Settling near the highs of the session stocks put in a solid day of consolidation. Volume fell more than 20% across the board, a very good sign institutions weren't selling. After such a big run up, a day or two of consolidation is a very healthy signal. Crude oil settled lower, but natural gas is in the midst of forming what it appears to be a bottom. While a positive sign for those drilling for the natural resource, but not a particularly good sign for consumers. At the end of the day, we saw a very positive signal out of the market and we continue to ride this uptrend starting at the beginning of this year.
Another few days of the market pulling back would do us some good. 88% of stocks are above their 50 day moving average. Normally, at these extreme levels we do get consolidation. Does this mean you act upon thinking a pull back is about to happen? No, pullbacks are apart of the market and we welcome them as we live within this uptrend. If big volume selling takes place we'll start taking a different tone, but for now, we stay the course and execute our game plan.
BAC continued its tear leading the Dow Jones Industrial average higher. Financials continue to perform well despite the negative press. It is nice to see banks perform well; they tend to lead the market higher in new uptrends. WFC and PNC are two other stronger BIG banks doing well. A bit of consolidation for the bank stocks around their respective 200 day moving averages would do them a bit of good.
NFLX and GMCR two former top quality stock All-Stars continue to mount comebacks. We are seeing quite a few of these old names like AKAM and CSTR come back to life. DNDN is another former high flyer coming back to life. As always, sound money management is a must and cutting losses should not be avoided at any time. Even these former high flyers coming off their lows are not exempt from the plan.Solid start to the week and would not be surprised if the market continued pulling back. The uptrend remains strong and there is no reason to think otherwise.
Disclosure: I am long DNDN.