Friday, August 1, 2008

State of the Market - 8/1/08

A new month brought more of the same to Wall Street today - choppy trading, few breakouts, and difficult conditions to make much money. Futures were slightly higher this morning when the jobs report didn't disappoint, but that slight optimism quickly faded and stocks sold off for the first half-hour of trading. They tried to bounce from there, but really just chopped around through the lunch hour with a slight upward bias. That chop continued through the afternoon as the market moved basically sideways. I am wrapping this up a bit early today, but I am assuming the market will close in the same manner. Volume appears to be lower.

Technically, we are in a trendless range. Not much else to say. Below 2250 on the Nasdaq would be bearish - above 2350 would be bullish, but there is other overhead resistance there to deal with that could make things difficult for any bulls.

To be honest, I am just very bored right now with this market. I didn't watch it at all today - I checked my watchlists once around lunch time and noticed that there were pretty much no stocks moving up on my long watchlist and no stocks moving down on my short watchlist. I set my stops early and just let them go.

I was stopped out of VISN at $23.85 for a 2.8% loss. The position wasn't big and I did feel like I was chasing a bit - I wished it would have rested more. That being said, I didn't like the way this stock acted at all today - after breaking above resistance at $24, I believe this stock should have been able to hold above that level. I said yesterday that I would watch this stock as a gauge for the entire market - I was one of the best charts I saw and acted well so far. Let's just say my hopes aren't that high for a nice rally after watching this one pullback so much today. A healthy market filled with potential does not have its best leading stocks put in performances like this today - absolutely not. The best looking chart in my scans has now turned into a very ugly one. I think it is being manipulated - by the looks of it, it fell over $2 in about a minute (I'm sure a bunch of stops were taken out) and then bounced right back up. I will likely take this stock off the watchlist after today.

VRUS acted pretty well and followed through today on yesterday's breakout above resistance. I'd like to think this could continue to hold up but I have my doubts about anything right now. Because of that, I took my profits at the end of today - sold out at $23.88 for a little over 7% gain. Not bad, but this also wasn't a big position. I may be getting out too early, but I am in the mindset of taking profits when you get them right now. I am back to 100% cash.

I am glad it's Friday because I can take a break from this chop for a few days. As I said yesterday, we will at some point get a market that is easier to trade, either up or down. Just keep looking for it and in the meantime try to find something else to do with your time. It's not worth focusing too much on this particular market. See you sometime this weekend.

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2 comments:

Gio said...

Hey Mac, thanks for stopping by over at iBC. I'm still keeping thehawaiitrader.com , i worked hard in creating it! So anyway, I'll just post weekly updates over at my blog, and most of my trades at iBC.

have a good weekend! I got some IBD charts to dig into.

-gio-

Mac said...

Sounds good Gio. Find some good ones - unfortunately I am not finding too many.