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.
Tuesday flashed a little more distribution in the market.
NYSE-related indexes appeared to stave off any real selling and actually display
support. The NASDAQ and smaller-cap names did close off their lows, but clearly
posted distribution.
The distribution count is still less than required to avoid stocks and start
pushing money to the sidelines. In fact, distribution in the indices is almost a
good thing because stocks large and small were marching higher without looking
back. Apple (AAPL | news | PowerRating | PR Charts ), Google (GOOG | news | PowerRating | PR Charts ), Cisco (CSCO | news | PowerRating | PR Charts ),
Merrill Lynch (MER | news | PowerRating | PR Charts ), Morgan Stanley (MS | news | PowerRating | PR Charts ), Copa Holdings
(CPA | news | PowerRating | PR Charts ), First Marblehead (FMD | news | PowerRating | PR Charts ), New York Stock Exchange (NYX | news | PowerRating | PR Charts ),
U.S. Global Investors (GROW | news | PowerRating | PR Charts ), Ezcorp (EZPW | news | PowerRating | PR Charts ) and many
other strong growth stocks began advancing in late-summer and have really not
paused a whole lot or offered new buying opportunities. This selling, unless it
becomes more serious, may actually be very bullish as we move into 2007.
Chart courtesy of
StockCharts.com
Oh yeah, we had that little meeting today from the Fed. They left rates
unchanged as they were expected to do, but the bigger news seems to come out of
the stance they take moving forward. Interest rate futures’ trading has put a
rate cut by March, 2007 at between a 50 and 70% chance depending on the day you
check the numbers. By numbers, I am referring to the varying economic numbers we
see come out on various days. There seems to be a large balancing act going on
between slowing the economy down in a controlled manner (soft-landing) and
having it come to a screeching halt (hard landing).
Chart courtesy of
StockCharts.com
Through this column, my trading service and clients that I advise; the most
important thing we can do is follow the stock market’s price and volume action
coupled with the action of leading growth stocks. Historically, stocks have been
a leading economic indicator and with the current market’s rally underway I
would not discount that at all.
We will keep tabs on any real change in the market’s landscape as well as try
and point out any quality stocks taking advantage of the current distribution to
set-up and offer sound entry points.
