Plug for Investor's Business Daily

Despite the various opinions about this daily paper, I believe it provides some insight into the current state of the market. For years William O'Neal has kept investor on the right side of the market and up to date on what has been making it tick on a yesterday basis. The information is late for those who need real time (the print version comes in the mail, the day after all the action). IBD also provides its top 100 Stocks each Monday that provide some interesting ideas and opportunities for the "Big Boys" to pick on the dumb money. Any idea has to be taken with a grain of salt and must fit into your own trading/investing strategy. Here is a reprint of this morning's Big Picture.

THE BIG PICTURE Stocks Rebound, But In Weaker Trade BY JONAH KERI INVESTOR'S BUSINESS DAILY The Nasdaq snapped a four-day losing streak Tuesday, but lighter volume pointed to a lack of conviction among big-money investors. The technology-rich Nasdaq composite gapped up at the opening bell. It faded a bit around midday. But instead of swooning, the Nasdaq rallied the rest of the afternoon to score a 3.5% surge. NYSE stocks followed suit. The NYSE composite jumped 3%. The S&P 500 picked up 2.9%. The Dow industrials bounced 2.5%. But volume sank 5% across the board. When viewed in context, Tuesday’s trading levels look even more anemic. Monday was Veterans Day, a bank and bond market holiday that typically suppresses volume levels on Wall Street. Tuesday’s sizable price gains might also lead you to expect a jump in trading volume. But as the past few weeks have made clear, this isn’t a healthy market. For the past several days, the major indexes have notched a series of big down days in well aboveaverage volume, often higher than the day before. Institutional investors — the mutual funds, banks, pension funds and other big boys who controlabout three-quarters of the market’s movement — have done a lot more selling than buying lately. One key sign of trouble is the manner in which leading stocks have tumbled lately. When a top stock runs up for a long time and holds well above its moving averages, then suddenly knifes down through those levels, that’s a bad sign for the stock and ultimately the market. Apple’s recent action is a prime example. The iPod and iPhone maker was one of 2007’s top performers. But last week the stock topped and started falling hard. In just four days, Apple went from red-hot leader to slicing through its 50-day moving average. By way of comparison, it took 10 days — more than twice as long —for Apple to undercut that level during the market’s brief correction in July and August. Chinese search engine giant Baidu.com and other top-rated stocks have shown similarly harsh, rapid declines. The broad indexes also have shown more violent, faster price drops than seen earlier this year. As for Tuesday’s price gains, it’s far too soon to tell if they could lead to something bigger. Don’t put too much stock into one up day — even one as big as Tuesday — especially when it follows a run of nasty sell-offs. We’ll need to see a lot more strength to lift the major indexes off the canvas. Leading stocks will also need to show some strong gains in healthy volume. A big drop in oil prices helped stoke Tuesday’s rally. December crude dropped $3.45 to settle at $91.17 a barrel on the New York Mercantile Exchange. Oil prices skidded after the International Energy Agency cut its monthly forecast for crude demand. A better-than-expected earnings report from Wal-Mart and bounce-backs from beaten-down financials also fueled Tuesday’s rebound.