Nov 15 2009

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HPQ: Has been a very strong stock and is almost back to its 2008 highs and should soon surpass its 07 highs whereas many other members of its Dow 30 fraternity have not come close. It is way ahead of the pace and makes it one of the stronger large cap stocks going currently. This could also make it more vulnerable to a correction if the market gets hit at some point as significant gains have been added to it since the March and July lows.

MCD: This stock has almost recaptured its 2008 highs also. It has been performing particularly well recently perhaps due to the dollar which has fallen. Whatever the fundamental reasons we can certainly appreciate the technical characteristics which help prove the strength in this issue over the last several months.

IBM: Has been a good stock since the March and July lows. Iike HPQ is only a stones throw from its 2008 highs and is far ahead of its other component stocks in its quest to regain its highs of that time frame. Like any other stock that has run that far ahead of the pack it could be vulnearable to a hit as it did when it reported numbers recently. WIth this stock almost at its 08 highs it might be considered 40% overbought if you compare the Index at the time compared to now. Or you might consider it fully valued and anticipate it to lead the market higher going forward, given a rising market. Either way market perception is this is a strong stock leading the way in the Dow 30.

AA,BA, BAC,GE,MRK,T: These are all stocks that are far below their 07 or 08 highs by a wider margin than the index is in other words they are lagging the index considerably. Will they play "Ketchup" who knows but as money rotates some will certainly get back in the momentum if the market continues to accelerate. As often the case though the weak continue to be weak in the face of lackluster buying. The technicals are improving some as the market marches forward but perhaps just like a rising tide lifts all boats.