Failed Rally Attempt

Yesterday's lows ended a rally attempt started on 3/10, but the market does appear to be turning around. Volume on up days has been higher than down days within the past month, a sign that the bulls are starting to wake up. Still, the market has yet to prove itself before it is safe to buy.

IBD's 3/6 "Correction" call was right on

The heat map from the day before the 3/6 correction thru yesterday shows a lot of damage to the IBD 100. Also troubling is a lack of leadership to drive the markets back up. On the upside, today should end up being day 1 of an attempted rally - not a signal that the markets are turning up.

Shorting ETF's breaking out

 

As the major indices break down below Jan 23rd levels, their shorting counterparts are nearing buy points, with the QID is breaking out today. The SKF, has also been busting out on strong volume and looks to punch through its 147.03 buy point.

Like history, markets repeats itself

IBD has been noting the similarities between today's market movement and the 1920's - 1930's. Bill O'Neil also mentioned this on 2/12 on the Tom O'Brien radio show. It's a common practice IBD, O'Neil, and his portfolio managers to look for tandem charts. As an example, O'Neil saw the potential in Crocs by looking at the past winners LA Gear and Rebok. It should be interesting to see is Visa will tandem itself with Mastercard

Market In Correction

Less than 3 weeks into the current rally, IBD called the correction in today's paper. This comes to no surprise as 90% of rallies will fail when a distribution day comes hits 1-3 days after a follow through. Surprising is IBD's call after only 2 distribution days, when it usually takes 6-7.

Oil Stock Setups

4 IBD 100 oil stocks (3 from the Oil/Gas Exploration group) are setting up nicely, but with the rally under pressure, and the markets wild volatility, buy with caution.

The Smart Money - Top Mutual Fund Picks for Q1

From Wednesday 3/5's IBD. This is the quarterly listing of new buys from the top 15% performing mutual funds (over the past 6 months). There are my notables:

AUY SWN RIG BVN BBD WFR HES APA ITU ECA CNQ ABX XTO SU

Rally Under Pressure

IBD changed the market status to "Rally Under Pressure" after Friday's distribution day. It usually takes 4-6 distribution days to see pressure, but this rally is doomed to fail. One day after this rally started on 2/15, the indices marked its first distribution day - a bad sign!