The buying frenzy continued in full force today pushing the indices to new 52-week highs on the best volume we’ve had in two weeks. The market is very extended right now, and I think it’s due for a pullback. I saw a stat around lunch time today that new highs vs new lows was 437-4 (NYSE) and 230-4 (Nasdaq). Those numbers are very impressive and probably more than a bit frothy. I’ll be on the lookout for some event which may bring out sellers in force. A gap opening which takes us to the nearby 2002 highs may do the trick. I’d like to see the indices pull back at least to their middle Bollinger Bands. In the meantime I’m still in daytrading mode because I see very few stocks which I would want to hold.
Another interesting indicator: CMF (chaikin money flow) … I remember back in late November seeing the CMF on the Dow going on a pretty serious downward trajectory and I said to myself, “I bet this means it’s about to bounce back up again.”
here’s the link: http://stockcharts.com/gallery?$INDU
It wasn’t one that I watched that much but it did seem to indicate when the rally was about to take off.