Tuesday, January 13, 2009

State of the Market - 1/13/09

A very choppy day today on Wall Street as stocks started higher, swooned starting around lunchtime, and then bounced into the close. Volume was mixed - slightly higher on the Nasdaq and slightly lower on the S&P 500. All in all, a very mixed day in which nothing much was accomplished from where I sit.

Technically, we pretty much are at the same spot we were yesterday - still oversold in the short-term but as long as we are below the 50 day moving averages, the intermediate-term outlook still looks bearish to me. I still expect those moving averages to act as heavy resistance if we bounce up that high.

I once again did nothing today as the 850 area on the S&P was never approached and I did not plan on taking any positions on the long side unless that area was tested. If we get that low over the next day or so, I may still look to go long for a quick bounce. If we bounce soon however (say tomorrow), I would be looking to get short again like I said yesterday. Either way, I will be away from my computer tomorrow for meetings, so I probably won't be making any trades tomorrow either.

All in all, I don't think I am missing a whole lot right now by sitting out this market. From where I sit, there just doesn't seem to be a lot of movement right now, and when that happens, forcing trades is just about the worst thing you can do. One of my resolutions for this new year was to not overtrade and I am trying my best to stick by it. Right now, I just don't see a big edge for either side of the market and until I do, or until things start moving again, I'll probably continue to just be as patient as I can. Earnings season is going to make things difficult as well so be careful. Good luck Wednesday.

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