Wednesday, April 7, 2010

State of the Market - 4/7/10

We had a volatile session today on Wall Street, as stocks started the day lower.   They did their normal bounce off a gap down until around 10, then fell back to test the opening lows.   Those lows held and from there it looked like we would move to positive territory yet again.   That was not the case, however, as stocks hit their highs around 1:35 and fell sharply for the next hour and a half on debt news.  There was a strong bounce back into the close, but stocks still finished with decent losses for the day.  Volume was heavier, giving the indices another day of distribution.

Technically, a day after talking about the 9 day moving average and how it hasn't been tested in so long, the two major indices closed right near those levels today(actually they bounced slightly off of them).   They were able to stay slightly above the former highs from a week ago as well which is bullish.   All in all, the selling doesn't appear to have caused any damage to the indices or sectors, so as of now it's probably not a big deal.   If we get more selling tomorrow, then we'll have to reassess things. 

Gold had a super strong day today and staged a nice breakout from what appears to me to be an inverse head and shoulders pattern.  I was really tempted to enter late (and I still may) but the lack of heavy volume had me pass for now, as well as the way it closed.   This move today is something to watch however. 

 Chart From Telechart, Courtesy of Worden Brothers, Inc.

I had a decent day today but not nearly as good as it could have been.   Due to work commitments I was not able to catch the open and only saw about three minutes of action around 9:40.   CSIQ and AIG both spiked nicely at the open, especially with a down market, so I moved my stops up to yesterday's close on both figuring it would lock in at least some gains if they reversed.  CSIQ was no problem as it closed up about 6% and didn't give much of its early pop back.  Hopefully you caught this play a few days ago as I pointed out solars as an area to watch.

AIG on the other hand sold off its early pop and my stop ended up being hit at $35.94 for a measly 1.6% gain.   Well, that was only two cents away from its lows for the day, as it slowly climbed back and then absolutely shot out of a cannon in the final hour, closing up over 10%.   I can't tell you how frustrating that is.  Getting whipsawed so much last week probably hurt me on this trade as perhaps I set my stop too tight.   Maybe I should have just moved it up to breakeven.   Being rushed time-wise didn't help either.  Either way, I am not very happy.  Hopefully you caught this setup as well from the weekend video and didn't get stopped out like me as it looks very nice right now. 

I also entered NEP this morning at $9.44 as it was breaking above a nice coil pattern.   This is another one I wish I would have caught at the open but there was little I could do since I couldn't be at my computer.   It had a sharp pullback midday but closed fairly well and was up on huge volume today.  Hopefully it can keep climbing from here.   Not much else moved today so I didn't force anything else.

We'll see tomorrow if the selling today was just a one-day event or not.   For the longest time, dips have been bought aggressively so I am not going to guess that this time will be different.   If we get some signs, then I will change my outlook but I'll basically just keep looking for longs as they come and manage the positions I have.   Not much else to do.  Take care and good luck Thursday.


positiontrader said...

I felt bad just reading YOUR AIG stop, so I am sure you feel a lot worse Mac. At least, you were totally right about the move, and that should help you get your confidence back.

Good Luck.

NYC Trader said...

Mac- See , dip buying works.