Market Notes & *Blue Plate Specials* Portfolio – 8/02/10

Market Notes
Green shoots continue to sprout both here and in Europe as the market reacts positively to increases in domestic ISM numbers and construction spending along¬†with positive bank earnings from Paris-based BNP Paribas (BNPQY) and London-based HSBC (HBC). Or, maybe everyone’s still aglow after spending the weekend surfing and sunning at the beach.¬† Just a thought.

Technically, there are two pieces of good news. The first is that all the major indices, including that tortoise in the race, the tech-heavy OEX, are now trading above their widely-watched 200 day moving averages (dma). Add to that rising investor confidence reflected in the VIX (volatility index), now at its lowest level since the beginning of May, and you get the recipe for a nice summer rally. But don’t expect it to go up in a straight line; today’s extremely low Trin (Arm’s Index, a measure of buying and selling pressure) typically indicates that a reversal is imminent, meaning that I wouldn’t be surprised if the market opens lower tomorrow (but it doesn’t mean that it will continue in that direction!).

Now that all of the averages have cleared resistance, the next major hurdles are the following:

SPX 1150
DTX 460
DJIA 10750
OEX 520
Nasdaq 2300
VIX 20

Should these levels be broken, technical analysis of the charts indicates moves to the following levels (which coincidentally turn out to be close to their previous highs):

SPX 1225
DTX 510
DJIA 11450
OEX 555
Nasdaq 2500

Today’s Portfolio Picks
Here are my 10 long stock picks chosen from today’s *Blue Plate Specials* menu. They are chosen from the following lists: Breaking out to new highs and Breaking out to new highs on lower volume.

Capture

For more info on how this portfolio is generated and how you can construct your own, see the fund rules in the 4/21/10 blog. And remember to do your own due diligence!

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