Friday, February 23, 2007

Market Recap

The major indices were down slightly today but at times it felt like we were down much more if you were watching the brokers break low all day.

This week we saw the Dow sell off for a few days while the NASDAQ showed strength throughout most the week. If you look at the above chart in the lower panel, you will see a ratio line of the NASDAQ versus the Dow. As you can see the ratio line shot up this week indicating that we are seeing a rotation of money leaving dow stocks and moving into the NASDAQ. At least in the short term that is what I am observing. Whether or not it's going to continue is another story but I would go with the trend and follow the flow of money which means buy the dips. All of the major indices are making higher highs and higher lows. Until I see that pattern change, I'm going to continue looking for stocks to buy.

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