Tuesday, August 4, 2009

State of the Market - 8/4/09

A very boring day overall today on Wall Street, as stocks meandered their way through the day, moving higher for the first half of the day, then lower into the close until the last ten minutes of trading, when the market spiked up quickly. That quick spike allowed the market to finish with small gains across the board. Volume appears to be a little lower on the S&P and about even to slightly higher on the Nasdaq, but I do not have the final totals.

Technically, both the Nasdaq and S&P moved nicely above resistance (2009 and 1000) early in the session and it looked like they would not be able to hold them. The late spike allowed them both to hold those levels so the bulls remain completely in control here. We are still in an area where a pullback could certainly happen as I showed in the video last night, but we'll just have to wait and see if it happens. The financials continued to move higher today (albeit on lower volume) and oil was basically flat today as the U.S. dollar did not fall any further today.

I made a small trade in CAEI today intraday - more of a day-trade than anything as I missed the open today and therefore missed the big move in this stock and the better entry. I entered $2.46 as it tried to break above an intraday flag, and although it moved up as high as $2.57 after that, breaking some key resistance around $2.47, it could not hold that move and fell back, stopping me out at $2.36. Not a big deal but it would have been nice if I was able to catch it at the open.

From the video last night, there were a few stocks besides CAEI that moved, but not many and much like yesterday, it tells me a lot about this market right now. POL, SQNM, BDK, and RICK had nice moves today, but POL's breakout came on much lower volume so I passed. Same deal with BDK. I perhaps should have looked at RICK a little closer as volume did come in higher by the close, but intraday it wasn't as heavy as I would have liked. Perhaps I am expecting too much right now with volume being that it is August, but I can't just ignore warning signs when I see them. I want to see more breakouts like WMS, which closed near its highs, had very heavy volume, and has good fundamentals. I missed this one in my scans however.

GIVN and ABD are two breakdowns that will cause me to take them off any watchlists after today. Meanwhile, my favorite setups are VNDA, TBI, and GOK - we'll see if i get any more tonight but I somehow doubt it. At this juncture, I am willing to take positions if these stocks breakout, but I will remain in short-term mode in terms of taking profits if I get any.

That's about it for today - short post because it was a boring day overall. We may have a lot of these over the next few weeks as August volume makes things very slow. I still have a feeling August is going to be a choppy month but we could melt-up further much like we did today. Trading less in a slow environment is usually a good idea. Perhaps my family timed our vacation for next week very well. Good luck Wednesday.

7 comments:

dakapbj said...

Mac,

You have found some great names lately. I have benefited from VITA and SBUX, and today RICK. Keep up the great work! Quick question: To me, looks like one of your recent names, DIN, could be setting up for a short. What do you think? Thanks again for all your ideas!

Mac said...

Glad to hear you're picking up some good trades. Overall, I am not looking to short here at all, but I guess it never hurts to keep some names on the watchlist just in case. DIN could form a little bear flag here but I would need to see some more sideways to slightly up action before being really interested. THQI is a formation that I like - very clear bear flag there.

dave said...

"I perhaps should have looked at RICK a little closer..."

IF one goes to RICK, one shouldn't look too close - OO

And, of course, i wasn't talking about their books although i've often wondered about that.

Regards,
dave

Anonymous said...

Mac, could you check out URE and XLF tonight? Thanks, Elena

Mac said...

URE looking similar to XLF - showing some negative divergences on moneystream and obv, but keeps moving higher anyway.

dave said...

"URE ... showing some negative divergences on ... obv" ??

Weds high looks confirmed to me.

Regards,
dave

Mac said...

Yes, much like XLF which had heavier volume, the heavier volume is URE may take away those divergences.

I think I am to the point where I may just take the volume bars off my charts because anymore, it doesn't seem to matter as much.