Sunday, December 27, 2009

Some Weekend Thoughts...

Hi, traders. Sorry for the lack of posts last week but with the slow holiday trading environment along with being busy with Christmas preparations, it was hard to get material out there. I do hope you all had a great Christmas and enjoyed the time spent with friends and family. With two little boys and a big extended family on my wife's side, Christmas was certainly fun and exciting here.

As for the market, I am just going to post some thoughts randomly as I look at my charts and you can take the comments as you want. I do think this week will be very much like last week - slow, boring, but likely with an upward bias. I don't plan on making many moves but if you really have to trade, there are some candidates out there to watch.

Overall Markets (S&P, Nasdaq, Russell 2000) - Both the Nasdaq and Russell have had breakouts and are quite extended in the short-term, along with showing negative divergences on my indicators due to the low volume last week. Normally, I would be very tentative, but were not dealing with a normal market environment, so I would not be surprised to see the market grind higher next week on more low volume. You may just have to throw the low volume out because volume really hasn't mattered much all year. If you're buying, be aware of that these indices are technically looking risky here, but again, the seasonality might trump things. The S&P continues to lag but is now slightly above its recent range. Certainly not the most convincing breakout but with the holiday environment, maybe asking for more is unreasonable.

U.S. Dollar - Bounced off short-term support Friday (9-day moving average) and could just rest a few more days or chug its way higher. I am very surprised that the dollar and the market have risen together but perhaps I shouldn't be - everything that makes sense has been thrown out the window this year and this is just the latest example.

Oil and Gold - Gold tried to bounce a bit Friday but is still somewhat oversold. Oil meanwhile has bounced right back into its channel after breaking below it about two weeks ago. It is very overbought in the short-term so I would be careful chasing names in this sector. Both XLE and OIH have patterns that look like potential short-setups so that is another reason to be careful with this group.

Other Sectors - Financials and retail continue to basically go nowhere except sideways - I am keeping an eye on XLF for a potential breakout but right now it just looks like it is asleep. Keep an eye as well on the truckers - I am seeing a few names setup in this group (ABFS, UACL, VTNC)


Hope this helps someone out there - take care and good luck this week.


Anonymous said...

Hi Mac:
Hope you had a great Christmas with friends and family. Just letting you know that I really appreciate your frequent posts with trading ideas -- while I have not been able to make money off it the past few weeks, I do learn from them and certainly keep a few of your stocks in radar. Hope you have a great New Year too. Good luck!


Mac said...

Thanks PA