Big institutional players became interested in the market today as stocks flew higher on a surge in volume. Perceived positive economic data helped set the tone early on for stocks. However, buyers simply stepped up to the plate to acquire shares. Bears were taken out to the woodshed as many were crushed in big name stocks. Will the bears have enough left in the tank to take on the bears? Mid-day stocks took a breathier digesting the run from the morning. At 2pm, the FOMC meeting minutes were released and helped stocks push higher into the close. The NASDAQ and S&P 500 were able to close near their highs showing strength right into the close. Insitutional buyers stepped up to the plate in a very positive manner suggesting we will see higher prices in the stock market.
Leading stocks were able to run along side the entire market today, but failed to keep up with the NASDAQ. Although not terrible news it simply suggests the interest isn’t in the quality growth stocks just yet. However, there are plenty of “loose” candidates that are moving quite nicely in this market. I have said to be careful not to dive into a stock heavily unless it has all the qualities of a prior Monster Stock. We do have a few of these in the market at the moment ready to be picked off. However, I am unwilling to plunge into a stock just yet as we simply do not have the kind of leadership out there to do so. With that said, we have found plenty of tremendous winners in the past few days it has been nice to see. Our next step is to get the leading stocks indexes to really take over and continue our march higher.
A ratio I haven’t mentioned in quite sometime is the New High versus New Low ratio. Remember, history has shown in order to see and ride a Monster Stock is you must have a positive NH vs. NL ratio. Today, only 5 new lows were made on the NASDAQ and NYSE. Pretty impressive and what is even more encouraging is 199 stocks were able to make a new 52 week high today. Almost a 40 to 1 ratio which is outstanding for a stock market rally to see this ratio so high.
Pay attention to the June highs on the indexes as they might present a bit of resistance as we march higher. Take a look at the following two index charts, they look very bullish:
Remember, we are focusing on “what is” and at the moment we have a market that appears it wants higher ground. We also have stocks that are pointed in the same direction as the indexes!
Enjoy your Thursday.
