Friday, February 12, 2010

State of the Market - 2/12/10

Another short post today as I am going out with my wife soon for an evening away from the kids (yeah!). The market started off really poorly this morning, frustrating I'm sure many bulls that joined the party yesterday, but it was able to right itself and finished well off its lows and near its highs for the day. Volume appears to be a little heavier than yesterday.

Based on what the charts look like, I would expect the market to fall from here, as there are still many, many bear flags out there, including on both the S&P and Nasdaq. There is also the fact that the financials have not yet broken above key resistance, a point I've harped on recently but one I feel is quite important. Many more setups are showing on the short side than the long side, another bearish development. However, with the market refusing to sell off hard this week, it is hard to trust the idea that the bears have total control of this market. Shorts have not worked well at all and days like today where stocks finish well off their lows give some credence to the idea that an odd-looking bottom is being formed here. It's really a tough call.

I am in cash, so I really don't care which way we go from here, but I don't have a great feeling either way as to which way it will be. I just hope we don't keep chopping around like we have for the past week, as it has been very difficult to trade these back and forth moves. I will take a close look at my scans this weekend and hopefully get some clues as to the market's next move. I'll try to put a video together for that this weekend. Take care and enjoy the next few days.

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