Market Confirmation: Market In Confirmed Uptrend
Short Term Action:
(Red Alert for longs) Buying on pullbacks but too stretched to the upside to enter here (Good time to take profits) Light volume drift upward to overbought levels can make for an ugly pullback early in January with just average volume. Prepare for a pullback.
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For 2011 we will be adding a couple important enhancements to our nightly reports.
Not only is it critical to be in the right stocks at the right time but when you enter into a high probability stock setup and the major indices are ready to pop as well, then you can really get some big moves with lowered risk.
Going forward we will be posting our normal stock setups and will also be indicating whether we have the market winds at our backs. Short Term Indicators will be: A Green Flag for a safer time to get long, A yellow flag for neutral and a Red Flag when we are overdue for a pullback and initiating any new longs is very dangerous. As our readers know, we have been the first to point out every top and bottom over the past 3 years. We were taking profits before major selloffs and buying again before any other services saw a bottom.
We post stocks when they have a high probability to make a big move over a short period of time but one can now choose to be more or less conservative with their trading by choosing to trade only when the market is ready to pop along with a stock setup or to take all of the high probability trades whether the market is ready to move in the same direction or not.
Like we mentioned it is not a great time to be entering new positions at this point in the market. Despite this potentially deadly drift higher, many of the leading names have continued to selloff on light volume as well. Will these former favorites find support and rally back or will higher volume show up next week and slam these names back down into longer term support levels. If the latter occurs we could see a lot of pain in these stocks. LF was stopped out today with a loss and NFLX and CSTR reversed to trade lower on the day. We may decide to take small losses versus flipping a coin and hoping for these names to bounce.
We did however get a couple nice moves in ATPG up 6.23%
And MOS is finally moving out closing up 4.7% higher
No new setups for Thursday.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.