Broad Based Market Participation

Over the last few weeks, we’ve witnessed a steamroller, or broad-based market rally which is confirming market participation is not controlled by a handful of stocks.

Analysts on “the tube” would have you believe the FANG stocks are the only reason behind the then-current Nasdaq performance. Fast forward a few weeks and those same analysts are talking about stocks aside from Facebook, Amazon, Netflix, and Google. Names like Micron and Applied Materials roll off their lips, confirming our conviction. Focus on the IBD50 and you’ll be fine.

Focus on the IBD50 and you’ll be fine. The watch list is populated with IBD50 candidates every week. Performance rank for the week is below.

We might add to NTRI today, as the prevailing trend unfolds. JBLU, RHT, USG, AMAT, and ALRM are candidates showing no signs of letting up.

SPY 60-Minute Chart

We’ve made a lot of noise over the past week, pointing out block size activity by institutions. Since the break above the last zone of major blocks at 250.50 where resistance became support, we’ve once again managed to stay above 254.70 and 254.60, the most recent levels of block support and resistance. Late Thursday, blocks began to show interest in the 255.05 level, as traders formed a line overhead. This morning we see price action trading at this critical point.

As we can see, pre-market price action is above this recent block trade level. So, it appears we will trade higher for now. That said, we will watch for a fade, as we may see some signs of short-term distribution. Activity will taper off dramatically as we approach the noon hour on the East Coast.

Remaining above the 255.05 level by the close should be the objective of the bulls. If we do not close above this line, reference the 60-minute chart above for levels below, 254.70, 254.60, 253.97, 253.50 and so on. Fibonacci levels are noted for reference.

Finally, if you have shares of AAOI, know that I plan to sell my shares and put that money to work in stocks that are heading higher, like AMAT or NTRI. The object of this business is capital preservation, after all, so we will not give AAOI a second thought. Dwelling on a losing position affects your psyche the longer you hold on.

Have a great day,

Vinny

Join us at 9:20 AM for LIVE trades during market hours today

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