- Technical Market Commentary -

July 21, 2010 (FinancialWire) (By Dr. Joe Duarte) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — Both Apple Inc. (NASDAQ: AAPL) and Goldman Sachs (NYSE: GS) proved that they still have some pull with traders on Tuesday.

If you shorted the market at the open on Tuesday, and went to play golf, by the time you finished 18 holes at a leisurely pace, you might have lost a fair amount of money. That’s because Apple and Goldman turned around during the day and dragged the market higher. Apple continued its romp in the after hours session after a well received earnings report. Yet, away from these two story stocks, there is still a bit of a two-tiered market.

There is the New York Stock Exchange, where the advance decline line, the difference between advancing and declining stocks, plotted on a daily basis, has recovered nicely over the last few days. And then there is the same metric in the Nasdaq, where there is little recovery. That means that the advance in the Nasdaq remains narrow, while on the NYSE, there are more stocks participating in days where the market rallies.

That’s an important bit of information because there are more preferred stocks, exchange traded mutual funds, and other instruments that act like bonds on the New York Stock Exchange than on the Nasdaq, where the advance decline line is a much more pure measure of the activity in stocks.

Another way of looking at this is the action in the Russell 2000 Index (RUT) of small stocks. The chart of this index looks worse than the chart of the S&P 500 (SPX), which measures blue chip stocks.

The message is fairly clear. Large stocks are more attractive to traders these days than small stocks, or even growth stocks, such as the ones featured in the Nasdaq. More important, there is still a fair amount of daily volatility in this market, which makes any kind of long term thinking difficult.

Applying this information to a well-honed trading plan leaves you with one conclusion. If you’re going to trade, take small positions and look toward larger stocks for now. More important, be prepared for all kinds of volatility and the potential for disappointment, and yes, losses.

This is something that all investors should keep in mind.

(Go to http://www.financialwire.net/?s=joe+duarte to see more commentaries by Dr. Joe Duarte.)

(Go to http://www.financialwire.net/2010/04/22/about-duarte/ for more about Dr. Duarte.)

(Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.)

Real-time, streaming research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate (at http://investrend.stocksmart.com/ss/html/hpcompany.html). Current valuation analysis research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate (at http://www.valuengine.com/rep/searchsrep?pid=42&srchfor=).

FinancialWire(tm) is committed to serving the financial community through true journalism and providing relevant resources to investors. Standards-based, independent equity research on numerous public other companies is available through the Investrend Research Syndicate (http://www.investrend.com/reports) written by FIRST Research Consortium (http://www.investrend.com/FIRST) member-providers. Free annual reports and company filings for companies mentioned in the news are available through the Investrend Information Syndicate (at http://investrend.ar.wilink.com/?level=279). FinancialWire(tm), in cooperation with the Investrend Broadcast Syndicate, also provides complete, daily conference call and webcast schedules as a service to shareholders and investors via the FirstAlert(tm) Network’s “FirstAlert(tm) Daily” (at http://www.financialwire.net/news-alerts/).

FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation from subject entities, companies, equities, or representatives thereof, for its news, opinions or distributions. Further disclosure is posted at the FinancialWire(tm) website (at http://www.financialwire.net/disclosures.php and http://www.financialwire.net/2010/04/23/safe-harbor/). Additional resources for investors are also accessible via the FinancialWire(tm) website (at http://www.financialwire.net/2010/04/23/investor-resources/). Contact FinancialWire(tm) directly via inquiries@financialwire.net.

Copyright © MMX, FinancialWire(tm); All rights reserved.

[ssryrsyr] [cmmtry] [mrktqr] [mrktqrspcl] [drtjby] [djdrtreg] [exctrdfnd] [frscrrcnsp] [tchnlgy] [infrntntchnlgy] [cmptrtpmc] [dscrtnryrn] [bnkngnknb] [nvstmntbnkg] [wllstsllw] [idxsxdi]

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.