Monday, September 27, 2010

State of the Stock Market - 9/28/10

A quiet day for most of the session today on Wall Street, as stocks were down just slightly in the morning but didn't go anywhere sideways through lunch and into the early afternoon.  Around 2:00, however, the action picked up a bit and stocks moved briefly positive for the session.   They could not keep the rally going however and had a somewhat nasty selloff in the final hour of trading.   The selling wasn't drastic and no damage was done, but the drop was quick in that final hour and stocks did close at their lows for the day.   Volume appears to be lower.  

Technically, nothing really changed today - the overall market remains quite bullish and a pullback/consolidation would be completely normal here.   As long as we remain above the former resistance levels broken last Monday, I would remain bullish.   A break of those levels might make me rethink things, but as I said in this weekend's video, there is no point in anticipating a breakdown occuring - wait for the evidence. 

As I take a quick look through my scans, I don't notice much damage at all to individual stocks.  ISLN had a nasty break today on heavier volume (no news as well) and INFN sold off hard as well on heavier volume after some parabolic action last week.   That's really all I see however.   If I see more breakdowns like this over the next few days, I would get more worried, but again, let's wait until we see the evidence. 

BIDU and LVS were two stocks up large today and I do expect BIDU in particular to reverse soon, much like INFN did today.  It is getting parabolic (two gaps in a row is a good signal) and if it gaps up again tomorrow, I would look to perhaps short a break of tomorrow's potential gap.   Since I am unable to trade intraday anymore, this won't be a trade I will be able to pay much attention to, but I am putting it out there as one to watch. 

Charts from Telechart, Courtesy of Worden Brothers, Inc.

Not much else to say today - it was a slow day overall and more days like this will be constructive.   There is still a lack of nice bases at this juncture because the market has run so much, and it takes time for new, safer buy points to emerge.   Patience is a virtue and you need it right now.   Take care and good luck Tuesday.


Esther said...

I greatly appreciate the intelligence and humility that you bring to your analysis. Thank you for sharing it with us.

tomham said...

Here is the StockFinder RealCode of my version of the "Pocket Pivot". Hope this helps. .. Tom ..

'|*** StockFinder RealCode Condition - Version 5.0
'|*** Copy and paste this header and code into StockFinder *********
'|*** Condition:expanded version of pocket pivot
Static Count As Integer
If CurrentIndex >= 55 Then
If Price.Low(6 ) < Price.AVGC(10, 6) OrElse _
Price.Low(6 ) < Price.AVGC(50, 6) Then
Count -= 1
End If
End If
If CurrentIndex >= 50 Then
If Price.Low(1) < Price.AVGC(10, 1) OrElse _
Price.Low(1) < Price.AVGC(50, 1) Then
Count += 1
End If
Else If isFirstBar Then
Count = 0
End If
If CurrentIndex >= 54 Then
If Count > 0 AndAlso _
Price.Last > Price.Last(1) AndAlso _
3 * Price.Last > 2 * Price.High + Price.Low Then
Dim Test As Boolean = True
For i As Integer = 1 To 10
If Price.Last(i) < Price.Last(i + 1) AndAlso _
Volume.Value <= Volume.Value(i) Then
Test = False
Exit For
End If
If Test = True Then
End If
End If
End If