Tuesday, June 1, 2010

State of the Market - 6/1/10

June opened with a more bearish action today, as stocks gapped down, gained almost all of the losses back, but then gave it all back in the final two hours to close with large losses once again over 1%.  I really don't have much more to say than that because not much changed today.   We are still in a downtrend.   There are chances of bounces but every bounce we get (including intraday) is sold off.   The only real play right now is to short bounces, but I prefer to wait until we get up into a safer area from which to short, something I talked about in this weekend's video.  My guess is that we will continue to see volatile intraday action and the mantra remains the same for me - cash is a great option (the best option) unless you're daytrading. 

I did post one main short to focus on in this weekend's video (BEXP) and posted it again this morning on Twitter.   I did not take this short but it does really look good.   Being down two days in a row, I don't want to chase but it is one worth watching.   BEXP was a former leader from 2009 and now appears to be topping out - it is these type of former leaders that you want to watch out for in terms of forming nice short patterns.  CREE and GMCR are two others I would watch although neither is anywhere near being a short right now - they both need bounces.  

Good luck Wednesday - patience and discipline remain key right now.   Take care.

1 comment:

Anonymous said...

The bounce has already happened. Not sure what you are waiting for ? We will slide down to 950 while you are waiting for a good bounce. Kinda like last year while you were waiting for a pullback to buy.