New Year Starts With a Big Move Up

DJIA + 258.30, +2.94% SP500 + 28.55, +3.16% NASDAQ Comp. + 55.18, +3.50% Russell 2000 + 6.39, +1.28% Exchange NYSE NASD Advancing 3,073 2,094 Declining 707 754 Oil $46.34 +$1.74 Gold $878.80 -$4.80 SOX 221.74 +9.74 VIX 39.19 -0.81 The VIX moved down confirming the rise in the SPX on Wednesday; however the VIX rose from its low of the day going into the close. Strongest Sectors: XLY +5.01%...XLE +4.98%...XLK +3.76% Weakest Sectors: XLF +1.12%...XLP +1.42%...XLV +2.03% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK, XLF Down Trending: The first day of the new year was up. Some have been quoting research that since 1972 over 90% of the time when the first trading day of January is an up day the year is an up year. What that statistic doesn't reveal is what is the range of returns for those up years, do those up years experience any draw downs or how much does an up year pull back from its peak, along with a host of other statistical measurements that any good quant (quantitative analyst) would want to know. Don't misunderstand...we posted on October 10 the question..."does this finally mark the beginning of the end of the down trend? So far the technical evidence has been indicating this to be the case. While there likely were others, we're not aware of anyone else who on that early date was able to discern the technicals pointing to a potential bottom and change of trend. Whether the trend is up, sideways or down in 2009 a trader has the potential to make money when they focus on the actual technicals of trend, support and resistance and momentum, while following a proven strategy consistently; buying when they are supposed to buy and selling when they are supposed to sell, using sound risk management techniques and continually exercising discipline. We recently read one trader's opinion that he didn't believe the bear market was over and gave a list of isolated factors to support his opinion. Everyone is entitled to their opinion and certainly in the investment industry there is no end to opinions, many of which are free. We are always dismayed when skilled technicans, mediocre technicians, pretended technicians and those who don't even pretend to have technical proficiency state their opinion about the future as if they know the future. Many traders fall into the trap of believing opinions supported by a list of technical factors because of the list. We are espeically humored by predictions of the future that use the word "probability" as nothing more than a code word for their opinion. This is easily detected when they predict a future occurence weeks or months away as a high probability but offer no valid sample size for their opinion, generally accepted technical patterns or they predict a technical pattern that hasn't even formed yet. Also if you find the phrases "I think, we think, etc." in the place of valid technical observations these can also tip you off to it being a guess rather than a valid technical forecast. We share these observations because many people like to take short cuts in their trading and rely on pubicly available opinions or guesses and then wonder why their trading doesn't deliver the positive results they had desired. The beginning of the New Year is a time when many can get side tracked by all the guesses and opinions. Dave's Insight: Don't waste your time with people's opinions. Nobody has a crystal ball even if they are on tv, have a website or write an email. Trade trend, support and resistance and momentum. When people's opinions fail and they eventually do, one can still make money when they trade the markets and not people's thoughts about the market.

An observation about our Stocks to Watch list which we have been posting on during the past few weeks. This list has 120 stocks with good growth fundamentals. During the past 6 trading days, 41 of these stocks have risen above their 30 DMA. A few weeks ago just a few stocks were above their 30 DMA. As of Friday, only 18 of the 120 are below their 30 DMA. Continue to enjoy the list and watch for trading signals as they appear on the charts.

Stocks to Watch on Monday Leading Stocks: Holding Above 30 DMA AYE…PCLN…BAP…DLTR…FLR…JCOM…JEC…PCR…ATK…B…IRIS…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…CERN…FWLT…MTW…QSII…VMI…OI…FLS…BCO…NDAQ…ROST…VIVO…AET…UTX…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…MYGN…NOV…ACL…BLUD…DNA…HLF…OSIP…AGN…KEX…LAYN…RCI…CELG…NEU…PSYS…RIO…SHW…AMED…PETS…SOHU…SPTN BCR…CAM…FLIR…NGS…NOV…SPN…WAB…CHTT…CTSH…FSTR…IIVI…K…MCRS…NIHD…PCP…SWN… AMX…CBST…HP…TECH…TEVA Moving Above 30 DMA = 13 ADBE…AME…ANSS…ATW…CHU…GME…ISRG…MBT…MMM…MON…NE…NILE…RIMM Moving Below 30 DMA = 2 AFAM…STRA Staying Below 30 DMA GIS…PTNR…AXYS…URBN…MTD…ICLR…LNN...AAPL…SINA…EZPW…PRGO…PPD…ESRX

Friday’s Action Moving Up: FSLR, MA, POT, CF, CLF, CNX, PCLN, MON, NIHD, GRMN, SCHN, MEE, GS, BTU, X, AGU, MOS, ANR, NUE, HANS, FWLT, NDAQ, ESRX, KMT, PNRA, LAMR, COH, SOHU, SINA, V, MS, UAUA, EBAY Moving Down: AFAM, STRA Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Up