Friday, February 19, 2010

State of the Market - 2/19/10

What looked yesterday evening to be quite the crazy session turned into a boring one today on Wall Street, as another options expiration day came and went with very little action intraday. News last night that the Fed raised the discount rate caused futures to tumble, but the market showed little actual reaction to the news. There was some selling early on but the bulls righted the ship quickly and stocks rose back up into the lunch hour. From there, they chopped sideways and ended the day with slight gains. Volume may end up slightly higher due to options but as of 3:56 it seems like it might still be lower than yesterday.

Nothing really changed at all today from what I wrote yesterday - we have most of the market sitting right at or above key 50 day moving averages and volume continues to lag to the upside. The one major bright spot is that the Russell 2K continues to lead, but there are a lot of question marks as well. We're overbought and a pullback could occur but with this market we could just as easily grind higher on low volume for another week or so.

I am still in cash and quite content for now. Ideally, we would see the market rest here for three or four days, which would allow individual charts to setup some consolidation patterns. We all know how "ideal" the market acts, so I am expecting nothing of the sort. Since I don't see many nice setups here, it means doing nothing might be the best idea early next week as well. Enjoy the weekend - I know I will.

1 comment:

Doctor Stock said...

Great post... I agree, nothing may be the best course of action on Monday. I'm not 100% cash, but I'm weighted that way... I'll take advantage of opportunities; however, there have not been many lately.