Thursday, July 9, 2009

State of the Market - 7/9/09

Quite the "blah" day today on Wall Street - glad I spent the day golfing. The market went lower for the first two hours of trading, moved higher from there but then fell back into the close to finish only slightly higher for the day. That was the action on the Nasdaq. The S&P was very quiet all day, trading in only about a five point range. Volume appears to be very slow.

Technically, we are getting a slight bounce here as you look at the charts, but it doesn't look very powerful as of yet. As I stated last night, I will be watching the 1775 area on the Nasdaq and the 910 area on the S&P to cap any bounce that occurs here, although I by no means think it is a given that we bounce that high. When compared to the selling we saw on Tuesday, the gains of the past two days are very weak and continue to paint a bad picture for the bulls.

Individual sectors bounce a bit as well today, but some, like the financials stopped at they came upon former support levels. XLF got as high as $11.37 today before moving lower than that - $11.30 was its former breakout point. RTH hit its 9 day moving average and reversed as well later in the session, closing slightly lower. Energy did the same thing today, with OIH getting as high as $93.56 before closing at $91.56. The neckline on its head and shoulders pattern is at $92.75, so another reversal at key levels there. Oil itself via USO closed slightly higher after getting as low as $32.10 (I said yesterday $32 would be support), but again it wasn't a strong move up considering how oversold it was. Overall, not a real bullish picture here yet.

We can still bounce higher and I hope we do, but I remain bearish and will look to short the bounces we get. I was not able to get to my scans as much as I had hoped last night but will do so tonight and plan on putting a video out with some ideas for the next few days. There may not be any out there, but I'll see what I can do.

I haven't mentioned probably the biggest variable in the market right now - earnings season. It started in earnest today and will have a huge affect on the direction this market takes. I have no idea how the earnings will turn out this quarter, although the expectations are probably not as dire as they were last quarter, so traders will likely be pickier in what they buy. Just be careful - any time you plan to make a trade, make sure to check when the company is releasing its earnings. You don't want to be caught on the wrong side of an earnings move, especially right after starting your position. So please remember that over the next month or so. Take care and I'll be back later, assuming I find some interesting charts.

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