Monday, January 5, 2009

A Few Random Thoughts After Doing My Scans

Just got the oldest son into bed for the night so no video for tonight, but I will share some thoughts about where we are at and what tomorrow may hold.
  • Although we were down for the day, there were a lot more 4% breakouts (701) than 4% breakdowns(260). That is a good sign for bulls and shows that the selling wasn't strong today at all.
  • Overbought conditions still remain, and are still quite extreme. The McClellan Oscillator closed at 306.29 today (slightly lower than yesterday but still historically high) and the T2108 from Telechart closed at 85.41, which is the highest reading I have seen, although the chart only goes back four or so years. Most of the numbers from my scans also confirm the overbought conditions.
  • A few stocks acted very well today (CSKI comes to mind) but my long watchlist got smaller tonight because the few stocks I was watching on the long side are now too extended.
  • Gold, reits, and financials looked weak to me today based on individual charts and the last two look particularly vulnerable to me and looked poised to breakdown soon. Volume was higher on a lot of these today as well.
  • My short-term bearish outlook has not changed and I will continue to look only to that side of the market unless we can rest calmly and these overbought indicators can settle down a bit. I just can't comfortably buy things here - too risky for my tastes.
Long Watchlist: AIPC, LZR, OESX, VISN, GIGM, MAXY, TSL, CSIQ, PDO

Inverse ETFs I am Looking at: SRS, DUG(very oversold), SKF, FAZ, ERY

Short Watchlist: SVR, HNI, DF, KIM, WIBC, FSYS, SLG, CB, UAUA, JPM, MAA, CYN, RMG, STI, MW, BOH, WTW, NTES, AMZN, MR, ICE, QLGC, RVBD, KSS, DLR, VNO, EFC, TSCO, WGOV, MASI

Some of these shorts already starting breaking down today on heavier volume and are a little riskier, but if you check them out, you will see how these patterns can work succesfully.

Good luck tomorrow! Take care.

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