Friday, March 26, 2010

State of the Market - 3/26/10

We saw a session very similar to yesterday on Wall Street today, as stocks started the day in a strong manner but ended weakly and closed near their lows for the day. The morning action was positive but during lunch stocks fell quickly and although they bounced back slightly, they never could regain much momentum in the afternnon. Volume looks like it will be lower than yesterday.

Technically, this is two days in a row now that we've seen a market start strong and end weakly. Maybe it doesn't mean anything, but maybe the action is foreshadowing further pullback in the near future. From a technical perspective, the lows of today need to hold (around 2385 and 1161) or there seems to be a good chance the 20 day moving averages will be tested for the first time in over a month. Those levels (2355 and 1150) are the numbers I would watch early next week.

The dollar was weak today along with the market so my idea about the inverse correlation between the two being back might have been too early. Financials look a bit toppy here to me but most of the other sectors look to just be pulling back in a normal and healthy manner.

I didn't even watch the market today and am glad I didn't - I would have likely be whipsawed a bit on any longs I may have entered. I'll be back this weekend to share any interesting setups with you. Until then, enjoy the next two days and take care.

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