Archive of January 2010
Keep Your Eye on Buffalo Wild
Buffalo Wild Wings (BWLD) has been trading excellently lately, especially given the choppy trading action in the broader market over the past week. For nearly two and a half years the 45 level has acted as resistance, but Thursday's huge pop on good volume finally broke us out. Keep a stop at 39 but expect good things out of this one.
Recapping the Holiday Break
After a nice holiday break from the markets I was hoping to return and find that things had significantly changed. Unfortunately it doesn't look like much noteworthy happened. Stocks rose a bit, interest rates rose a bit, gold caught a decent bounce as expected, and the dollar sold off a bit. No biggies at all there.
What you do need to pay attention to however is what happened under the surface, specifically with sentiment and breadth. Bullish sentiment, as measured by AAII, reached extreme readings over the past few weeks and breadth finally was able to gain momentum to the upside again.
This combination bodes well for stocks and other risk assets in the short run, but suggests we'll likely see the top of this rally in the next few weeks. Sentiment is not the kind of thing you want to step in front of though, so if you'd like to play the contrary trade and take up a bet on the shortside you'd be wise to wait for confirmation first (a negative divergence in breadth, stocks hitting new 10 day lows, or a significant distribution day on heavy volume).