Tuesday, January 26, 2010

State of the Market - 1/26/10

You know, for the second straight day, I really don't have a lot to say. We saw another very weak day today, as although the closing numbers will say only that the market was slightly lower, the intraday action shows another story. We saw another bounce attempt sold off very hard today and both the S&P and Nasdaq have formed three-day bear flags that on the surface makes it looks like far lower prices are ahead of us.

I have to through my scans tonight but I am guessing there will be a lot of bear flags on individual charts as well and I may have to consider playing a few of these short over the next few days. If I see any good candidates, I will share. My only worry is that everyone is seeing this market move lower and it almost seems too obvious to me that we just pause for three days and then keep falling from there - it almost seems too easy for the bears.

I remain totally in cash as I see absolutely nothing that interests me on the long side as a dip buyer and in a news-driven environment (which we are certainly in now) shorting overnight isn't very attractive to me either. I'll continue to watch that side but I have a feeling I may be in cash for a while. Sometimes that's the best position to have, however, so no bigger - more and better opportunities for making money will come forth in the future.

My only advice is be careful and don't try to be a hero here - with all of the news coming out of Washington tonight and tomorrow, it is going to likely be a crazy market, one that I don't think I want a part of, even though that is boring. Take care and good luck if you're trading tomorrow.


Anonymous said...


I think you should stay in cash for the rest of the year! You missed the rally of the lifetime last year and now you probably missed the downside too.

Mac said...

Thanks for your great insight - I really appreciate it...dude.

positiontrader said...

Hi Mac!

End of second paragraph - surely you mean bears??

positiontrader said...

P.S. Loved the dude at the end of your comment.lol

Anonymous said...

Sorry, I mistyped. I meant to say you missed the **ENTIRE** rally of the lifetime last year!! I told you multiple times to close your eye and buy.

Mac said...

PT - Corrected the typo - thanks for pointing that out.

Anon - thanks for the clarification - I appreciate your insightful comments even more now. If you read my year end review, you can see how I traded 2009 - I missed the beginning part of the rally in March and April but after that was more long than short - mismanaging positions was the main problem. You are a genius and hopefully someday I can become as smart as you are.

positiontrader said...

With all due respect Mac, I dont think you can ever become as "smart" as Anon. "Close your eye and buy"....think you can ever follow that advice??