Wednesday, June 10, 2009

State of the Market - 6/10/09

Another day, more choppy trading today on Wall Street, as stocks gapped up, fell drastically from there, but held support and bounced back into the close, finishing only with small losses. The morning selloff had the Nasdaq losing almost 50 points from its opening highs and the S&P lost almost 25 points off its opening highs. Stocks righted themselves right around 2:00 when the Beige Book came out. Volume appears to be higher on the Nasdaq, which will give that index another distribution day, but may be only slightly higher on the S&P and once again well below average.

Technically, we continue to chop around in this range - the Nasdaq briefly got to new highs today but reversed. The S&P got as high as 949 (resistance is at 951) and reversed, but once again held support around 925. Both indices did bounce off their 9 day moving averages which is bullish and I can't get bearish until they at least can break these short-term moving averages to the downside. Meanwhile, a clear break above 950 would likely be very bullish and give the market another leg up. The financials continue to coil and the number to watch as key resistance there is right around $12.60 on XLF.

I did not make any moves today, but my long watchlist held up remarkably well given the way the market sold off hard at the open. RAX, my purchase from yesterday, moved up and followed through a bit, although it did not close at its highs. A few small oil stocks (WH and DBLE) had nice, heavy volume moves today. The only real breakdown I saw was CVGW, and even that bounced off its 20 day moving average (although I am no longer interested in that stock given the way it looks now). I continue to find an inordinate number of bullish flag patterns setting up and consolidating nicely, and based on these, I have to assume we are more likely to move higher from here than fall. I am not discounting anything and a break of support would have me changing my tune quickly, but based on what the charts are telling me right now, things remain very much bullish.

Top charts I see out there (most of which I have mentioned this week in a video or in a post) include GROW, APSG, SYNO, AHD, KONG, JCG, UTHR, XTXI, PDO, GMXR, KNXA, CORE, NOG, FRPT, SVVS, ICO, and LVS. I may be entering into a few of these over the next few days as swing trades if the market continues to hold support.

That's about it - right now there is a lot of volatility intraday but when you look at things from a longer-term perspective, we are still basically locked in a 25 point range on the S&P. I am doing my best to ignore these intraday swings and just focusing on those levels to see what happens. With volume decreasing over the summer, this is probably going to be the norm for a while. Take care, and good luck Thursday.


Anonymous said...

I've been away for a few days, but still reading your blog, keep up the good work.
I am still trading very short term and locking profits whenever I get them. One of these days I will trust this rally, but right now I don't. Anyway the best way for me to trade is to limit my losses quickly and take profits quicker.

On the hockey front.....GO Pens GO!!!!! good luck for gamne seven.


Mac said...

Nothing wrong with cutting your losses quickly and taking profits when you get them - you can be successful that way.

Thanks for the well-wishes - it should be nervewracking. Not expecting a win, but you never know in a one-game situation. Fleury's play will determine the outcome in my opinion.