Market Takes a Breather, But Remains in Uptrend

by Darrin Donnelly on July 13, 2011

The market was due for a breather after its incredible three-week run that began in mid-June.  On Monday and Tuesday, the market took that breather and recorded two consecutive Distribution Days as it declined on increasing volume both days.

Wednesday’s bounce-back attempt started off strong, but turned weak as the session went on.  Despite finishing 0.5% higher, the NASDAQ closed in the lower half of its intraday range.

(Click on chart below to enlarge.)

There are two major opinions about the market right now.  The bearish argument is that all the economic and political turmoil making headlines each day is just too great for this market to overcome.  The bullish argument is that the market’s resilience in the face of such fear and worry shows just how optimistic major investors remain about the economy.

Of course, opinions are worthless.  All that matters is what the market is ACTUALLY doing right now.  And right now, we remain in an Uptrend.

While the double-shot of Distribution Days we experienced this week is not good news (and it’s definitely something we want to keep a close eye on), two days of pulling back is not a cause for panic.

Until we see evidence that the trend has shifted, we will continue to buy top-rated Darvas stocks that properly break out of sound bases.

What we will NOT do is chase any stock that doesn’t fit our technical and fundamental criteria for qualifying as the “best of the best.”

Currently, we’re seeing a very focused list of leading Darvas stocks and it’s imperative to concentrate solely on this exclusive list.

* You can access this list of leading Darvas stocks – with EXACT buy and sell points – by clicking here and downloading Darvas Trader PRO.


{ 2 comments… read them below or add one }

The Simple Trader July 14, 2011 at 3:05 pm

Nice post and chart. The economic news is exceptionally bad, especially here in Europe. But like you I rely on technicals and current price action much more than news. I do wonder what the finance ministers in Europe will be doing over the summer to get a grip on the indebtedness of European states. Greece will default on some of its debt which will have implications for Ireland and Portugal as well as for the investors and banks who hold this debt. Certainly in for some interesting times. Keep up the good work 🙂


Darrin Donnelly July 14, 2011 at 3:23 pm

Thak you for your kind words!

And thanks for your thoughtful comments on this market. All the headlines certainly point to an impending Downtrend, but until the technical action confirms it, I’ll just keep following the current trend.


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