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Stockhaven’s market take 12/11/12

Technology resumed a leadership role as the NASDAQ climbed back above the psychologically important 3,000 threshold. The move came as SPY broke cleanly above $143, something I said I was looking for last night in order to ignite the bulls. This move was fueled by an unwind in volatility more than anything else. Remember…

“There’s risk and reward on both sides of the volatility trade though, as we can see a nice rally if the VIX moves back towards 15″
Stockhaven’s market take 12/10/12 

Don’t complicate things, with no bad rumors on the fiscal cliff, the VIX move closer to 15 and the markets rallied as a result, it’s as simple as that.trans Stockhavens market take 12/11/12

There was a good amount of action today:

  • CRM breaks loose — The cloud computing giant closed at an all time high
  • HD doesn’t participate — This has been a leading stock (often being associated with the housing recovery), but it didn’t rally today
  • SPX breaks 1,420 — The index notched its highest daily close since the election

Most people will point to AAPL’s relief rally as the reason for the strength in the NASDAQ but to me it was all about CRM. CRM closed at a fresh all time high and closed near its high for the day. Volume was terrific as today marked its second highest volume up day since August. There looks to be more upset in CRM and it appears as the stock could be taking on a leadership role for the broader technology space.

If the NASDAQ is going to continue higher without AAPL, it will need stocks like CRM to keep on making all time highs. Watch for holds above $162.50-$163 or a breakout past today’s high to target a move into the $170′s. Intermediate term CRM seems destined for $200 as long as it avoids going back below $155-$160.

Home depot (HD), a foster child like stock for the housing recovery and clear bull market leader of the last 4 months has suffered poor price action recently. HD is down 2.7% the last two days, and gave up all of its pre market gap gains to close near its low of the day.

If HD would have been able to rally the last two days, SPX would have closed above 1,430 today. As such though, I’m treating the recent price action in HD as a red flag of sorts going into 2013. Sideways action between $60-$64 is likely in store, with below/above one of those levels being a catalyst for broader market downside/upside.

Between the good and the bad of individual stocks right now there appears to be more good than bad. If there wasn’t we wouldn’t have seen SPX break above 1,420 today. Bears will be quick to point out though that the market is essentially at the same place it was at 1 month ago: 1,428. However, with 5 days in a row of ‘higher lows’ the bulls have the edge and deserve it until we see a ‘lower low’ produced.

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