Monday, April 27, 2009

State of the Market - 4/27/09

Another somewhat choppy day today on Wall Street, as the markets gapped lower to start the day due to the swine flu news and immediately bounced from there to turn positive by midday. However, the rally quickly turned at lunchtime, as stocks fell for the next two hours just as sharply as they rose for the first two hours of the session. They hit a bottom around 2:00, tried to bounce, but couldn't and fell back down. The lows held however and they bounced back a bit into the close, finishing with small losses but in the middle of their intraday range. Volume appears to be lower.

Technically, the story remains pretty much the same. The S&P still hasn't confirmed the Nasdaq breakout from Friday and remains locked in a range between 830 and 875. Meanwhile, the Nasdaq got no follow-through from its break above 1683 so that could be bearish, but it did hold that area OK. We're still overbought on most time frames and I still believe we are due for a serious pullback some point soon. If you want a more detailed reasoning for this belief, check out last night's post.

Looking at individual charts, I really don't see too many that interest me on either side so I will likely continue to sit things out, at least until I see some really nice setups that I just can't pass on. I still just don't feel comfortable playing this market here and with the chop we've seen the past few days, that may be a good thing anyway. I know I didn't miss anything today. Perhaps the market is just consolidating here and readying itself for another move higher. With seasonality soon coming into play as well as other factors, I don't think that is the likely outcome, but as I have been recently, I could certainly be wrong. Good luck tomorrow.


Anonymous said...

Q's made it up to the election high and then turned lower. Just something to notice.

swingtrader said...

Not a big surprise - the NDX is approaching its 200SMA at 1396 and a 38% retracement of the Aug-Nov decline. The bears are still having trouble, but this is a good area of cross-current resistance that may prove tough to break without some kind of test back or consolidation. a DIP TO 1286-1311 area would be the test for the double bottom on the weekly chart.

I am actually more surprised the bears couldn't knock the market down further today. Just sayin'.