Monday, July 7, 2014

6:18 AM

Thursday’s light volume push into new high territory was ostensibly the result of better than expected employment numbers. With few market participants based on volume numbers, and a shortened trading day heading into a long holiday weekend, it is hard to get a read on the indexes other than saying the trend remains up.  Markets often top out on good news, and the employment numbers only added to the good news.

The internals were extremely strong for some of the indexes.  The Small Cap 600 was nearly 5 to 1 with Advancers over Decliners, and the NASDAQ 100 was an amazing 15.5 to 1, 93 stocks up, 6 down with 1 unchanged. The strength was in semiconductors, biotech, pharmaceutical, and internet stocks.

The Railroad stocks are in favor with seasonality and just happen to be at the top of my most in demand groups, so I will be watching to see how this plays out.  The seasonality information comes from EdgeRater with the data exported from HGSI, a very slick combination.  The image showing the railroad seasonality is at the bottom of this report on the server.

When the herd is fully invested, or think they have to get in after missing a large portion of the bull run, this market will reverse to the downside.  Who knows, we may have seen that on Thursday. This is the way markets work, and  although we have not seen distribution yet, at some point, the air needs to come out of this balloon which would be healthy for the markets.

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