Tuesday, November 4, 2008

Market Overbought Short-Term, I am Still Looking for a Pullback

Just a few shorts to look at tonight. After going through my scans, I didn't see many new long candidates and as I said earlier, some of the ones I have been watching were volatile today. If volume comes into this market then maybe I will get long, but more than likely, I am just going to sit out and wait for the pullback that I still think is likely. My main Market Map scan has made quite a comeback and has almost turned bullish, which is one reason that I am not discounting a year-end rally. I just am not going to chase things at this point with the market overbought in the short-term.

Here are the indices first where you can see the lack of volume on this latest move. If we do pullback, I want to see the 985 area on the S&P and 1740 on the Nasdaq now turn into support. If that happens, it would be quite bullish.

S&P 500, Nasdaq

Here are some of the shorts I will be watching. Many are in the commodity sector, and I will be watching both SMN and DUG as well - both are near possible support levels on their charts.

All Charts from Telechart2007, Courtesy of Worden Brothers, Inc.

Tomorrow will likely be interesting due to the election. It certainly seems like the market has set itself up for a "sell the news" situation unless a miracle happens tonight and McCain wins this thing. At least that is my hunch. Who knows - maybe this market continues to surprise and moves even higher tomorrow - probably on lower volume if it does. You never know how the market is going to react these days to the actual news when it does occur. Good luck Wednesday.


hs1935 said...

"My main Market Map scan has made quite a comeback".

Can you share with us what this market map scan is?

Mac said...

It's the ratio of stocks up 25% in the last 65 days vs stocks down 25% in last 65 days. I got it off of Pradeep Bonde at Stockbee. I use a few different scans than he does, but the main ones are the same, so he gets all the credit for the indicator.