July 26, 2010

Markets rose up to wide pivot on low volume. Now seriously overbought and chewing on resistance. Individual stocks broadening and improving pretty quickly – and also overbought.

Short-term: 1 green, 3 yellow – tending yellow/green
Intermediate-term: 3 green, 1 red – no tendency
Stock targets: 23% swimming, 31% neutral, 46% sinking.

Breakdown of the “swimming” stocks:
Roughly 25% are ADR’s of foreign companies. Sectors overweighted are pharmaceuticals, pipelines, semiconductors, consumer staples/packaging, specialized machinery, and utilities. And that’s pretty much it. It surprises me that this is still so narrow since I waited awhile to look at this. I wanted to see a reasonably large new influx of “swimmers”. This does tell me that there is no “new bull market leadership” here. Defensive — with some unique growth stories.

That said, I’m glad I finally did this. The green/yellow/red indicators can often just follow the indexes even though I’ve designed them to be more bottom-up and more reliable.

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