btdstocksblog's  Instablog

Stocks continued their march higher today as the major indexes rose at least 0.6%.  The action today moves the support/resistance levels in the S&P 500 (SPY) and Nasdaq Composite (QQQQ) higher but keeps the DJIA (DIA) levels the same (see below).  Investor participation continues to be lacking and remains an area of concern that the recent rally does carry the potential for downside risk and is nothing more than window dressing.  Market breadth continues to be strong and does not indicate weakness in the market.  However, when you peel back the onion you have only two sectors outperforming the S&P 500 year-to-date so far this year (energy and industrials).  We mentioned this in one of our earlier posts this year and this relationship continues to be the trend.  Also, under the surface many stocks leading the market are extended from proper buy points or trade low volume levels.  Complacency remains high among investors.  Based on the current stock market direction moving into stock positions slowly seems to be the prudent approach.  This way your portfolio does not get hammered should stocks experience a significant correction.  If you need to own stocks, please see our watch list below.  In our watch list Nuance Communications (symbol: NUAN) rose 7.1% today.  We are going to remove the position in NUAN opened on March 18, 2011 at $17.40 at tomorrow's market open price.  Through today's session this position in NUAN is up 12.4% in 13 days.  After closing this position we still have one position opened in NUAN.

No positions in securities mentioned.