Know thy portfolio

The NASDAQ closed down 0.2%, the Dow was down 0.5%, the Russell 2000 was down 0.3%, and the SOX was flat. Breadth was slightly negative and volume was light, about equivalent to yesterday.

We are a little disappointed in the weak action between 3 and 4pm. We were hoping for a little more oomph into the close and for the NASDAQ to hold above 2140. However, we will not fret too much due to the fact that there was stealthy strength under the covers in NASDAQ land. In addition, we are happy to see the NASDAQ outperforming the Dow.

Despite the averages being slightly down today, your friendly neighborhood Kcap team had solid positive performance. Many of our names were cranking, which is an important indicator to us. There are times when traders can make money by simply calling the market direction. However, it is often important to identify the sectors and securities catching bids regardless of market conditions. When you can find a significant number of securities that buck the overall indexes, you are presented with an excellent opportunity to take the pulse of the market.

Is the underlying strength coming from defensive groups, i.e. Gold, Foods, and Pharmaceuticals or from traditional leadership companies, i.e. Technology? Furthermore, do you see strength in Large Caps or Small Caps? How much volume is it taking to move stocks that are leading?

Take the time to analyze these internals to truly understand the larger picture. Not only is this mandatory for portfolio managers, but is required reading for all serious stock market players. Our self-study today kept us from stopping out of the stock market.

If You Held A Taser To Our Head: Tomorrow is a new summer day and we will look at it through fresh eyes as if it were the only trading day that ever existed.

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