Tuesday, April 6, 2010

State of the Market - 4/6/10

We saw a slightly higher session today on Wall Street, but the intraday action was much more bullish than the final numbers will show.   Stocks started the day with a gap down, but as has been the trend recently, that was the bottom and stocks rose steadily from there back around yesterday's closing levels.   They consolidated from 11:00 to 2:00, and then broke to new highs for the day at that point.   They could not keep the momentum going into the close as they pulled back around 2:30, but overall it was a bullish session.  Volume looks to be weak, but what else is new?

Technically, I mentioned yesterday that the Nasdaq lagged the S&P but it did move to new highs today along with the S&P and Russell so no worries, I guess.   Semis were lower which is interesting in the face of the Nasdaq's outperformance.   As I said yesterday, if these get going, watch out for the Nasdaq.  Financials broke to new highs which is good (although it came on weak volume).   The dollar reversed off of its opening highs and looks poised to fall after a weak two day bounce.   This would likely be good for the overall market if it occurs.  

So far, my weekend hunch about things getting just too "easy" has been totally incorrect.  I've come to the conclusion that the market is simply never ever going to go down for more than one day (or a few hours) in a row.  The last sentence may read as if it was written in jest, but I am starting to actually believe it.  This run is really amazing to me.   If you follow this blog, you know I like to use the 9 and 20 day moving averages as short-term support levels.  Well, the last time either the S&P or Nasdaq closed below their 9 day moving average was February 23, 2010 (and that was by a whopping point).   That's 29 trading days ago by my count.  I don't have the software (or time) to check if we have had any streaks longer than that in the past few years, but visually I only see runs from 7/14/09 to 8/14/09, 9/18/07 to 10/11/07, and 3/30/07 to 5/10/07 as comparable in the last few years, and those were all shorter than this.   If anyone has the ability to get more exact numbers, I would be interested in hearing about them.   Again, simply amazing, especially when you factor in volume.  It is what it is, I guess - no need to argue against it.

I made one trade this morning, entering CSIQ at $24.10.   Buying breakouts hasn't worked well for me in particular recently so I figured I would mix it up and buy the dip.   AIG acted well today (surprisingly) and I am still in that as well.  CISG is still in my IRA as well.   I will continue to look for longs as they pop up as that is the only game plan that makes sense until we get a signal that the market wants to start acting more like its historical norms.  

Good luck tomorrow - I'll share some new plays and setups if I find any that stand out later tonight. 

No comments: