Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim's Nightly Stock Analysis
Report
click here or call
888-484-8220 ext. 1.
Last Tuesday, we were very bullish on the market
and guess what? This week we are even more bullish! The major indices are
performing very well along with very strong leadership out of individual growth
stocks. The put-call ratio of .97, last week laid further doubt on the current
rally and is a very good sign.
It is a great thing when the market is rallying, there are strong growth stocks
leading and we can still find investors that doubt the rally is for real. The
leading indices flashed distribution on 9/19, only to overcome it on 9/20 with
mild selling the rest of the week.
We are seeing growth stocks coming from all over the market. Large-cap names
from the financial services area include Morgan Stanley (MS | news | PowerRating | PR Charts ),
Merrill Lynch (MER | news | PowerRating | PR Charts ) and Franklin Templeton (BEN | news | PowerRating | PR Charts ). These
stocks display strong earnings growth and have all recently broken out of sound
base patterns to advance to new highs.
We also have smaller companies that have been pushing higher in similar fashion.
Some of these names include US Global Investors (GROW | news | PowerRating | PR Charts ),
International Securities Exchange (ISE | news | PowerRating | PR Charts ), Hittite Microwave (HITT | news | PowerRating | PR Charts ),
Digital River (DRIV | news | PowerRating | PR Charts ), Rogers Corp (ROG | news | PowerRating | PR Charts ), Towers Groups
(TWGP | news | PowerRating | PR Charts ), Cascade Bancorp (CACB | news | PowerRating | PR Charts ), Diodes (DIOD | news | PowerRating | PR Charts ) and a
lot of others. Please note that we do maintain positions in many of these names.
We think this rally is building momentum, but are cautious to watch the action
each day. If the market and leading stocks start to show signs of distribution,
it will be time to move back into safer harbors. Right now the market is worth
paying attention to and as a leading indicator of our economy, it may be saying
that we are growing moderately in a low-rate environment. Fed fund futures are
currently pricing in a 41% chance of a rate-cut by January 31st, (that’s
right…”Rate-cut”!)
Happy trading...
