Wednesday, June 16, 2010

State of the Market - 6/16/10

Sorry for the early post, but I have family coming for the afternoon and evening and will not be able to post later.   As for today, the bulls have to be happy with what has transpired so far.   As I said yesterday, this market was and is very stretched to the upside in a number of ways, and with the day starting with bad numbers from FDX and a small gap down, the setup was there for the bears to take the market down a bit.  They really couldn't do so, however, and that is a good sign for the bulls.  We'll see what happens with the rest of the session but as of now today was another strong showing. 

I was stopped out of both of my short positions today with small losses - CRZO at $20.54 and FCX at $67.07.  I am back to 100% cash and will likely not look at shorts now that a technical follow-through day has occured.  All of my timing indicators are still bearish but some are very, very close to turning bullish.   If and when the two main ones I focus on turn bullish, I will do my best to find longs and stay on that side of the market.   I am still market neutral here but will not fight the trend once I get the sign that I should definitely be buying.  At the same time, I want to stick my numbers and can't get too aggressive until I get that signal for sure.

We are still quite overbought here and it is options expiration this week, so it pays to be careful, but keep your watchlists ready for potential longs.   Ideally, we would get some consolidation in this area where a little of the overbought condition could work itself off, but how often do we really get what we want in the market, especially a market as volatile as this.   Good luck Thursday. 

2 comments:

Ed Heath said...

"All of my timing indicators are still bearish but some are very, very close to turning bullish."

What do you look at to determine bullish?

Mac said...

Hi, Ed. The things I use are breadth related and mostly come from ideas from Pradeep Bonde at Stockbee.blogspot.com.

Out of respect for him, I will not share them all here but if you investigate his blog, he publishes a ton of free information that can be accompanied with telechart to get some breath related indicators.