Wednesday, April 21, 2010

Morning Briefing for April 21st: Watching the Range Trade

8:58 AM CT - Note the relative strength among bank and homebuilder shares, but only a little more than 500 advancing stocks than decliners so far. Health care and materials shares relatively weak; watching closely to see if this is simply sector reallocation or if the rally in banks can lift the broad market.

We're trading toward the top of a broad multiday range; handicapping whether we can attract fresh buying at the highs vs. fall back into the range will set up the best trades for today. I'll be watching the intraday advance-decline line and new 20-day highs/lows carefully during the day for clues as to the likelihood of sustaining a breakout: with a little over 1300 new 20-day highs on Tuesday, we're seeing some thinning of participation on this most recent leg up in stocks. Note also that we're falling short of recent highs overseas, in EEM and EFA.