Wednesday, May 5, 2010

State of the Market - 5/5/10

It's my wife's birthday today so today's post will be short.   After going through my scans quickly, I can tell you that it is a real mess out there, meaning that it is hard to know what is going to happen next.  The market started the day lower as futures fell hard throughout the pre-market session.  A bottom was quickly put in, however, as stocks bounced right up around 10:00, erasing all of the day's losses.   The momentum didn't continue though, as the bears came back to play as the lunch hour started and pushed stocks right back down toward the morning lows.   Those lows were not touched, but stocks didn't bounce back much in the afternoon and finished in the middle of their intraday range.   A lot of choppy trade today - a lot.  

I see a lot of charts that had breakdowns today - stocks that were up to this point holding up OK, like MPG and AXAS.   I also see a lot of charts that reversed well off their lows and held those reversals like CGA and PAL, which on the surface would appear to be bullish for those stocks.   There is so much variation in the stocks I see that it is hard to get a grasp on where we go from here.   I was stopped out of my PMI position from yesterday at $4.83 and am back in cash.   I am looking for further selling from here before thinking about getting long for a bounce.   1150 on the S&P seems like an area where a bounce might make sense.   I won't look to get short until we get back up into the neckline of this recent head and shoulders pattern around 1180.   

Good luck Thursday - the volatility right now is crazy and will likely continue.   Be careful. 

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