

A ‘No’ uttered from the deepest conviction is better than a ‘Yes’ merely uttered to please, or worse, to avoid trouble.

- Mohandas Gandhi

For more detailed economic data click “Today’s Calendar” in the navigation bar to the left.

Chinese markets are lower to begin the week, at this writing Europe is flat: Nikkei 225 -0.28%, Hang Seng -0.27%, Shanghai +0.53%, DAX +0.75%, and the FTSE 100 +0.47%

At about 7:40 AM ET ahead of Housing Starts and Import Export prices and while we await the FEDs decision on interest rates the futures are little changed: Dow +9, S&P +2, NAZ +3, Oil +$0.42 and Gold +$9.30

have a great day!

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Clicking for today on the Industry Groups:

Members: By clicking on any heading you will resort the entire report by that heading. Ascending order first, descending order second. Much easier than fooling around with Excel, IMHO.

Non-Members: Below is a link to a Microsoft Excel Spreadsheet containing the above information as of last Friday the 12^th. Note: The file below is in Microsoft Excel 2007.  If you have an older version it will not open. However you can download Excel Viewers and view the files. Whether or not you may copy the data into your version I am not sure at this time.

Complete List: Morningstar Industry Groups

This is only one of three nightly reports, the other two are Changes and Trends, and Relative Strength.  These reports also exist for ETF (not internals), and Selected Indexes.

All difficult things have their origin in that which is easy, and great things in that which is small.

- Lao Tzu

For more detailed economic data click “Today’s Calendar” in the navigation bar to the left.

Chinese markets are lower to begin the week, at this writing Europe is flat: Nikkei 225 +0.01%, Hang Seng -0.62%, Shanghai -1.21%, DAX -0.02%, and the FTSE 100 -0.16%

At about 7:45 AM ET ahead of Empire State Manufacturing Survey and Industrial production the futures are little changed: Dow -12, S&P -1.7, NAZ -3, Oil -$0.37 and Gold +$4.90

have a great day!

I will let each come to their own conclusion for each.

Have a Wonderful Weekend!