Thursday, September 3, 2009

State of the Market - 9/3/09

For most of the day, it looked like we were going to have a very similar day to yesterday on Wall Street, but that changed in the final hour of trading. After some early selling, stocks bounced back into a consolidation for the majority of the session. They did rise however the entire final hour and closed at their highs for the day in a bullish manner. The only problem is that volume looks to be a good deal lower on the S&P and slightly lower on the Nasdaq.

Technically, I've been mentioning that an ideal scenario would be a further pullback to the areas of the 50 day moving averages on the indices, but rarely do things work out ideally in the market, and perhaps we're seeing that now. Today could be the start of an oversold bounce or it could be the start of a bear flag being formed. It is too early to tell. I kind of think the lack of further pullback will likely lead to more selling soon, but that's just a guess. If we do bounce higher in this area, it would still set up a possible right shoulder across the board (S&P, Nasdaq, Small Caps, XLF) and that is something I am going to continue to watch. Right now, I am more than anything neutral in the very short-term and will wait to see where this bounce goes.

In terms of individual stocks, a few setups that I've shown recently (CRY, EGOV) showed a little life today and I still do have my eyes on a few long setups (TAM, CRM, AM, ELGX). To be honest, with starting back to work and the time it takes to get back into a routine, I haven't had too many opportunities during the day to put trades on, but I will keep watching I guess. With a few exceptions (DRIV and BKE on breakdowns) I am not finding many short setups.

We'll see what tomorrow brings and if the bulls can keep the bounce going - on a longer-term picture all we are doing is still moving sideways and that makes putting on anything beside very short-term trades hard to do with confidence, at least for me. With the long weekend ahead, tomorrow may be slow so I don't know that I'll be doing much. Good luck.

1 comment:

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