Thursday, October 14, 2010

State of the Stock Market - 10/14/10

Not a bad day at all today on Wall Street, as even though the market was down, the action intraday was bullish and we avoided a major sell-off.    The day started off flat and when stocks couldn't really get moving after an hour or so of trading, they started selling off.    The selling was relatively calm as stocks stairstepped their way lower, hitting their low of the day as the final hour of trading started.   From there, they bounced sharply back into the close, taking back about half of their earlier losses and finishing in the middle of their range.  Volume looks to be a good bit lower. 

Technically, today was good in that we still haven't seen any major selling come in to this market.   We were set up for it based on yesterday's close, but as long as the selling isn't heavy, there is no reason to get bearish yet.   I still think we will start selling off at some point in the near future and have a very significant pullback, but the near future could be three days or three weeks.   Using my Seinfeld analogy from yesterday, I still firmly believe we are to the left of the "E" on this current run, but I have no clue when we run completely out of gas.  As such, I'll stay focused on the long side until the market tells me not to do so.

I made no moves today and still hold IDSA and ALGN.   I thought hard about IDT but I thought I would wait to see how these pocket pivot earnings moves play out from a predictive viewpoint, and really volume wasn't as heavy as I liked today going into earnings.   It will probably be up 20% tomorrow knowing my luck.   I didn't see a ton of setups in my scans last night and that may be telling me the market needs to rest a bit before I look to get long any further than I already am.  

Not much else to say right now - the earnings season has been relatively calm up to this point.   More of the big boys are going to report soon, starting GOOG after-hours today, so as always, be careful.   Good luck Friday. 

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