Sunday, February 12, 2006

Any Follow Through for Monday?

The stock market has very little news to work with this week including no significant earnings reports.  With that in mind, some caution might be indicated as we head into the new week.  Friday’s action was somewhat stronger than I anticipated but the major indexes failed to better their highs created on Thursday, the day before.

Without further upside being generated from this point, there may be a good chance for the bears to come back to Wall Street.  If we do see a push above the highs on Thursday, then we could see a bit more rally.  Remember the Dow is the strongest index of the majors that we follow.  This is the type of action that you want to see as a bear, that the Dow goes up by itself.  That is a good indication that the captains are moving but the infantry is lagging behind.  You can’t win a war like that and you can’t expect the market to follow through on the upside without the infantry.

If we see some upside in the Dow, we are hoping to see the rest of the market not participate.  If we don’t see some upside from the Dow on Monday, typically the strongest day of the week, then we may have exhausted the rally efforts.  Tonight’s markets are not showing any strength especially Japan which is down 300 points as we write this.  Our futures are not showing any life either but it is just overnight trading which is fairly meaningless anyway.  We need to see what happens when the market opens in the morning.  

Be careful out there.

Dow Industrials:  10,919.05  +35.70
RYVNX:  19.01
RYAIX:  22.18
TLT:  90.30
BEGBX:  13.04

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