Wednesday, November 18, 2009

State of the Market - 11/18/09

For the second straight day, I really don't have much to say. Today was quite a boring day with more low volume and very little price movement. The S&P and Nasdaq do keep holding their former breakout levels around 1100 and 2190 respectively, so that is good news for the bulls. Those numbers should remain important. Perhaps the Thanksgiving holiday is starting early with the volume being so low, but it's been that way for a while now.

I remain totally in cash and don't plan on building any big positions anytime soon because I just don't see much that is worthy of big positions right now. Swing trading remains difficult as many strong stocks are very extended and just won't rest, but also that leaves them very vulnerable to sharp pullbacks like we saw in NANO today, so chasing them is risky. I have my eyes on a few plays that are forming little flag patterns (RDWR, ISSI, EXLS, IUSA, UFPT) or cup with handles (G) but that's about it.

My guess is that due to seasonality and the continued weakness of the dollar, this market will grind its way higher over the next week or so. If the dollar ever does bounce significantly, then heaven help those that are aggressively long, but right now it doesn't appear the bears will ever come out of hibernation. Take care and good luck tomorrow.

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