Thursday, April 22, 2010

State of the Market - 4/22/10

A good day today as we saw the bulls clearly reestablish themselves for the first time in a few days.  Stocks traded down big in the first hour of trading until the dip buyers came in to push stocks back up.   It was a slow and steady climb that took stocks all the way into positive territory after being down over 1% earlier in the day.  Very bullish intraday action overall. 

The Nasdaq opened below its 9 day moving average for the second time this week but was once again able to close above it.   The S&P tested its 20 day moving average for the second time in a week but also closed well off of it.   The Russell 2000 outperformed by a large margin today, closing easily at new highs for the year - it is always good to see small caps lead.   It is at the top of an uptrend channel so that is something to watch.

Besides financials (which are all over the place), most sectors look good after today.  SMH bounced off its 20 day today and could soon move to new highs.   Retail was strong and outperformed today.  Gold and oil is kind of a mixed bag - they haven't completely broken down but also haven't bounced yet.   Something to keep an eye on as well.

My QID position was stopped out today at $15.58, giving me a breakeven trade.  I went into FAZ this afternoon at $11.87 but was stopped out of that at $11.55, giving me a 3% loss.   That was one of those trades that I kept hesitating on because I thought "why I am doing this?" but for some reason went ahead with it anyway.  I am back in cash but still have some stocks (about 10) I am watching as potential longs.  I have more confidence in taking longs after today's intraday action.

I guess after today you have to lean back to the long side but I think there is also a chance that this up and down action of the past is what may occur for a few more weeks until the news and earnings dies down a bit.   We could just chop sideways for a while as a way of consolidating the large move from February to April.   Hopefully we don't get a breakout and reversal tomorrow - I am sure that would frustrate a lot of traders.  

Lots of sports tonight here in Pittsburgh with hockey and the NFL draft so I am out - crazy times to be a Steelers fan.   Good luck Friday.

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