New Highs

Posted by downtowntrader | 4/16/2007 09:12:00 PM | 0 comments »

Several markets made new yearly highs today and the S&P 500 actually closed at one. Also quite impressive was the fact the several of the market ETF's gapped and never backed and filled the gaps. Everything about the day was very bullish, except for the lack of volume. I would think volume would be higher on a day where several indices ran away from gaps and challenged multi year highs, especially after the recent correction. One has to wonder if how much of this move is related to the large amount of hedging and the upcoming options expiration. Regardless of the reason, stocks are moving higher, and have yet to give short term topping signals. Several of the stocks mentioned over the last week have moved very nicely, and despite my cautious stance I find myself almost fully invested right now, even after locking in some gains today. I'm taking it one day at a time here and will be liberal in taking profits here.

Here is a chart that looks higher to me over the next few days.

Apple Inc. (Public, NASDAQ:AAPL)
AAPL's chart has been a little choppy recently, but it is looking like it may bounce off the 50sma and lower bollinger band here.

eBay Inc. (Public, NASDAQ:EBAY)

Another chart I found interesting was EBAY's. While I have no plans on buying EBAY I thought it there was an interesting plot forming on it. EBAY reports earnings on Wednesday and it appears that it is possibly on the cusp of a large move. It is looking very bullish on the daily chart just clearing several month base. While volume was just average, there hasn't been any high volume breakdowns either.

Where things get interesting is on the longer term chart. Take a look at this weekly chart of Ebay spanning the last four years or so. Ebay is overbought and heading to stiff resistance. It could easily turn lower after testing the down trendline, but you could also classify this as an ABC correction which already completed. This would put Ebay in Wave 1 for the Elliot Wave followers. I'm not a wave counter by any stretch, however, I can easily see this as the beginnings of a much larger move higher. I am officially adding them to my stalking list, while waiting for a pullback and decent candle pattern to emerge.

Good Luck,