The General Market continues to make new highs as the leaders have taken the past two weeks off. All the indexes are advancing on lighter volume due to the Holiday trading. Overall volume should remain light this week as well.
The leading index, Nasdaq, is now less than 7% away from the 2007 highs. I would expect that to have some psychological effects as it approaches and the media begins to remind everyone that the "market is now back to where is was before the economic meltdown".
While extended and away from logical buy points, the leading stocks remain strong. Since the September 1st Follow Through Day (FTD), stocks like CMG, CRM, NFLX, AAPL, PCLN, RVBD, FFIV, and AMZN have seen great price progression. BIDU is the first leading stock to lose its 50 Day Moving Average in heavy volume. This is the first stock to initiate a classic sell rule. It is important to monitor all stocks, particularly the leaders, for any other sell rules that are broke.
The Nasdaq has 3 distribution days and normally when there is 5 or 6 on the tally it's important to watch margin as the rally is under attack.
