Friday, June 5, 2009

State of the Market - 6/5/09

Not a great day today on Wall Street, as stocks could not hold onto their early gains following a better-than-expected jobs number and finished flat for the session. Stocks gapped up to start the session, but that gap was immediately sold. Stocks tried to bounce back starting at 10:00, but could never get back to their opening highs and went back down to test the morning lows around 2:00. They bounced a bit into the close but finished basically flat for the day. Volume was lower on the S&P and perhaps a bit higher on the Nasdaq.

Technically, the reversal may be bearish but it doesn't look to be that big of a deal on the daily charts. If it came on major volume, then I may be more worried, but everything looks OK for now. The S&P did briefly get above 950 at the open, but looks to be trading in a 20-point range now between 930 and 950. A break of either of those levels would likely be significant. The Nasdaq could stand to pullback a bit but support sould come in first around 1806 and then around 1775. The only main worry I have about today's action is that XLF looked to be breaking out from a symmetrical triangle but reversed after touching its 200 day moving average. That bears watching.

I didn't make any moves today but my work committments are officially lessened greatly now and I will be getting back into the swing of things starting next week. If you follow me on Twitter, I will be looking to post there more often intraday if I see something interesting. In terms of the stocks I showed last night, most were not damaged much from today's reversal and actually, a day like today could benefit many of them, giving them a bit more rest. We'll see if I have more bullish patterns setting up in my scans this weekend or if I find a bunch of bearish reversals in individual stocks.

Enjoy the weekend - I'll be back at some point. Take care.

1 comment:

Anonymous One said...

Exactly. That was why I didn't buy in either. Do you think the volume on the bounces has to be lower than the volume on the pullbacks to signify consolidation on an uptrend? Or roughly the same on average?

It sounds like you would have bought in around 875 if the volume on the bounces would have been heavier? That was my plan, but I never saw it and, like you, that was enough for my bearish outlook to take over. If I could just focus on a shorter time frame, I might have seen it as any opportunity.