Securities Research Services

Sunday, November 30, 2008


Stocks are overbought here after 5 days in a row without a pullback. Traders are also probably well aware that volume shrank on the rise. This is absolutely a classic short set up. The question is, will it work?

Our scans are showing us quite a large number of stocks behaving well here. A big, high volume down day would probably eliminate this finding, but it is what it is at this moment. The market usually does what everyone thinks it won't do, so does that mean this time it's going to continue higher?

We wouldn't put a lot of money on this idea, but we wouldn't short without confirmation either. Taking a wait-and-see view here seems to be the most prudent course of action as we enter arguably the most bullish month of the year.

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