Sector Investing

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It certainly was a constructive day. Higher volume on the turn to positive after taking out some of the lows from November. It was not a 90% upside day so I cannot say the market will not run into further trouble down the road.

Still we could continue to rally for quite some time from here if buyers continue to step in.

Why?

Because the recent sell off came on lower volume than the selling leading into the November bottom.



Now we need the market to continue to advance on higher volume than it declined over the last month for any double bottoms to be meaningful.



If it does then we have numerous positive divergences set in place. If it does not then today was simply another batch of bullish enthusiasm and short covering that will only lead to a test of the 2002 lows.

Finally it is true we had very few new highs yesterday but that is not something new. We have had a several days with zero new highs on the NASDAQ in the last couple of months.



It's hitting a new trading low today with a lower number of new lows than last November that is much more important. It shows that there is some hidden strength in the market outside of my own portfolio <VBG>: