With the positive price action from last week we are going out on a limb and stating loud and proud that the market is in a confirmed rally. This is a good sign for all stocks short term and we have the accumulation days to prove it.
In our eyes the rally was technically confirmed last Wednesday and further supported with the strong close Friday after the crummy jobs report ironically enough sparked a rally. When the market does not react to terrible news it is a sign of support.
Even with this confirmed rally I am still personally 95% cash and will not be participating for a variety of reasons. If I were participating it would be playing stocks for very short term momentum and I would now be comfortable with holding positions overnight. Two month view of the S&P 500 below.
Major note here is that the rally technically ends if we see a distribution day close under 815 on the S&P 500 which is below the intraday low of distribution day one (the red #1). Also not shown on this chart is the downtrending 50 day moving average which lies at around 930. This is a strong resistance area. Four month view of the S&P 500 below.
The above analysis is a combination of CANSLIM and our own opinionated ramblings. We have been hot with our stock picks as of late so look for more positive price action and back off if that bearish close under 815 decides to manifest itself.
Longterm (6 months+) we are still bearish.
