Stocks continue to trade lower today as the Dow Industrials edge back near their session lows at 10,047. As I write, only the smaller caps and the Russell 2000 Index (RUT.X) 505.42 -0.84% has broken below this morning's earlier lows and hints that bulls just aren't going to be aggressive and try to make any type of statement of strength. The Russell 2000 Index (RUT.X) has been the best performing broader average this year and its inability to find bullishness near-term hints that bulls are very uncertain about yesterday's rally.
Shares of defense contractor Northrop Grumman (NYSE:NOC) $123.12 +1.25% are trading higher, despite a trader's rumor that General Dynamics (NYSE:GD) $100.29 +1.33% has filed a protest to the General Accounting Office, asking that it block the award of $2.9 billion navy contract to Northrop (NOC), saying that the selection process was unfair. The General Accounting Office delayed the deal for 100 days while it reviews the charges.
Shares of Amazon.com (NASDAQ:AMZN) $18.05 +4.21% broke to a new 52-week high today. Traders site extensive short covering in the stock.
Amazon.com Chart - Daily Interval
There's always been a fascination among bears to short stocks in upward trends. If you get "lucky" and the stock collapses, you can make some cash. However, when a stock comes in favor like Amazon.com has in recent months and shorts build with little success, a move higher can be painful for the bears. With the stock breaking out to new highs, the point and figure bullish vertical count grows to $25.50, well above our retracement we put in place a couple of weeks ago.