Santa’s Rally Still Intact: Stocks Continue Moving Higher

Ole Cris Cringle continues to bring investors a stock market rally heading into the Holiday week.

Friday’s action was tempered by options expiry, volume soared above its 50dma a sign of volume being a story of options and not buying.  Regardless, stocks were sold after reaching their highs by mid-morning and finished just off the lows of the day.  The action is not terribly good but the majority of indexes were able to hold off negative territory.  Aided by a decline in Chevron (CVX) and Exxon Mobil (XOM), the Dow Jones Industrial Average (^DJI) notched its 3rd distribution day since the 12/2 follow-through day.  Do not underestimate the power of a crowd who is beginning to get super bullish, they can push markets far beyond than you might expect.

Coming into the first 100 days of an Obama administration, there will be much excitement for what he might bring to the table.  Be wary, stimulus packages only work for so long and the only way they become sustainable is if manufacturing of new and innovative products are made in the USA!

The lack of strong leadership in this market is quite a bad sign for us moving forward.  All markets need leadership to reign in a new bull market and without leadership markets will wilt and fail.

New highs are beginning to creap into the picture but continue to lag new lows.  A favorable NH vs NL ratio will show strength and a market which has sustainability!

Despite the lack of huge volume accumulation in the market here are a few names that I do like.  Again, this is not a go out and buy this list…it is prudent you do your own research first and determine if the market suits your needs to go long/short any stock I post here.  Getting this out of the way, you will see a distinct theme here in industry groups.

• MYGN
• MAXY
• OPTR
• SXCI
• CPSI
• QSII
• ERII
• AWK
• CWT
• STRL
• ACM

Once again, do your due diligence.  These companies all are tops in their industries and industries I believe will be the leaders this coming year:  2009.  This market will certainly dictate whether or not I will use my entire portfolio with these names but certainly there is an opportunity to get long these names.

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