In the words of K.C. & The Sunshine Band, "that's the way, aha, aha, I like it, aha, aha." We bounced back nicely from a midday pullback, breadth was a very strong 3,900 gainers to 2,400 decliners and, most importantly, we had excellent leadership from technology stocks today.
The semiconductors went out near the highs of the day, and I had plenty of good-looking technology action on my screens despite the continued malaise in a few big boys like Apple (AAPL:Nasdaq) and Intel (INTC:Nasdaq).
I know I've been quite vocal recently about a rotation into technology, but we now have had two days in a row of stealth strength in techs. One of the big positives is that the major indices are not reflecting any unusual strength. They were pretty benign today overall but there was a lot of very strong action, and many stocks I've been accumulating took off nicely.
Stealth rotation into technology is particularly bullish because it sneaks up on people. Suddenly they realize they are missing out and then rush to participate. There still seems to be a lot of skittishness out there, and I'm not seeing the sort of wildly positive sentiment I associate with a frothy market. In fact, given the tone of my email and the posts in this blog, it seems that we are still at the early stages of a move that many have yet to be convinced is for real.
Don't forget we have the Federal Reserve interest rate decision next week, and that is going to occupy the thoughts of many. Frankly, I can't imagine we are going to get anything surprising from Ben and his boys. They have made it very clear that they are staying hawkish and are considering incremental economic data. I see no reason for them to change their posture next week.
If the Fed doesn't do something surprising, we are set up very nicely for continued outperformance in technology stocks. I'll be doing some digging this weekend for new buys and expect to be very busy next week. I hope you had a good week. Do something fun this weekend. I'll see you on Monday.
Rev Shark Blog Stocks Heating Up Into the Close 3/24/2006 3:05 PM EST Semis are at day highs, small caps are strong and there are signs of life in technology.
Rev Shark Blog Tentative Action Has Bullish Tint 3/24/2006 12:06 PM EST If we get some momentum, there will be people scrambling to get in.
James "Rev Shark" De Porre is a self-taught trader who primarily trades for his own account from his home on Anna Maria Island, Fla. He is a member of the Michigan Bar Association and a former tax attorney and CPA. De Porre holds business and law degrees from the University of Michigan. He was formerly the host of America Online's The Shark Attack and presently operates SuperTraders.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here to send him an email.
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