Thursday, April 8, 2010

State of the Market - 4/8/10

We had another very bullish session today on Wall Street, but things didn't start out that way.   After some heavier volume selling yesterday, stocks opened the session lower and looked like they wanted to sell off further.   The recent trend continued, however, as a bottom was put in about fifteen minutes into the session and from there stocks climbed steadily, reaching positive territory by lunchtime.  The afternoon action was a bit choppier, but stocks still finished with small gains which given the start is impressive.   Volume was lower than yesterday's distribution levels. 

Technically, the 9 day moving averages were tested today on both the S&P and Nasdaq but both held, so the streak of closed above that level is now at 31 (I believe).   Simply amazing.  The trendlines from February are still holding for both indices as well.   No need to get too bearish about anything until we close under these levels at least once.   Then perhaps we roll over but until it happens, there isn't a reason to do anything but continue to look for longs as they become available.

Sector-wise, I also see no damage anywhere of note - retail had a very strong day today and is a sector I need to pay more attention to.  Oil has rested the past two days as USO bounced off its 9 day moving average today - a good sign.   All in all, the picture remains bullish.

From the video last night, there was one really big winner - USEG.   I liked the way this coiling pattern developed and it did have a huge move today, closing up about 15%.  Hopefully you got into that one - I unfortunately did not because the move didn't start until 10:10, which is after the period I can watch the open due to work responsibilities.  It didn't do anything for the first twenty minutes of the session, and that's when I trade.  It sucks for me but it happens and there isn't much I can do about it - sometimes I miss entries.   It goes with being a part-time trader.   I actually did enter this late at $7.15 but it was only intended as a day-trade because I thought a move through $7.30 would push this stock even higher and kind of expected it.   I am sort of stuck with it now but will look to get out tomorrow, hopefully a bit higher.   From the video, I also entered a little SEED at the end of today's session at $10.09 - strictly an anticipatory play as it continues to coil tightly.   I will get out quickly if it moves much lower than where it is currently at.

My other longs acted pretty well overall (CSIQ and NEP) - both bounced back off their lows and I will look to hold both for perhaps further upside over the next few days.   I also still hold CISG in my IRA and it was up slightly today. 

These reports may be getting rather boring because it seems my description of the market has been the same for a long while now, but I don't know what else to say.   Markets can always stay "irrational" much longer than supposedly rational thinkers such as myself can believe, and the past month or so is a great example of that.   Someday, perhaps soon, this market will have a significant pullback.  Until it actually happens, however, it makes sense to keep riding the trend as long as possible.   Good luck Friday.


CW, Portland OR said...

In NEP, also....when oil gets going again, it will pop

Mac said...

Let's hope so - didn't give much back today so that's good.

Jeremy said...

Mac, I am a foreigner and have this question. When you said you buy stocks in IRA, is that a long term account? is your trading style different from your regular account? thanks

Mac said...

Hi Jeremy. IRA's are personal retirement accounts here in the US and I trade them slightly different - I definitely don't trade as much in those and usually avoid really low priced or volatile stocks in that account.