Marke starts a tradable rally ...?

One thing I have learned in trading over the years is that you should always be ready for change in your market stance ... Over confidence or less of confidence in stock market is a killer for performance.

The market action over the last couple of days illustrates the importance of staying flexible in market views. Last Thursday, market reversed the Wednesday loss and gapped higher and Friday's follow through on bigger vol to the upside puts the market in a potential tradable rally. Nasdaq's vol on last Friday is the first over the last three weeks going above 50MA, indicating big boyz are stepping up to the plate. Well, there is no sure thing in stock markets, things definitely have brightened up a little for good.

There is no shortage of leadership breakout. The breakouts have been holding up, pointing to further price apreciation if the market can continue to ramp higher. The two top leading groups are cloud computing related represented by CRM, VMW, RVBD, NTAP; the other group is the fabless semiconductors represented by CRUS, ARMH, ALTR etc. Other breakout includes FFIV, ISLN, VIT, ROVI, ARUN etc.

Friday's big reversal on several big stocks should alert you to stay away from overlly bearish on the market. AMZN gapped down at the open more than 10% but closed near unchanged. The seemingly broken down former leading stocks ISRG, CMG all rampped higher after earning release.

Economic sensitive sectors seem to be on the mend. Commodity stocks seem to find a bottom (at least in the short term bases). Construction and machinery stocks look to be basing nicely. These are all supportive to the health of the market rally.

I am willing to take a bet ... I am going to buy the following stocks on Monday. My capital commitment will be 30%

Fabless semi: CAVM, SWKS, LSCC
Retail: CMG
Cloud Computing: CRM

History paints a bleak picture

A very nice article comparing the current market to the past 3 bear markets,

History paints a bleak picture