U.S. Stocks posted solid gains on the first trading day of 2012 after being called to open sharply higher due to some stronger than expected economic data out of Europe. However, stocks were unable to build on their games for the rest of the day, and the averages essentially closed about where they were trading in the first few minutes of trading, and off their highs.
Strength was seen mostly in the energies and precious metals. One thing I've noticed is that there is a lack of leadership in stocks making new highs. I perform a stock screen of the days biggest movers, and there were just a handful of today's big movers (gains of over 3.5%) that were making new 52 week highs. Instead, the biggest movers were in stocks that have been beaten down. This is not characteristic of a market that is a bull market. Instead, this is simply professional trading as funds rotate from one sector to another, hoping to catch a pop, then exit. This is not the sign of confidence in a market and economy.
With that in mind, it is a good idea to remain cautious.
www.whentobuyandsellstocks.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment