Thursday, January 28, 2010

State of the Market - 1/28/10

We saw what I guess I would call an interesting session today on Wall Street, as stocks opened slightly higher, fell hard from there, but then bounced back in the afternoon before falling again hard into the close. Stocks ended in the middle of their range but still had large losses. Volume appears to be heavier on the Nasdaq but lighter on the S&P.

Technically, we have seen expanded intraday trading ranges each of the past three days but we've gone virtually nowhere overall the past five days on the S&P and only slightly lower on the Nasdaq. Right now, the technical patterns on both indexes are a little odd, but nonetheless look more bearish than bullish based on the continued distribution we are seeing. Around 3:30 today, when the market were off their lows, I thought a bounce was an even better possibility than I did yesterday (two straight closes bouncing off support levels), but that close made me question those thoughts. I really don't know what to expect tomorrow - we have a few earnings reports plus the GDP number that will likely keep things volatile.

Sector-wise, most ETFs look similar to the markets - their ranges are expanding but they are not really going anywhere. Financials held support today which is good and semiconductors bounced off their lows as well. The U.S. dollar continues to look like it wants to break above some heavy resistance, however, so that could affect things. GLD is at an interesting point, with support around $105 (tested today) so I will keep my eye on it. It remains oversold as do most commodities but I don't know if that matters right now.

I did make a few trades today with very little success. I entered ALGN last night after-hours at $18.40 as an earnings trade and it got as high as $19.25 this morning. However, it could not hold up to the selling in the overall market and my stop was hit at $18.43, losing me a measly 0.29% on the trade after commissions. I should have chosen NFLX last night instead. I also entered TSTC last night at $15.00, but my entire order wasn't filled and it was a very, very small position. It didn't bounce today and I was stopped out at $14.60 for a 3.6% loss. I also got pulled into PEIX this morning as it spiked up. This is a stock I've been watching because I know it can move fast and the overall pattern is very bullish, but it didn't close real well today. I am still in this however.

If my earlier paragraphs are confusing, I apologize, but that's kind of how I feel here. I don't have a strong feeling one way or the other in the very short-term and when you're lacking that feel, trading becomes difficult. In the intermediate-term, I expect this pullback to continue, and I do have some short setups that look good to me. At the same time, I see some stocks that are close to what should be very strong support, so I am tempted to play these on the long side with a tight stop. I'll try to share these charts later tonight here or on Twitter if I have time. Good luck Friday - I'm sure it will be interesting.

Longs to Watch - NANO, EXFO, PEIX, COIN, RNWK, EGI, IDC, KNDI, PDC, RICK, CAGC, ZSTN, MEA, BEXP, NEP

Shorts to Watch - DSW, SLG, GFA, SPG, REV, CLW, GPRE, PCP, GOL, CSIQ, NILE, YGE, ED, PWRD, LL, TSL

1 comment:

CW, Portland said...

In cash...and it feels good