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Thursday, July 30, 2009

Up and down Thursday - Swing Signals, Trend Busters and Trend Leaders for July 30, 2009

The NASDAQ gapped up today but couldn't hold its intra-day highs. No gap on the S&P 500 but otherwise a similar performance. Stocks ran up early, gave ground late in the day but still finished with decent gains. This seemed about right as the morning rally seemed to me to be a bit overdone. Catalysts today included a Goldman Sachs upgrade for GE, a beat by Motorola and a decrease in the unemployment rate. Weekly initial claims climbed for the second week in a row but still managed to stay below 600,000. Decent news but not worth a 2% rally as we saw in the morning. Stocks still managed to finish up around 1% which is nothing to complain about.

The view from Alert HQ --

Our list of Trend Leaders has finally gotten above 1000. This is a good indication of the bullish sentiment that is prevelent but it gets us closer to the kind of extreme levels that presage a pullback.

As we saw on Tuesday, we have more SELL signals than BUY signals on our list of Swing Trading Signals. This kind of action has been seen before a pullback.

Our Trend Busters list is shrinking but, in contrast to our Swing Signals, shows more BUY signals than SELL signals

For the most part, our signals reflect a high level of bullishness. The weakness in our Swing Signals is no surprise as, prior to today, stocks had stopped their mad rush to new highs. So I'm pretty happy to see the bullish tone but I'm worried about how some of these signals are getting that look - the kind of look that suggests new highs will be harder to come by and stocks could be ready to turn down again.

Friday we get the advance look at GDP for for the second quarter. That could be a big market mover if it blows away expectations on the upside or disappoints big on the downside. Anything in between is liable to be a let down and we could see stocks give up today's gains.

Thursday's Signals --

Today we have the following:
  • 27 Swing Signals -- consisting of 10 BUY signals and 17 SELL Signals.
  • 1018 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. There are 242 new stocks that made today's list and 221 that fell off Tuesday's list.
  • 14 Trend Busters of which 12 are BUY signals and 2 are SELL signals
Using the signals --

As a humble practitioner of technical analysis, I admit that every signal can't be correct. Alert HQ can, however, provide a filtered selection of likely candidates from which investors can choose. Remember, if you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals may provide some good trading ideas.

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