Thursday, October 15, 2009

State of the Market - 10/15/09

After a very important technical day yesterday, we had sort of a snoozer today on Wall Street, although the action was overall bullish. On some disappointing earnings news, stocks started the day lower, and actually fell to further lows by 11:00 after a short bounce. Stocks held there, however, and started a slow climb back to positive territory (at least for the S&P) by the time the session had ended. Volume appears to be a good deal lower than yesterday as of now.

Technically, we are still in an area where this market could really run, but we are going to have to see how the earnings play out. Remember, in a news-driven environment (which we are certainly entering now) technicals will not matter as much. Ideally, I would like to see a few more days of calm trading much like today so that the market can prime itself for further gains. I also feel that the recent resistance levels of 1080 on the S&P and 2169/2155 on the Nasdaq need to hold over the next few days. If we would fall below those levels, then I think the breakout we saw yesterday would have a little doubt behind it. We'll see what happens.

Sector-wise, the financials were weaker today but did hold just above their former resistance levels around $15.44 on the XLF, and that is bullish. Oil broke to new highs for the year today and that is also bullish for the overall market (although reports today say we are not seeing any inflation...wink, wink). The oil/market/dollar inverse relationship continues and who knows when it will stop. As I said yesterday, the dollar is in a technical position to bounce, but right now that is certainly not a given. I did watch an interesting video on the dollar today from Yahoo Finance - sentiment is at all-time lows so a countertrend bounce is a possibility.

I made no moves today and likely will not make any tomorrow with more earnings coming out along with options expiration. Nothing really did anything on my watchlist today anyway, but I am continuing to watch several names for possible entries, most related to China. If I have time I will share them in a video but may wait until the weekend again due to options. Good luck Friday.


Anonymous said...

Did you close your eyes and buy this morning like I told you. If not, you have one more try tomorrow. Just do it like they say. We have at least a few more months to go.

Mac said...

Maybe you'll be right anonymous but I don't like hearing people say "just close your eyes and buy anything" - that's the type of talk you hear near tops. Not saying we will for sure top here. Just saying. I've been wrong before so if I am wrong so be it. Good luck.

Anonymous said...

I ammbuying ATPG and SGY, they worked very well today given that general market is not that strong.