Upside Monday

{+++}Light volume took stocks up today as the financials led the way. Consumer confidence was an upside surprise but wallets and checkbooks stayed closed, maybe folks are saving more and the imminent fear of being kicked to the curb has subsided. The economy and the government need and want folks to spend, but after the shock of the past year it still may take time for that confidence to return. The volume was very light but the bulls are still firmly in control and the bears can’t seem to garner any negative momentum to get their own party started.

The technicals had a huge advantage of advancers over decliners by more than 5 to 1 on New York and 3 1/2 to 1 on Nasdaq.   Up/down volume was better than 5 to 1 positive on New York on lighter total volume of about 1 1/3 billion.  Nasdaq traded just over 2 billion and had a 11 to 1 positive volume ratio.

Our longs did well today, no barnburners though, although CREE is up about 10% in the after market as they increased their guidance, also a new 52 week high. IMA, ESL and PRGO continue to hang in well and look like they want to go higher, but again, a light volume day.

I put on about eight shorts last night ( Sunday will always have the most names) and only two triggered as the market was up nicely, however they triggered in the first 15 minutes and I have warned you many times to stay out of the first 15 minutes, many false positive and negatives happen in that time frame and the sharp money will see you coming and leave you with a bad print, that may have happened to you with SLB or JEC.

Since its March 6 low the market has gained 39%.  It gained 5.9% in the week of May 8th alone, as participants breathed a collective sigh of relief that the government’s stress tests for the nation’s 19 largest financial institutions weren’t as bad as feared. During that time frame the XLF is up over 100%. Things can’t be considered normal when companies continue to cost cut their way to positive earnings surprises. I think we are closing in on a near term top so stay nimble. There will be a better sense of normalcy when good news is treated as good news and bad news is treated as bad news.

We could however have a good week ahead of us, as mutual funds and portfolio managers continue to chase performance, the longer the market has days like to today the quicker it triggers performance anxiety in those managers that are sitting on too much cash, they blew it big- time last year by being too long, they don’t want to run the risk now of not having enough  long exposure.

Let’s watch our existing names for a day or two, will follow up as usual.

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